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https://www.courtlistener.com/api/rest/v3/opinions/1537182/ | 979 A.2d 198 (2009)
187 Md. App. 496
George MATTHEWS
v.
STATE of Maryland.
No. 3035, September Term, 2007.
Court of Special Appeals of Maryland.
August 28, 2009.
*199 George Matthews, Pro Se Appellant.
Jessica V. Carter (Douglas F. Gansler, Atty. Gen., on brief), for Appellee.
Panel: JAMES R. EYLER, ZARNOCH, PAUL E. ALPERT, (Retired, Specially Assigned) JJ.
ZARNOCH, J.
Appellant, George Matthews, pleaded guilty in the Circuit Court for Baltimore City on December 5, 2000, to murder in the second degree and using a handgun in the commission of a crime of violence. Approximately seven years later, appellant filed a Motion for Appropriate Relief/New Trial ("Motion for New Trial"), pursuant to Maryland Rule 4-331(c), alleging, inter alia, newly discovered evidence, and requesting *200 a hearing. On January 31, 2008, that motion was denied without a hearing. Appellant timely appealed that denial, asking this Court one question, which we have rephrased as follows:
Did the circuit court err in denying appellant's motion for new trial without a holding a hearing as requested?[1]
Because appellant alleged newly discovered evidence and substantially complied with the procedural requirements of Maryland Rule 4-331 (d) in filing his motion for new trial, appellant was entitled to a hearing on his motion. We therefore vacate the circuit court's denial of appellant's motion and remand for a hearing.
BACKGROUND
On July 20, 2000, appellant was charged in two indictments with the willful, deliberate and premeditated murder of Kenneth Marlow Cunningham, robbery with a dangerous and deadly weapon, unlawful use of a handgun in the commission of a felony or crime of violence, and related charges. On December 5, 2000, appellant pleaded guilty to second degree murder and use of a handgun in commission of a crime of violence. According to the record before this Court, appellant was sentenced on January 11, 2001, as follows:
Sentence of the Court, as per the agreement, as to Count 1 is a sentence of 30 years to the Division of Corrections, that being murder in the second degree.
Count 2, use of a handgun in the commission of a felony or crime of violence, sentence is ten years consecutive, first five of which to be served without the possibility of parole. The sentences to commence July the 11, 2000 and would run concurrently with any federal sentence that Mr. Matthews is presently serving.
Matthews v. State, No. 1951, Sept. Term, 2006, 175 Md.App. 774, slip op. at 1, (filed Sept. 11, 2007).
Following his sentence, appellant filed three separate petitions for post-conviction relief, two of which he withdrew without prejudice. On October 15, 2004, appellant filed a third petition for post-conviction relief, the substance of which is not included in the record on appeal. Following a hearing, appellant's petition was denied by order of the circuit court on April 5, 2005. This Court denied appellant's application for leave to appeal in a per curiam decision on February 8, 2006. Matthews v. State, No. 1385, Sept. Term 2005, 167 Md.App. 779 (filed February 8, 2006).
On September 13, 2006, appellant filed another motion in the circuit court, entitled Motion for Exercise of Revisory Power Over an Enrolled Judgment Citing Mistake, Irregularity in the Proceedings in the Circuit Court, asserting that the court's acceptance of his guilty plea, and its pronouncement of sentence, were the result of mistake or irregularity. ("Motion to Revise"). Matthews v. State, No. 1951, Sept. Term, 2006, 175 Md.App. 774, slip op. at 2 (filed Sept. 11, 2007). The circuit court denied that motion on October 2, 2006. Id. Appellant appealed that denial to this Court, and we dismissed appellant's appeal in an unreported opinion. See Matthews v. State, No. 1951, Sept. Term, 2006, 175 Md.App. 774, slip op. at 5 (filed Sept. 11, 2007). This Court's mandate issued on October 11, 2007. Appellant's petition for writ of certiorari to the Court of Appeals was also denied by the Court of Appeals on December 17, 2007. Matthews v. State, 402 Md. 353, 936 A.2d 851 (2007).
*201 On or around December 19, 2007, appellant filed a Motion for Appropriate Relief/New Trial in the circuit court, the motion that is the subject of this appeal, alleging: (1) "that the factual basis on which the State's Attorney's Officer pro-offered [sic] in the case subjudice does not support the plea at least, insofar as what the State pro-offered [sic] as to Brian Sollers and Kaprice Marshall testimony would be if called to testify"; (2) that "the notarized affidavit written by Brian Sollers constitutes newly discovered or after discovered evidence"; and, (3) "that trial counsel rendered ineffective assistance by failure to file a demand for Bill of Particulars pursuant to Maryland Rule 4-241." Appellant's motion was accompanied by a handwritten affidavit by Brian Sollers, who stated that he gave false and misleading information to police investigators in connection with this case, and influenced Kaprice Marshall to do the same.[2] Appellant also requested a hearing on the motion. On January 31, 2008, the Circuit Court for Baltimore City denied appellant's Motion for Appropriate Relief/New Trial without conducting a hearing. This appeal followed.
DISCUSSION
On appeal, after setting forth the previously mentioned three grounds for his motion, appellant asserts:
Appellant argues that at the very least, he was entitled to a hearing on the Motion for Appropriate Relief/New Trial because he presented a notorized [sic] copy of Brian Sollers' written recantation statement, a copy of which was mailed to the State's Attorney's Office for Baltimore City, where that officer failed to challenge or refute the notorized [sic] statement.
The State responds by first moving to dismiss appellant's appeal on the grounds that appellant failed to comply with Maryland Rules 8-411 and 8-413. The State suggests that we may therefore dismiss this appeal pursuant to Maryland Rule 8-602(a)(6). That rule provides:
(a) Grounds. On motion or on its own initiative, the Court may dismiss an appeal for any of the following reasons:
* * *
(6) the contents of the record do not comply with Rule 8-413.
The Rule is clearly discretionary, and because our holding is limited to appellant's right to have a hearing on his motion, we will deny the State's motion to dismiss.
Turning to the substance of appellant's contentions, we note that he first alleges that there was an inadequate factual basis for his guilty plea, because the plea relied on the proffered testimony of Brian Sollers and Kaprice Marshall. See Md. Rule 4-242(c) (stating that court may not accept a guilty plea until it determines that "(1) the defendant is pleading voluntarily, with understanding of the nature of the charge and the consequences of the plea; and (2) there is a factual basis for the plea"); see also Metheny v. State, 359 Md. 576, 602, 755 A.2d 1088 (2000) ("The factual basis determination serves several *202 purposes, but mainly as a safeguard that the accused not be convicted of a crime that he or she did not commit"); accord Rivera v. State, 409 Md. 176, 194, 973 A.2d 218 (2009).
The State responds that, to the extent that appellant is seeking to withdraw his plea, that request was untimely under Maryland Rule 4-242(g). That rule provides:
At any time before sentencing, the court may permit a defendant to withdraw a plea of guilty or nolo contendere when the withdrawal serves the interest of justice. After the imposition of sentence, on motion of a defendant filed within ten days, the court may set aside the judgment and permit the defendant to withdraw a plea of guilty or nolo contendere if the defendant establishes that the provisions of section (c) or (d) of this Rule were not complied with or there was a violation of a plea agreement entered into pursuant to Rule 4-243. The court shall hold a hearing on any timely motion to withdraw a plea of guilty or nolo contendere.
We agree with the State that appellant's motion was untimely because it was not filed within 10 days after he was sentenced as required by Maryland Rule 4-242(g). But, the primary basis for appellant's motion was the newly discovered evidence provided in the sworn affidavit of Brian Sollers.[3] In support of his motion, appellant relied on Maryland Rule 4-331 (c), and also requested a hearing in the circuit court. That rule permits a court to grant "a new trial or other appropriate relief," which could include permitting appellant to withdraw his guilty plea. Md. Rule 4-331(c) (emphasis added). We thus turn to Maryland Rule 4-331, which states:
(a) Within Ten Days of Verdict. On motion of the defendant filed within ten days after a verdict, the court, in the interest of justice, may order a new trial.
(b) Revisory Power. The court has revisory power and control over the judgment to set aside an unjust or improper verdict and grant a new trial:
(1) in the District Court, on motion filed within 90 days after its imposition of sentence if an appeal has not been perfected;
(2) in the circuit courts, on motion filed within 90 days after its imposition of sentence.
Thereafter, the court has revisory power and control over the judgment in case of fraud, mistake, or irregularity.
(c) Newly Discovered Evidence. The court may grant a new trial or other appropriate relief on the ground of newly discovered evidence which could not have been discovered by due diligence in time to move for a new trial pursuant to section (a) of this Rule:
(1) on motion filed within one year after the date the court imposed sentence or the date it received a mandate issued by the Court of Appeals or the Court of Special Appeals, whichever is later;
(2) on motion filed at any time if a sentence of death was imposed and the newly discovered evidence, if proven, would show that the defendant is innocent of the capital crime of which the defendant was convicted or of an aggravating circumstance or other condition of eligibility for the death penalty actually found by the court or jury in imposing the death sentence;
*203 (3) on motion filed at any time if the motion is based on DNA identification testing or other generally accepted scientific techniques the results of which, if proven, would show that the defendant is innocent of the crime of which the defendant was convicted.
(d) Form of Motion. A motion filed under this Rule shall (1) be in writing, (2) state in detail the grounds upon which it is based, (3) if filed under section (c) of this Rule, describe the newly discovered evidence, and (4) contain or be accompanied by a request for hearing if a hearing is sought.
(e) Disposition. The court may hold a hearing on any motion filed under this Rule and shall hold a hearing on a motion filed under section (c) if the motion satisfies the requirements of section (d) and a hearing was requested. The court may revise a judgment or set aside a verdict prior to entry of judgment only on the record in open court. The court shall state its reasons for setting aside a judgment or verdict and granting a new trial.
(Emphasis added).[4]
Appellant's claim was not filed within ten days of the verdict, as required by Maryland Rule 4-331(a). It was not filed within 90 days as required by Maryland Rule 4-331(b). Nor under Maryland Rule 4-331(c)(1) was it filed within one year of the sentence.
However, appellant's motion was arguably filed within one year of "a mandate issued by the Court of Appeals or the Court of Special Appeals ..." Md. Rule 4-331(c)(1) (emphasis added). This Court issued a mandate after dismissing appellant's appeal from the denial of his motion to revise on October 11, 2007. The instant motion for new trial was filed on or around December 19, 2007.[5] If the provision in Maryland Rule 4-331(c)(1) applies to any mandate, then, arguably, appellant's motion for new trial was timely filed. But, we need not decide whether Rule 4-331(c)(1) applies to any mandate, including one not issued in connection with a direct appeal, because we conclude that even an untimely motion for a new trial based on newly discovered evidence may afford the movant a hearing under subsection (e) of Maryland Rule 4-331.
The Court of Appeals has provided that the rules of construction that guide the interpretation of statutes apply equally when interpreting the Maryland rules of procedure. State v. Montgomery, 334 Md. 20, 24, 637 A.2d 1193 (1994); see also Johnson v. State, 360 Md. 250, 265, 757 A.2d 796 (2000) ("We have often noted that looking to relevant case law and appropriate secondary authority enables us to place the rule in question in the proper context") (citations omitted). We begin by noting that the present language of Maryland Rule 4-331(e) differs markedly from that contained in the pre-2002 version. At that time, the Rule made express reference to the disposition of an untimely motion for a new trial. Specifically, Section (e) provided:
The court shall afford the defendant or counsel and the State's Attorney an opportunity for a hearing on a motion filed under this Rule, except that if the motion is filed more than one year after the circuit court receives the mandate *204 issued by the Court of Appeals, a hearing need not be held unless the motion satisfies the requirements of section (d) of this Rule. The court may revise a judgment or set aside a verdict prior to entry of a judgment only on the record in open court. The court shall state its reasons for setting aside a judgment or verdict and granting a new trial. (Emphasis added.).
In Jackson v. State, 358 Md. 612, 751 A.2d 473 (2000), a case where a motion for a new trial on the basis of newly discovered evidence was denied without a hearing, the Court of Appeals, in reliance on Rule 4-331(e), said:
The only basis for the court to deny a hearing is expressly provided for in the rulea determination that the motion was late and did not comply with the requirements of § (d) of the Rule.
Jackson, 358 Md. at 622-23, 751 A.2d 473 (Emphasis added).
On October 20, 2000, the Standing Committee on Rules of Practice and Procedure considered the following proposal to amend the first sentence of Rule 4-331(e):
If there is no waiver by the parties, The the court shall afford the defendant or counsel and the State's Attorney an opportunity for hold a hearing on a motion filed under this Rule, except that if the motion is filed more than one year after the circuit court receives the mandate issued by the Court of Appeals, a hearing need not be held unless the motion satisfies the requirements of section (d) of this Rule.....
According to Committee minutes, Judge Hovey Johnson explained the rationale for the change:
Turning to section (e), Judge Johnson explained that the Subcommittee is proposing to clarify that a hearing is required pursuant to the decision of Jackson v. State, 358 Md. 612, 751 A.2d 473 (2000), which had pointed out some ambiguity as to whether section (e) of Rule 4-331 provides an automatic hearing when a motion for a new trial is filed. The Vice Chair questioned as to how the hearing is waived, and Judge Johnson replied that it is waived if no one asks for a hearing. Judge Heller noted that waiver in criminal proceedings can be different. Counsel or the defendant can expressly so state, or it may be necessary to come to the courtroom to waive the hearing. Another way to accomplish the concept of a waiver is to delete the introductory language of section (e) which reads: "[i]f there is no waiver by the parties" and substitute in its place the language "[i]f a hearing is requested by a party." The Vice Chair pointed out that one of the ambiguities in the existing language of the Rule is the meaning of the phrase "[t]he court shall afford the defendant or counsel and the State's Attorney an opportunity for a hearing" when there is no other place in the Rule providing how the hearing happens. Mr. Bowen commented that if the introductory language of section (e) is changed as Judge Heller suggested, the second part of section (e) will have to be changed to be consistent. Sections (d) and (e) will have to be worked on together. The Vice Chair stated that the Style Subcommittee can take care of this. The Chair stated that Rule 4-331 was approved as amended.
Contrary to this statement in the minutes, the rule change was not finally approved, and the issue resurfaced at a February 9, 2001 meeting of the Rules Committee. At that time, the following amendment to Rule 4-331(e) was considered:
If a hearing is requested by a party The the court shall afford the defendant or counsel and the State's Attorney an opportunity *205 for hold a hearing on a motion filed under this Rule, except that if the motion is filed more than one year after the circuit court receives the mandate issued by the Court of Appeals.
Alternative 1
waiver or exhaustion of direct appeals,
Alternative 2[6]
court's imposition of sentence or the date the court receives a mandate issued by the Court of Appeals or the Court of Special Appeals, whichever is later,
a hearing need not be held unless the motion satisfies the requirements of section (d) of this Rule.....
At the meeting, Committee member Robert Dean explained that the Style Subcommittee had sent the proposal back to the Criminal Subcommittee "to fix some logical inconsistencies involving policy determinations". According to the minutes:
Mr. Brault inquired as to why the Rule is permitting the motion for a new trial to be filed at any time. Mr. Dean answered that after one year, the judge can dispose of the motion without a hearing unless the motion conforms to more stringent requirements.
Later in the meeting the following discussion occurred:
The Chair noted that a motion for a new trial based on a defendant's statement, which is disputed by seven witnesses, is different than a motion based on newly discovered evidence. Section (e) should provide that if a motion alleges newly discovered evidence, the person gets a hearing; otherwise the court may hold a hearing. The Committee agreed by consensus.
The minutes went on to note:
The Reporter referred to the case of Jackson v. State, 358 Md. 612, 751 A.2d 473 (2000), which held that the court must hold a hearing when a motion for a new trial is filed. Mr. Karceski observed that the existing Rule is being changed. The Chair said that the Jackson case held that when a defendant alleges newly discovered evidence, the defendant should have an opportunity to present his or her case. Judge Missouri pointed out that most of the motions for a new trial allege that the judge made mistakes. The Chair observed that the judge is not prohibited from holding a hearing. Mr. Dean reiterated that newly discovered evidence is rarely alleged in motions for a new trial.
The Committee approved the Rule as amended.[7]
Prior to submitting the proposed rule change to the Court of Appeals, the draft was apparently taken up again by the Style Subcommittee.[8] Section (e) was amended in the following fashion:
The court [shall afford the defendant or counsel and the State's Attorney an opportunity for] may hold a hearing on any motion filed under this Rule and shall hold a hearing on a motion filed under section (c) if the motion satisfies the requirements of section (d) and [this Rule] a hearing was requested [, except that if the motion is filed more than one year after the circuit court receives the mandate issued by the Court of Appeals, *206 a hearing need not be held unless the motion satisfies the requirements of section (d) of this Rule]. The court may revise a judgment or set aside a verdict prior to entry of a judgment only on the record in open court. The court shall state its reasons for setting aside a judgment or verdict and granting a new trial.
The Subcommittee also made additional changes to Section (d), toughening the procedural requirements for filing a new trial motion. These were the changes that were submitted to and adopted by the Court and that are now part of the existing rule.[9]
These changes were submitted to the Court as part of the One Hundred Forty-Ninth Report of the Standing Committee on Rules of Practice and Procedure, 28 Md. Reg. 857 (May 4, 2001).[10] They were accompanied by the following Reporter's Note:
The case of Jackson v. State, 358 Md. 612, 751 A.2d 473 (2000), pointed out some ambiguity as to whether section (e) of Rule 4-331 provides an automatic hearing when a motion for a new trial is filed. The Court of Appeals held that in the absence of a waiver by the parties, the court must conduct a hearing. The Committee is recommending a change to section (e) to provide that if a motion based on newly-discovered evidence satisfies section (d) of the Rule and a hearing is requested by a party, the court must hold a hearing; in all other cases, the court may hold a hearing. Additionally, stylistic changes are proposed. Id. at 868, 751 A.2d 473.
However, the transmittal letter to the Court, dated April 11, 2001, contained this caveat:
For the guidance of the Court and the public, following each proposed new rule and amendment is a Reporter's Note describing the reasons for the proposal and any changes that would be effected in current law or practice. We caution that these Reporter's Notes were prepared initially for the benefit of the Rules Committee; they are not part of the Rules and have not been debated or approved by the Committee; and they are not to be regarded as any kind of official comment or interpretation. They are included solely to assist the Court in understanding some of the reasons for the proposed changes. Id. at 858, 751 A.2d 473. (underlining in original).[11]
Finally, the change to Rule 4-331 was explained by the Rules Committee Chairman at the October 9, 2001 open meeting before the Court of Appeals as follows:
We proposed in Rule 4-331 an amendment that's based on scientific developments, DNA being the most obvious one... The other proposed change to [4-331](e) would require that there be a hearing where the motion comes in asserting the innocence claim based on the scientific evidence and give the court the discretion to hold a hearing on any other motion filed.
Without a doubt, Rule 4-331's provisions with regard to the treatment of untimely motions were ambiguous before the 2002 change and, after the amendment, they continue to be. The pre-2002 Rule in its *207 time-structured first three sections did not hint that an untimely motionparticularly one with regard to newly-discovered evidencewas possible until the "disposition" section of the Rule, where a hearing on the untimely motion was mandated, if certain procedural requirements were met. The new Rule retained this inconsistency, because once again, the first three sections do not mention untimely motions, except for the retained reference to a motion "filed under this Rule."
Nevertheless, what is apparent from the record before the Rules Committee are concerns for: addressing "automatic", i.e. "unrequested" hearings; dealing with unnecessary hearings through the "more stringent" procedural requirements of section (d); treating preferentially a motion for a new trial on the basis of newly discovered evidence; and, acting consistently with the Jackson decision. The State's position appears to be that altering the consideration of an untimely motion for a new trial was a prime concern. To arrive at that conclusion, we would have to find (1) that the Style Subcommittee's changes to the draft rule, adopted by the full Committee on February 9, 2001, were of a substantive nature and (2) that the Committee intended to retreat from the statement in Jackson that the only basis for denying a hearing on an untimely motion for a new trial on the basis of newly discovered evidence is a failure to comply with the procedural requirements of Section (d). In our view, this would be an unreasonable reading of the record in the Rules Committee.
Ultimately, the meaning of the Rule change is determined not by the Rules Committee or its subcommittees, but by the intent of the Court of Appeals. Although the Court adopted the language of Rule 4-331 as submitted and with no further explanation, it is unlikely the Court intended a departure from Jackson's conclusion that even an untimely and procedurally compliant motion for new trial on the basis of newly discovered evidence cannot be denied without a hearing. Cf. Allen v. State, 402 Md. 59, 72, 935 A.2d 421 (2007) (When the Legislature enacts new legislation and when it does not express a clear intention to abrogate prior judicial decisions, it is presumed to have acquiesced in those holdings).
Returning to the text of Section (e), this provision requires a hearing for a procedurally compliant "motion filed under Section (c)." Although it is arguable that this provision includes only motions filed within the time constraints listed in Section (c), we conclude that it is likely that the Court and the Committee intended the term "motion filed under Section (c)" to be simply a short-hand reference to a motion based on newly discovered evidence. Read this way, the Rule change is consistent with both Jackson, the relevant portions of the record before the Rules Committee, and the Reporter's Note submitted to the Committee.
Accordingly, we hold that if an untimely motion for a new trial on the basis of newly discovered evidence is filed, i.e. one filed after the one year deadline, and the motion has complied with Section (d) of the Rule, the movant must be accorded a hearing. In this case, and as the State concedes, appellant's motion substantially complied with Section (d) of the Ruleit was in writing, stated the grounds upon which it was based, alleged and described the newly discovered evidence, and contained a request for a hearing. Therefore, appellant was entitled to a hearing under Md. Rule 4-331.
At that hearing, in order to prevail on the motion for new trial appellant must demonstrate that (1) the evidence was newly discovered; that it was not capable *208 of being discovered by due diligence; and (2) that the newly discovered evidence may well have produced a different result, that is, there was a substantial or significant possibility that the verdict of the trier of fact would have been affected. Jackson, 358 Md. at 626, 751 A.2d 473; Accord Miller v. State, 380 Md. 1, 28, 843 A.2d 803 (2004) ("Newly discovered evidence warrants a new trial only if it may well have produced a different result, that is, there was a substantial or significant possibility that the verdict of the trier of fact would have been affected") (internal citation omitted); see also Skok v. State, 124 Md. App. 226, 244, 721 A.2d 259 (1998) ("We hold that a defendant who files a motion for new trial to set aside a guilty plea or a nolo contendere plea must allege facts showing that he/she has acted with ordinary diligence and good faith"), rev'd on other grounds, 361 Md. 52, 760 A.2d 647 (2000).
Further, it is the trial court's function to assess credibility in ruling on a motion for a new trial. In Argyrou v. State, 349 Md. 587, 709 A.2d 1194 (1998), the Court of Appeals emphasized that "[a] trial court has wide latitude in considering a motion for new trial and may consider a number of factors, including credibility, in deciding it; thus, the court has the authority to weigh the evidence and to consider the credibility of witnesses in deciding a motion for new trial." Id. at 599, 709 A.2d 1194. Speaking for the Court, Chief Judge Bell explained that the trial court also has discretion to consider "the credibility or trustworthiness of the evidence itself, as well as the motive, or other impeaching characteristics of those offering it." Id. at 608, 709 A.2d 1194.
In addition to these considerations, appellant also alleged that he received ineffective assistance of counsel because his trial counsel did not file a demand for a bill of particulars. The record in this Court is simply inadequate for us to address this contention. Indeed, the record does not even indicate whether this issue was raised in appellant's third petition for post-conviction relief, a petition that was denied by order of the Circuit Court for Baltimore City on April 5, 2005. We recognize that the circuit court is not precluded from reopening the post-conviction proceeding to consider appellant's claim of ineffective assistance. See Md.Code (2001, 2008 Repl. Vol.), § 7-104 of the Criminal Procedure Article ("The court may reopen a postconviction proceeding that was previously concluded if the court determines that the action is in the interests of justice"); Skok v. State, 361 Md. 52, 80, 760 A.2d 647 (2000) ("Although the Maryland General Assembly in 1995 limited a person to `one petition, arising out of each trial, for relief' under the Post Conviction Procedure Act, the Legislature did provide that a `court may in its discretion reopen a postconviction proceeding that was previously concluded if the court determines that such action is in the interests of justice'"). However, the circuit court on remand should also consider whether appellant's claims have already been waived. See § 7-106(b) of the Criminal Procedure Article (setting forth when an allegation of error is deemed waived, and when failure to make such an allegation may be excused).
Should the circuit court conclude in its discretion that appellant is entitled to "other appropriate relief" under Maryland Rule 4-331(c), such relief may include permitting appellant to withdraw his guilty plea if that serves the interest of justice in this case. See, e.g., Harris v. State, 299 Md. 511, 515, 474 A.2d 890 (1984) ("It is well-settled that the granting of a motion to withdraw a guilty plea lies within the sound discretion of a trial judge, and his *209 decision will not be overturned unless a clear abuse of discretion is shown"). As the Court of Appeals has stated, such a remedy places the parties in their original positions:
A defendant may mount a challenge to the plea with the trial court during the time the case remains within that court's jurisdiction, and may thereafter seek to challenge the plea in the appellate courts. A defendant successful in challenging the plea must realize, however, that the remedy is ordinarily to place the parties in their original position.
State v. Bittinger, 314 Md. 96, 101-02, 549 A.2d 10 (1988) (citations omitted); see also State v. Parker, 334 Md. 576, 607, 640 A.2d 1104 (1994) (concluding that when the Court lacked jurisdiction to enforce an integral portion of defendant's plea agreement, the defendant could either leave the guilty plea in place or withdraw the plea, so that the State could proceed on all of the original charges); Sweetwine v. State, 288 Md. 199, 212 n. 5, 421 A.2d 60 (1980) (noting that "where the prosecution breached a plea bargain, entitling the defendant to rescind his guilty plea, if the defendant elected to rescind the guilty plea then he will have to plead anew to all of the original charges, including those which the State had nol prossed") (emphasis in original) (internal quotations omitted).
JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY VACATED. CASE REMANDED FOR A HEARING TO BE HELD ON APPELLANT'S MOTION FOR A NEW TRIAL. COSTS TO BE PAID BY THE MAYOR AND CITY COUNCIL OF BALTIMORE.
NOTES
[1] Appellant's question presented asks: "Did the lower court error [sic] as a matter of law when it failed to properly exercise sound discretion in ruling on the matter?"
[2] Specifically, the affidavit stated:
I Brian Sollers willfully and falsely gave detectives investigating a homicide misleading information, relating to a homicide that took place on 8/26/1995. I also, influenced Kaprice Marshall, to implicate George Mathews (Gee) in the homicide. Ms. Marshall didn't know Mr. Mathews. I lied in my interviews by detectives ... by claiming George Mathews committ [sic] the homicide on 8, 26, 1995 at the time of this incident (homicide) and my interveiw [sic] by detectives. I, we, in our neighborhood dislike [an] outsider [like] Mr. Mathews from New York in our neighborhood.
[3] Appellant also alleged ineffective assistance of counsel. As will be explained, we decline to address this contention on appeal, leaving the matter to the circuit court's discretion on remand.
[4] The State does not contend that Maryland Rule 4-331 does not apply when the underlying judgment results from a guilty plea, as opposed to a trial.
[5] In its Order denying this motion, the circuit court observed that appellant certified that he mailed his motion on December 19, 2007, but the motion was not received in the Clerk's office until January 9, 2008.
[6] Eventually, a variation of Alternative 2 was adopted.
[7] At the same meeting, the Committee also approved changes to Section (d) and Section (c). The latter change dealt with the filing of a motion for new trial on the basis of DNA evidence or other scientific techniques.
[8] There are no minutes of the Style Subcommittee's meeting.
[9] The November 1, 2001 Rules Order approving the changes was generally effective January 1, 2002.
[10] The Report was submitted by the Chair and Vice-chair on behalf of the Rules Committee.
[11] The transmittal letter also described the revision of Rule 4-331(e) as "chang[ing] the circumstances under which section (e) requires the Court to hold a hearing." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537200/ | 27 B.R. 638 (1982)
In re James Thomas HACKWORTH, Debtor.
Karen K. Hackworth MALONE, Plaintiff,
v.
James Thomas HACKWORTH, Defendant.
Bankruptcy No. 1-81-02288, Adv. No. 1-81-0347.
United States Bankruptcy Court, S.D. Ohio, W.D.
April 1, 1982.
Ronald E. McKenzie, Portsmouth, Ohio, for plaintiff.
Richard L. Eisnaugle, Portsmouth, Ohio, for defendant.
David W. Kuhn, Portsmouth, Ohio, interim Trustee.
DECISION
BURTON PERLMAN, Bankruptcy Judge.
Debtor (hereinafter referred to as "defendant") filed a petition for relief under *639 Chapter 7 of the Bankruptcy Code. The above captioned adversary proceeding concerns the dischargeability of a debt under 11 U.S.C. § 523(a)(5). Pursuant to agreement of counsel at pretrial conference, the matter has been submitted for decision on the parties' stipulation of fact and memoranda of law setting forth their respective positions.
The stipulation of fact provides as follows:
"1. That defendant incurred an original debt with the Farmers Home Administration in 1977 to operate his farming business. At the time of said indebtedness he gave Farmers Home Administration as collateral farm equipment and a second mortgage on the real estate.
2. That the plaintiff and defendant were married on June 28, 1980.
3. That each year the defendant refinanced with Farmers Home Administration concerning his farm loan and that for the year 1980 he received the money in August of 1980, which was approximately a month and a half after the plaintiff and defendant were married and as a result of the fact that they were married the Farmers Home Administration required the plaintiff to sign the mortgage and note since she was married to defendant. That as a result plaintiff signed the note and mortgage in August of 1980, for approximately $45,000.
4. In April of 1981, plaintiff and defendant entered into a separation agreement a copy of which is attached hereto and marked as `Exhibit A'.
5. In June 19, 1981, plaintiff and defendant were divorced. A copy of the judgment entry is attached hereto and marked as `Exhibit B'."
The separation agreement, incorporated into the stipulation of fact, provides in part:
"ARTICLE III: DIVISION OF PROPERTY.
Each party shall retain his or her own personal possessions. The wife is to retain her 1978 automobile and is to pay any indebtedness on the same and is to hold the husband free and harmless from the payment of the same. The wife is to retain all the household goods and furnishings.
The husband is to retain the farm machinery and is to pay the indebtness (sic) on the same, including a mortgage to the Farmers Home Administration. The husband is to apply for a release to release the wife from any obligation and payment of the debt, and is to hold her free and clear from payment of the same. The husband is to retain his Pick-up Truck and to pay any indebtness of the (sic) same. The husband is to retain the Real Estate which he had before the parties were married.
ARTICLE IV: DEBTS.
The husband is to pay any and all debts incurred by the parties during their marriage . . . "
The issue before us is whether or not defendant's obligation to satisfy the indebtedness owing to the Farmers Home Administration (FHA) is dischargeable under 11 U.S.C. § 523(a)(5). We hold that defendant's obligation does not constitute "alimony to, maintenance for, or support of" plaintiff and is therefore dischargeable in bankruptcy.
Section 523(a)(5) states in pertinent part:
"(a) A discharge under section 727, 1141, or 1328(b) of this title does not discharge an individual debtor from any debt
(5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree, or property settlement agreement, but not to the extent that
* * * * * *
(B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support;"
In previous decisions which we have rendered under § 523(a)(5) involving the transfer of liability for certain debts under a separation agreement, we have made clear that in determining whether the "liability is actually in the nature of alimony, maintenance, *640 or support", the primary inquiry is whether the parties intended that the assumption of liability for the debt be alimony, by contrast to being part of a general scheme of division of debt or property. See In re Smith, Adversary Nos. 1-81-0082 and 1-81-0083, at pp. 3-4 (Bkrtcy., S.D.Ohio 1981); In re Diers, 7 B.R. 18, 21 (Bkrtcy., S.D.Ohio 1980). In ascertaining the parties' intentions, it becomes necessary to examine the separation agreement, and the character of the obligation described therein, from which evidence of intent may be inferred.
Generally, the separation agreement in this proceeding discloses that the apparent intention of the parties was to effect a division of property. While defendant retained the realty, farm equipment, truck and his personal belongings, plaintiff was given the household goods, her automobile and personal possessions. Consistent with this scheme of property division, defendant assumed the burden of the secured obligations on the property that was retained by him. The provisions for assumption of liability on the indebtedness were therefore incidental to the distribution of the property rather than a means for providing alimony, maintenance or support.
Further, the nature of the disputed obligation does not indicate that it was intended to be alimony, which may be defined as a "substitute for marital support." 24 Am. Jur.2d, Divorce and Separation, § 514, at pp. 640-41. It is significant that the collateral securing the underlying debt was retained by the spouse, defendant herein, who is obligated to repay the debt under the separation agreement. Therefore, the result of the transaction did not impose upon defendant an obligation to provide plaintiff with a necessity of life, insulated from the reach of marital creditors. Contra In re Smith, supra, (transfer of marital home to non-debtor spouse with debtor assuming liability to second mortgagee).
While plaintiff argues that assumption of the debt by defendant constitutes support to plaintiff, it was not the intention of Congress to make nondischargeable all debts subject to such "hold harmless" agreements, but only those that constitute alimony, maintenance or support. See H.R.Rep. No. 95-595, 95th Cong., 1st Sess. 363 (1977); S.Rep. No. 95-989, 95th Cong., 2d Sess. (1978), U.S.Code Cong. & Admin.News 1978, p. 5787. Although a discharge of the debt in bankruptcy transfers liability thereon to plaintiff, that fact alone does not a fortiori compel a finding that the transaction was meant to be a substitute for marital support. Something more than the mere transfer of the burden to repay a debt must be present in order to hold such marital obligations nondischargeable. As we have seen, there are no indicia of intent by the parties to the separation agreement that defendant's assumption of payment on this debt was in lieu of marital support.
In addition to our conclusion in regard to the parties' intent in executing the separation agreement, we note that the brevity of the marriageapproximately one yearweighs in favor of our conclusion that the assumption of the debt by defendant was not intended to constitute alimony, support or maintenance. Contra In re Smith, supra.
We find the issues in favor of defendant. The complaint will be dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/660684/ | 14 F.3d 222
63 Fair Empl.Prac.Cas. (BNA) 1051,63 Empl. Prac. Dec. P 42,838Connie JAMISON, Plaintiff-Appellee,v.Jerry WILEY, Defendant-Appellant,United States of America, Defendant-Appellee.
No. 92-1628.
United States Court of Appeals,Fourth Circuit.
Argued May 6, 1993.Decided Jan. 13, 1994.
Steven Ray Minor, White, Elliott & Bundy, Bristol, VA, argued (Mark M. Lawson, on brief), for defendant-appellant Wiley.
Jeffrey Alan Fleischhauer, Bird, Kinder & Huffman, P.C., Roanoke, VA, argued (Donald W. Huffman, Kenneth J. Lasky, on brief), for plaintiff-appellee Jamison.
Scott Ramsey McIntosh, Civil Div., U.S. Dept. of Justice, Washington, DC, argued (Stuart M. Gerson, Asst. Atty. Gen., E. Montgomery Tucker, U.S. Atty., Barbara L. Herwig, on brief), for plaintiff-appellee U.S.
Before PHILLIPS, NIEMEYER, and WILLIAMS, Circuit Judges.
OPINION
PHILLIPS, Circuit Judge:
1
Jerry Wiley, a federal employee, appeals the district court's refusal to substitute the United States for him as defendant in a removed state tort action brought against him by one of his subordinates, as well as its subsequent decision to remand the action to state court, 794 F.Supp. 587. We hold that the district court properly refused to substitute the United States as defendant, but that it erred in relinquishing jurisdiction and remanding the case to state court. We therefore reverse the order of remand and direct the district court to exercise jurisdiction over the case.
I.
2
This case presents a number of interrelated jurisdictional and procedural issues respecting the scope and operation of the immunity and removal provisions of the Westfall Act, 28 U.S.C. Secs. 2679(b) and (d), in conjunction with the general federal officers removal statute, 28 U.S.C. Sec. 1442(a)(1), as well as the jurisdiction of this court over appeals from orders of substitution and remand entered in the course of applying those immunity and removal provisions. Because operation of the Westfall Act's provisions are of central importance to an understanding of the specific issues presented, we summarize them at the outset of our statement of the factual background and procedural history of the case as it has come to us.
A.
3
The Federal Employees Liability Reform and Tort Compensation Act, commonly known as the Westfall Act, was passed in response to the Supreme Court's decision in Westfall v. Erwin, 484 U.S. 292, 108 S.Ct. 580, 98 L.Ed.2d 619 (1988), which significantly narrowed the scope of the absolute immunity that federal employees had traditionally enjoyed for common law torts committed within the scope of their employment. Before 1988, it was widely understood that federal employees were absolutely immune from personal liability for common law torts committed while they were acting "within the outer perimeter of [their] line of duty." See, e.g., General Elec. Co. v. United States, 813 F.2d 1273, 1277 (4th Cir.1987), citing Barr v. Matteo, 360 U.S. 564, 575, 79 S.Ct. 1335, 1341, 3 L.Ed.2d 1434 (1959) (plurality opinion). In Westfall, however, the Supreme Court held that such immunity is not available unless the challenged conduct is both within the outer perimeter of the employee's official duties and "discretionary in nature." 484 U.S. at 298, 108 S.Ct. at 584. This meant that federal employees were now exposed to personal liability for any common law torts committed in the course of their official duties, unless they could show they were exercising governmental discretion at the time of the conduct in question.
4
The Court in Westfall recognized that by introducing into the doctrine of official immunity such an inquiry into the "discretionary" nature of the challenged conduct--similar to the one that had bedeviled courts for years in litigation under the Federal Tort Claim Act (FTCA)1--it was not only creating the potential for considerable complexity, but also making it difficult for federal employees to obtain dismissals based on official immunity at the summary judgment stage or earlier. Id. at 299-300, 108 S.Ct. at 585. It therefore expressly invited Congress to establish "[l]egislat[ive] standards" to define the scope of the official immunity available to "federal employees involved in state-law tort actions." Id. at 300, 108 S.Ct. at 585.
5
Congress promptly responded by passing the Westfall Act, which "establish[es] legislative standards to govern the immunity of Federal employees who have allegedly committed state common law torts." See H.R.Rep. No. 100-700, 100th Cong., 2d Sess. 4, reprinted in 1988 U.S.Code Cong. & Admin.News 5945, at 5947 (1988). As the Act's legislative history reveals, Congress' primary concern was that the Westfall decision would expose federal employees--particularly low-level "rank and file" employees who exercise little discretion in carrying out their duties--to unprecedented personal liability, with predictable adverse consequences for the routine administration of the government's business. Id. at 5946-47; see Pub.L. No. 100-694, Sec. 2(a) (Westfall decision has "seriously eroded the common law tort immunity previously available to Federal employees" and "created an immediate crisis involving the prospect of personal liability and the threat of protracted personal tort litigation for the entire Federal workforce," which threatens to "seriously undermine the morale and well being of Federal employees, impede the ability of agencies to carry out their missions, and diminish the vitality of the Federal Tort Claims Act"). The Act's stated purpose therefore was to "protect Federal employees from personal liability for common law torts committed within the scope of their employment, while providing persons injured by the common law torts of Federal employees with an appropriate remedy against the United States." Id. Sec. 2(b).
6
The centerpiece of the Act was Sec. 5, which amended the FTCA to provide that an FTCA action against the United States is the sole remedy for any injury to person or property caused by the negligent or wrongful acts of a federal employee "acting within the scope of his office or employment," "exclusive of any other civil action or proceeding for money damages ... against the employee whose act or omission gave rise to the claim." 28 U.S.C. Sec. 2679(b)(1). The purpose of this "exclusive remedy" provision was to give federal employees an absolute immunity from common law tort actions that was functionally equivalent to--if not perfectly congruent with2--the immunity that they had enjoyed under the common law doctrine of Barr v. Matteo before the Westfall decision. H.R.Rep. No. 100-700, supra, at 5947 ("The functional effect of [the Act] is to return Federal employees to the status they held prior to the Westfall decision").
7
Section 6 of the Act contained several procedural provisions designed to implement the absolute immunity created by section 5. It authorizes the Attorney General to issue what has come to be called a "scope certification"--a certification that "the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose." 28 U.S.C. Sec. 2679(d)(1)-(2).3 If the Attorney General issues such a scope certification with respect to an action brought against a federal employee in federal court, the action "shall be deemed" to be an action against the United States under the FTCA, and the United States "shall be substituted as the party defendant." Id. Sec. 2679(d)(1). If the Attorney General issues a scope certification with respect to an action brought against a federal employee in state court, the action "shall be removed without bond ... by the Attorney General to the [appropriate] district court of the United States," where it "shall be deemed" to be an action or proceeding against the United States under the FTCA and the United States "shall be substituted as the party defendant." Id. Sec. 2679(d)(2). The Act further provides that the Attorney General's certification with respect to an action brought against a federal employee in state court "shall conclusively establish scope of office or employment for purposes of removal." Id. (emphasis added).
8
If the Attorney General refuses to issue a scope certification with respect to an action pending in either federal or state court, the Act permits the employee to "petition the court to find and certify that the employee was acting within the scope of his office or employment." Id. Sec. 2679(d)(3). If the court so certifies, the action "shall be deemed" to be an action against the United States under the FTCA, and the United States "shall be substituted as the party defendant." Id. If the suit is pending in state court at the time the employee files the petition for certification, the Attorney General "may" remove the action to the appropriate district court for resolution of the disputed scope-of-employment issue, but the district court must remand the action to the state court if it finds, in considering the employee's petition for certification, that he was not acting within the scope of his office or employment. Id.; see Gogek v. Brown Univ., 729 F.Supp. 926, 930 n. 3 (D.R.I.1990).
B.
9
In January 1990, Connie Jamison, an employee of the federal Mine Safety and Health Administration, filed this civil action in Virginia state court against her supervisor, Jerry Wiley, in his individual capacity. Jamison's complaint sought damages, under Virginia's common law of tort, for alleged sexual assault and battery and intentional infliction of emotional distress.4 Most of the conduct of which Jamison complained was alleged to have occurred in the federal work place during working hours.
10
The United States Department of Justice initially agreed to undertake Wiley's representation, pursuant to federal statutory and regulatory provisions that authorize it to defend federal employees who are sued in tort for acts within the scope of their employment. See 28 U.S.C. Sec. 2679(c); 28 C.F.R. Sec. 50.15 (1993). On Wiley's behalf, the United States Attorney for the Western District of Virginia removed the action to federal court, invoking in his notice both 28 U.S.C. Sec. 1442(a)(1), which authorizes a federal officer to remove any civil or criminal action brought against him for any act under color of his office, and the removal provision of the Westfall Act, 28 U.S.C. Sec. 2769(d)(2). Notice of Removal pp 3-7. With the notice of removal, the United States Attorney filed a request for substitution of the United States as the sole party defendant, pursuant to the Westfall Act, together with an appropriate certification that the events giving rise to the action had occurred within the scope of Wiley's federal employment. Shortly thereafter, the district court entered an order substituting the United States for Wiley as the sole party defendant, as it was required to do by 28 U.S.C. Sec. 2769(d)(2).
11
Jamison moved the district court for reconsideration of its order of substitution, contending that the conduct of which she complained had not occurred in the scope of Wiley's federal employment.5 While that motion was pending before the district court, a panel of this Court decided Johnson v. Carter, 939 F.2d 180 (4th Cir.1991), which held that while a Justice Department scope certification is conclusive under the Westfall Act for purposes of removal, it is subject to judicial review for purposes of substitution. 939 F.2d at 183 n. 5.6
12
On August 16, 1991, the district court issued an order vacating its initial order of substitution as "improvident[ ]" and announcing that it would conduct its own independent inquiry into the scope-of-employment issue for purposes of substitution, as it was authorized to do by the panel decision in Johnson. Though the court's order reinstated Wiley as the named defendant, it made clear that it was not making a final ruling on the substitution question at that time. The court explained that while some of Wiley's alleged misconduct was obviously outside the scope of his employment under applicable law, it could not determine whether the rest of it was without further "factual inquiry." The court therefore scheduled an evidentiary hearing "to determine whether any of the acts alleged were within the scope of Wiley's employment."
13
Before this evidentiary hearing was held, the Justice Department undertook its own independent review of the case to determine whether its continued representation of Wiley was appropriate under 28 C.F.R. Secs. 50.15(b)(1) and (b)(2), which forbid the Justice Department to represent federal employees in cases where the conduct giving rise to the suit "does not reasonably appear to have been performed within the scope of his employment with the federal government" or the Justice Department determines that such representation "is not in the interests of the United States." The Justice Department decided that its initial decision to afford Wiley representation had been "improvident" and moved to withdraw as his counsel. The district court granted the government's motion to withdraw in October of 1991.
14
In December 1991, the district court held the evidentiary hearing called for in its order of August 16, 1991. At that hearing, the court heard testimony from both Jamison and Wiley. On cross-examination, Wiley admitted to, among other things, putting his hand up Jamison's skirt, running his finger over her bare stomach, snapping her bra, and blowing smoke in her eyes.
15
On April 20, 1992, the Justice Department notified the district court that it was formally withdrawing its earlier certification that Wiley had been acting within the scope of his employment, as it was authorized to do by its own regulation implementing the Westfall Act, 28 C.F.R. Sec. 15.3(a). The Justice Department's notice stated that its withdrawal of certification was based on "further evaluation of the relevant facts and the consideration of new and additional evidence," but did not specify what that additional evidence was.
16
Ten days later, on April 30, 1992, the district court issued an order remanding the action to state court. In an accompanying memorandum opinion the district court found, based on the evidence produced at the evidentiary hearing and the Justice Department's subsequent withdrawal of certification, that "the acts at issue were not within the scope of Wiley's employment, that the withdrawal of certification was appropriate, and that the case should be remanded to the state court."7
17
Wiley filed a timely notice of appeal from the order of April 30, 1992. On appeal, he challenges the district court's ruling that he was not entitled to have the United States substituted for him as defendant, as well as its subsequent decision to remand this case to state court.
II.
18
At the outset, we must address Jamison's argument that we lack jurisdiction to entertain any portion of Wiley's appeal. Jamison contends that we lack jurisdiction to review the district court's ruling on the substitution question, because Wiley failed to file a timely notice of appeal from the district court's order of August 16, 1991, which re-substituted him as the named defendant. She then argues that 28 U.S.C. Sec. 1447(d), which generally forbids review of orders of remand, deprives us of jurisdiction to review any part of the order of April 30, 1992, from which Wiley did file a timely notice of appeal.8 She therefore concludes that we must dismiss Wiley's entire appeal for lack of appellate jurisdiction.
19
We disagree, being satisfied that we have jurisdiction to review both the district court's ruling on the substitution issue and its remand order.
A.
20
We take first Jamison's argument that Wiley's failure to file a timely notice of appeal from the August 16, 1991 order of resubstitution somehow deprives us of jurisdiction to review the district court's ultimate decision on the substitution question. The argument is that the August 16 order of resubstitution was immediately appealable, and that when Wiley failed to file a timely notice of appeal from it, he thereby forfeited his right to all appellate review of the district court's holding on the substitution issue. We disagree.
21
In the first place, we do not think the August 16, 1991 order of resubstitution was immediately appealable. As Jamison concedes, it was not a "final judgment" in the traditional sense, because it did not terminate the action or any part of it. Though Jamison contends that it was immediately appealable under the collateral order doctrine of Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225, 93 L.Ed. 1528 (1949), because it finally denied a claim of absolute immunity under the Westfall Act, we cannot agree. The order does not meet the first--and most fundamental--requirement for appealability under Cohen, because it did not "conclusively determine" the issue in dispute: whether Wiley was entitled to have the United States substituted for him as defendant. See Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 276, 108 S.Ct. 1133, 1136, 99 L.Ed.2d 296 (1988). In that order, the district court announced that it would follow the panel decision in Johnson v. Carter and conduct its own independent review of the scope-of-employment issue for purposes of substitution. It therefore vacated its earlier order substituting the United States for Wiley, which had been entered solely on the basis of the Attorney General's scope certification, and directed that an evidentiary hearing be held to determine whether Wiley had in fact been acting within the scope of his employment. Though the district court also directed that Wiley be resubstituted as the named defendant, it made clear that its decision to do so was a tentative one, made only to return things to the status quo at the time of removal, and that it might well change its mind and resubstitute the United States after the evidentiary hearing.9 Such a tentative and preliminary ruling on a disputed issue, which plainly holds open the prospect of reconsideration and alteration by the district court itself, is not sufficiently "final" to be appealable under the collateral order doctrine. See Schrob v. Catterson, 967 F.2d 929, 936-38 (3d Cir.1992) (order tentatively denying motion for substitution under the Westfall Act, pending further discovery and evidentiary hearing, not sufficiently "final" to be appealable under the Cohen doctrine); see also 15A C. Wright, A. Miller & E. Cooper, supra, Sec. 3911.1, at 372 & n. 4.10
22
Because the district court's August 16, 1991 order of resubstitution was not immediately appealable, Jamison's argument that Wiley forfeited his right to appellate review of the substitution ruling by failing to file a timely notice of appeal from that order must fail.11 The district court did not make a final ruling on the substitution question until the order of April 30, 1992, from which Wiley did file a timely notice of appeal. Whether we have jurisdiction to review the district court's ruling on the substitution question thus depends on whether we have jurisdiction to review that order. It is to that question that we now turn.
B.
23
Jamison argues that 28 U.S.C. Sec. 1447(d) bars us from reviewing the April 30, 1992 order. Section 1447(d) provides that "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise," subject to an exception for civil rights cases which is not applicable here. Jamison contends that the April 30, 1992 order was such "a remand order and nothing more," and that Sec. 1447(d) therefore precludes its review. Again, we disagree.
24
First off, Jamison's suggestion that the order of April 30, 1992 was "a remand order and nothing more" is wrong. The memorandum opinion that accompanied the order made it clear that the district court was ruling not only that the case should be remanded to state court, but also--and preliminarily--that Wiley was not entitled to have the United States substituted for him as defendant under the Westfall Act, because the acts in question were not within the scope of his federal employment under Virginia law. The order of April 30, 1992 thus embodied two separate rulings: a determination that Wiley was not entitled to have the United States substituted for him as defendant under the Westfall Act, and a determination that the case should therefore be remanded to state court. We are satisfied that Sec. 1447(d) does not prevent our reviewing either aspect of that order.
25
In the first place, we do not think that Sec. 1447(d) prevents us from reviewing the portion of the April 30, 1992 order that remanded this action to state court. On its face, Sec. 1447(d) appears to preclude appellate review of all remand orders, regardless of basis. But as we all know, the Supreme Court has declined to give Sec. 1447(d) such a literal meaning, holding instead that it insulates from review only those remand orders that are based on grounds specified in 28 U.S.C. Sec. 1447(c). Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 346, 96 S.Ct. 584, 590, 46 L.Ed.2d 542 (1976) ("only remand orders issued under Sec. 1447(c) and invoking the grounds specified therein ... are immune from review under Sec. 1447(d)"). Section 1447(c) mentions only two grounds for remand: a defect in removal procedure and a lack of subject matter jurisdiction in the federal court.12 The order of remand in question here cannot fairly be characterized as one that was based on either of these grounds.
26
Neither the order of remand itself nor the accompanying memorandum opinion ever mentions Sec. 1447(c) or its critical terms. Such a failure to specifically invoke the "magic words" of Sec. 1447(c) is, of course, not fatal to application of Sec. 1447(d). See Kolibash v. Committee on Legal Ethics of W. Va. Bar, 872 F.2d 571, 573 (4th Cir.1989) (district court "is not required to invoke the specific language of Sec. 1447(c)" in order to implicate Sec. 1447(d)'s ban on review) (citing Gravitt v. Southwestern Bell Tel. Co., 430 U.S. 723, 97 S.Ct. 1439, 52 L.Ed.2d 1 (1977)). But we have never applied Sec. 1447(d) when the district court has failed to specifically mention either Sec. 1447(c) or its magic words, absent some clear indication in the record that the district court nonetheless intended--rightly or wrongly--to remand on one of the grounds listed therein. Compare Three J Farms, Inc. v. Alton Box Board Co., 609 F.2d 112, 115-16 (4th Cir.1979) (applying Sec. 1447(d) where district court's order of remand "clearly determined that there was an absence of federal jurisdiction and ... that the case ha[d] been 'removed improvidently' "), cert. denied, 445 U.S. 911, 100 S.Ct. 1090, 63 L.Ed.2d 327 (1980), with Kolibash, 872 F.2d at 573 (declining to apply Sec. 1447(d) to remand order where court did not "pose the propriety of remand in the terms of [1447(c) ]" and "did not apply the Sec. 1447 standard"). See also Commonwealth v. V & M Management, Inc., 929 F.2d 830, 832-33 (1st Cir.1991) (declining to apply Sec. 1447(d) where no evidence that district court based its remand order on a Sec. 1447(c) ground); Karl Koch Erecting Co., Inc. v. New York Convention Center Dev. Corp., 838 F.2d 656, 658 (2d Cir.1988) (declining to apply Sec. 1447(d) where district court in remanding "neither mentioned Section 1447(c) nor questioned the jurisdiction or propriety of [the] removal"). We find no such evidence here.
27
There is no evidence in the record to suggest that the district court based its decision to remand on a perceived defect in removal procedure, and Jamison does not contend that there is. What she does contend is that the district court based its order of remand on a perceived lack of subject matter jurisdiction, but we find no evidence of that either. Neither the April 30, 1992 order nor the accompanying memorandum opinions ever mention either "jurisdiction"--or lack thereof--at all. Jamison contends that the court's inquiry into the scope-of-employment issue was "a fundamental inquiry into its own jurisdiction," Brief at 14, but this assertion cannot be squared with the district court's repeated statements that the source of its removal jurisdiction was the federal officer removal statute, 28 U.S.C. Sec. 1442(a)(1), rather than the removal provision in the Westfall Act.13 Instead, we think the record below, fairly read, makes quite clear that the district court was remanding not because it believed it lacked jurisdiction over the removed action, but because it thought it had discretion to decline to exercise that jurisdiction once it decided that the United States was not the proper defendant and thus that there was no FTCA claim in the case. Such a discretionary remand of state-law claims that are properly within the federal removal jurisdiction is not a remand on a Sec. 1447(c) ground that is insulated from appellate review by Sec. 1447(d). See Kolibash, 872 F.2d at 573 (section 1447(d) does not bar appellate review of remand order which was not based on a perceived lack of jurisdiction or defect in removal procedure, but instead "represented a discretionary decision by the district court not to hear a certain case on grounds of public policy"); see also V & M Management, 929 F.2d at 833; Rothner v. City of Chicago, 879 F.2d 1402, 1406-07 & n. 5 (7th Cir.1989); J.O. v. Alton Community Unit School Dist. 11, 909 F.2d 267, 270 (7th Cir.1990).
28
We therefore conclude that Sec. 1447(d) does not prevent our reviewing the portion of the order of April 30, 1992 that remanded this action to state court. See Thermtron, 423 U.S. at 345-46, 96 S.Ct. at 590; Kolibash, 872 F.2d at 573.
29
Nor do we think Sec. 1447(d) prevents us from reviewing the portion of the April 30, 1992 order that finally resolved the issue of substitution under the Westfall Act. The Supreme Court has made clear that Sec. 1447(d)'s bar on appellate review does not extend to decisions that precede an order of remand, both "in logic and in fact," even when those decisions create the circumstances which give rise to the decision to remand. See Waco v. United States Fidelity & Guar. Co., 293 U.S. 140, 143, 55 S.Ct. 6, 7, 79 L.Ed. 244 (1934). See generally 1A J. Moore & B. Ringle, Moore's Federal Practice p 0.169[2.-2] (1993) at 702-03. Relying on Waco, the Fifth Circuit recently held that while Sec. 1447(d) prevented it from reviewing a district court order that remanded a Westfall Act case to state court, because that order of remand was expressly--albeit erroneously--based on the conclusion that the court lacked jurisdiction over the case, Sec. 1447(d) did not prevent it from reviewing a portion of the same order that vacated an earlier order substituting the United States as defendant under the Westfall Act and resubstituted the employee as defendant. Mitchell v. Carlson, 896 F.2d 128, 132-33 (5th Cir.1990). As the court explained:
30
[T]he resubstitution order ... is separable from the remand order and may be subject to review on appeal. The district court dismissed the United States as a defendant and resubstituted [the employee] while it still had control of the cause. Only then did the court remand the case to state court.... Thus, the resubstitution order being prior to and separable from the remand order, Sec. 1447(d) does not bar us from review of the resubstitution order.
31
Id.
32
We think the present case is indistinguishable from Mitchell, insofar as the effect of Sec. 1447(d) on the appealability of the order of resubstitution is concerned. The district court decided that Wiley was not entitled to have the United States substituted for him as defendant in this action before it decided to remand the case to state court, while it still had control of the case. That decision, which was made prior to, and is separable from, the decision to remand, is not subject to the limitations of Sec. 1447(d). See Mitchell, 896 F.2d at 132-33; Waco, 293 U.S. at 143, 55 S.Ct. at 7. Accordingly, independently of any question of the appealability of the remand portion of the April 30, 1992 order, Sec. 1447(d) does not prevent our reviewing the substitution ruling embodied in that order.
C.
33
There remains one final question: the source of our jurisdiction to review the April 30, 1992 rulings on substitution and remand once we have determined that Sec. 1447(d) does not act as an independent bar to review of either. The order in which they were embodied was not a "final judgment" in the traditional sense of the term, since it did not actually terminate the action or any part thereof, but simply sent it back to the state court from which it came. See Thermtron, 423 U.S. at 352-53, 96 S.Ct. at 593-94 (order remanding entire case to state court from which it has been removed is not a final judgment reviewable by appeal). But the portion of that order that held that Wiley was not entitled to have the United States substituted for him as defendant under the Westfall Act, unlike the earlier order of resubstitution, was appealable under Cohen, because it finally and conclusively denied a claim of absolute immunity. See Mitchell v. Carlson, 896 F.2d at 133. We need not decide whether the scope of that interlocutory appeal would properly encompass the district court's subsequent ruling that the case should be remanded to state court, because Thermtron indicates that our only power to review such a remand order is through a petition for a writ of mandamus, as opposed to a direct appeal under 28 U.S.C. Sec. 1291. 423 U.S. at 352-53, 96 S.Ct. at 593-94. We will therefore treat Wiley's effort to take a direct appeal from the order of remand as a petition for a writ of mandamus, which we may entertain subject to the normal limitations on mandamus relief. See J.O., 909 F.2d at 271; Rothner, 879 F.2d at 1418.
34
To sum up, we conclude that we have jurisdiction to review both the district court's ruling that Wiley is not entitled to have the United States substituted for him as defendant and its subsequent order of remand. Our review of the district court's ruling on the substitution issue is by direct appeal; our review of the remand order by writ of mandamus.
III.
35
We turn now to the merits of Wiley's appeal. Wiley contends that the district court erred both in refusing to substitute the United States for him as defendant and in deciding to remand the case to state court. We take these in turn.
A.
36
Wiley contends that the district court erred in refusing to substitute the United States for him as defendant for three basic reasons. We find no merit in any of these arguments.
37
(1)
38
Wiley's principal argument is that the Justice Department's initial certification that he was acting within the scope of his employment conclusively established that he was entitled to have the United States substituted for him as defendant under the Westfall Act; and that the Department could not thereafter withdraw the certification, nor could the district court in effect undo it by a contrary fact-finding. He relies on the fact that 28 U.S.C. Sec. 2679(d)(2) provides that "[u]pon certification by the Attorney General that the defendant employee was acting within the scope of his office or employment, ... the United States shall be substituted as the party defendant." (emphasis added). He maintains that this provision not only required the district court to substitute the United States for him as defendant upon the Justice Department's issuance of its scope certification, but also conclusively resolved the matter of substitution, depriving both the Justice Department and the court of all power to reconsider the matter. We disagree.
39
First off, we reject Wiley's suggestion that the Westfall Act does not permit the Justice Department to withdraw a scope certification once it has been issued. The Justice Department regulation implementing the Westfall Act specifically authorizes such withdrawals by the United States Attorneys "if a further evaluation of the relevant facts or the consideration of new or additional evidence calls for such action." 28 C.F.R. Sec. 15.3(a). Wiley has pointed to nothing in the Westfall Act that casts doubt on the validity of this regulation, and we find it inconceivable that Congress could have intended to give the Justice Department power to issue scope certifications that have the effect of irretrievably exposing the Government to financial liability, without also giving it the concomitant authority to withdraw any it discovers have been issued in error. We conclude that the Justice Department may withdraw previously-issued scope certifications in accordance with the provisions of 28 C.F.R. Sec. 15.3(a), and that the withdrawal here was authorized under that regulation.
40
We also reject Wiley's fall-back argument that the district court was required to accord the Justice Department's initial scope certification conclusive effect for purposes of substitution, even after it was withdrawn. On first blush, such a conclusion might be thought to follow from our decision in Johnson, which held that a certification from the Justice Department conclusively establishes scope of employment for purposes of Westfall Act substitution. 983 F.2d at 1319-21. But we did not hold in Johnson that a scope certification remains conclusive for purposes of Westfall Act substitution even after it has been withdrawn by the Justice Department; that issue was not presented by the facts of Johnson, as the scope certification at issue there had not been withdrawn, and any language in Johnson that suggests such a result must necessarily be regarded as dicta.
41
Addressing the issue squarely for the first time here, we hold that a scope certification from the Justice Department remains conclusive for purposes of Westfall Act substitution only so long as it remains in effect, and that it ceases to have conclusive effect--at least for purposes of such substitution14--once it has been withdrawn by the Justice Department itself. Section 2679(d)(2)'s statement that "[u]pon certification by the Attorney General ..., the United States shall be substituted as the party defendant" requires the district court to substitute the United States as defendant, without further inquiry, upon the Justice Department's issuance of a scope certification. But it cannot fairly be read to deprive the district court of authority to revisit the substitution issue if the Justice Department itself later withdraws that scope certification. Such a reading of the statute would be manifestly inconsistent with the fundamental premise of Johnson: that Congress intended the federal courts to defer to the Justice Department on the question of when a suit against a federal employee should be converted into a suit against the United States that exposes the federal treasury to financial liability. The withdrawal expresses the Justice Department's view that the United States is not the proper defendant in the action, and it would violate the very principle of deference upon which Sec. 2679(d)(2) is based to require the federal courts to hold the United States to a scope certification that the Justice Department has since determined to be erroneous.
42
We must also reject, however, any suggestion that the Justice Department's withdrawal of certification itself conclusively resolves the scope-of-employment issue for purposes of Westfall Act substitution. The Act expressly provides that "[i]n the event that the Attorney General has refused to certify scope of office or employment," the court may conduct its own independent inquiry into the scope-of-employment issue, for purposes of substitution, if requested to do so by the employee. 28 U.S.C. Sec. 2679(d)(3). We see no basis for distinguishing, for purposes of Sec. 2679(d)(3), between an initial refusal to certify that the employee was acting within the scope of his employment and a decision to withdraw a scope certification previously issued; in both instances, the Justice Department has expressed its view that the United States is not the proper defendant because the employee was not acting in the scope of his employment, and the employee is entitled to have the scope-of-employment issue resolved by the district court if he disagrees.
43
In this case, the Justice Department issued a scope certification initially, but withdrew it before the district court made its final decision that Wiley was not entitled to have the United States substituted for him as defendant. The Justice Department's withdrawal of the scope certification left the district court free to conduct its own independent inquiry into the scope-of-employment issue under Sec. 2679(d)(3) for purposes of substitution, if asked to do so by Wiley. While Wiley made no formal request to the court to "find and certify" that he had been acting in the scope of his employment, he did actively oppose Jamison's request to have him reinstated as defendant, both before and after the withdrawal of certification, and we think that sufficient to satisfy Sec. 2679(d)(3). We therefore conclude that the district court did not err in conducting its own independent inquiry into the scope-of-employment issue for purposes of substitution.15
44
(2)
45
Wiley argues next that even if the district court had the authority to conduct an independent inquiry into the scope-of-employment issue in this case, it erred in holding an evidentiary hearing on that issue. We disagree.
46
The federal courts of appeals have consistently recognized that a district court has the power to hold a limited evidentiary hearing to resolve factual disputes that bear on a scope-of-employment issue properly before it in a Westfall Act case. See, e.g., Schrob v. Catterson, 967 F.2d 929, 935-36 (3d Cir.1992); McHugh v. University of Vermont, 966 F.2d 67, 74 (2d Cir.1992); Brown v. Armstrong, 949 F.2d 1007, 1011-12 (8th Cir.1991); Nasuti v. Scannell, 906 F.2d 802, 810 (1st Cir.1990). Wiley does not appear to dispute this general proposition; instead, he contends that the district court should not have required him to submit to an evidentiary hearing in this case, because the allegations in Jamison's pleadings made clear that all of the acts of which she was complaining were within the scope of his employment as a matter of law.
47
Wiley's argument, which ignores or mischaracterizes most of Jamison's complaint, is flatly without merit. In paragraph 4 of the complaint and the corresponding portion of the bill of particulars, Jamison specifically alleges that Wiley committed various acts of sexual harassment. Wiley makes no effort to explain how those alleged acts are "facially" within the scope of his employment under Virginia law; instead, he simply ignores them and concentrates on paragraph 5, which contains allegations of various acts of on-the-job harassment of a non-sexual nature. Even those allegations, however, involve conduct that may or may not be within the scope of employment under Virginia law, depending on the motives behind it. See Tri-State Coach Corp. v. Walsh, 188 Va. 299, 304-07, 49 S.E.2d 363, 366-67 (1948) (an employee's torts are within the scope of his employment only if their "ultimate purpose ... is in furtherance of the [employee's] duties and in execution of [his] master's business," as opposed to "aris[ing] wholly from some external, independent, and personal motive on the part of the [employee] to do the act upon his own account"); Sayles v. Piccadilly Cafeterias, Inc., 242 Va. 328, 332, 410 S.E.2d 632, 634 (1991) (same). Because it was not clear from the face of Jamison's pleadings that Wiley's ultimate purpose in committing the acts of non-sexual harassment complained of in paragraph 5 was to further his federal employer's interests, as opposed to his own personal interest in retaliating against Jamison for rejecting his sexual advances, the district court quite properly concluded that it could not decide whether all of the conduct of which Jamison complained involved acts within the scope of Wiley's employment from the face of Jamison's pleadings alone. Accordingly, the district court did not abuse its discretion in holding an evidentiary hearing on the scope-of-employment issue.
48
(3)
49
Wiley contends finally that the district court's findings on the scope-of-employment issue, even if procedurally correct, were substantively erroneous.
50
Wiley concedes that some of the acts of which Jamison complains (e.g., the acts of alleged sexual assault and battery) were not within the scope of his employment, and that the district court properly refused to substitute the United States as defendant with respect to the claims arising out of those acts. But he maintains that other acts of which Jamison complains--in particular, the instances of unfair criticism of her job performance alleged in paragraph 5 of the complaint--were within the scope of his employment, and that the district court erred when it failed to sever the claims arising from those acts from the others and substitute the United States as defendant with respect to them. We disagree.
51
Whether an employee's action falls within the scope of his employment under the Westfall Act is to be determined according to the rules of respondeat superior of the state in which the wrongful conduct occurred. Johnson v. Carter, 983 F.2d at 1322. As the district court recognized and Wiley now concedes, under Virginia law, an act is within the scope of employment only if it is "fairly and naturally incident to [the master's] business, ... done while the servant was engaged upon the master's business and ... done, although mistakenly or ill-advisedly, with a view to further the master's interests, or from some impulse or emotion which naturally grew out of or was incident to the attempt to perform the master's business, and did not arise wholly from some external, independent, and personal motive on the part of the servant to do the act upon his own account." Sayles, 242 Va. at 332, 410 S.E.2d at 634 (citing Tri-State Coach, 188 Va. at 307, 49 S.E.2d at 367). Applying these principles, the district court found, after hearing the testimony of both Jamison and Wiley, that the acts of non-sexual harassment alleged in paragraph 5 of the complaint were not within the scope of Wiley's federal employment, because they were not done with the intent to further the interests of Wiley's governmental employer, but resulted wholly from his "external, independent, and personal motive" to retaliate against Jamison for rejecting his sexual advances. Wiley has not convinced us that this finding of fact, which depended critically on the district court's assessment of the relative credibility of the witnesses, was clearly erroneous. We therefore conclude that the district court did not err in finding that all of the acts of which Jamison complains were outside the scope of Wiley's federal employment.
B.
52
We turn, finally, to the question whether the district court erred in remanding this case to state court. As indicated, the district court remanded the case because it found that the misconduct alleged had not occurred within the scope of Wiley's federal employment and that he was therefore not entitled to have the United States substituted for him as sole defendant under the Westfall Act. Wiley contends that the remand was improper chiefly because the case was properly removed under the federal officer removal statute, 28 U.S.C. Sec. 1442(a)(1), as well as the removal provision in the Westfall Act, and a district court has no authority to remand claims that are properly removed under Sec. 1442(a)(1) simply because it decides that the defendant was not acting within the scope of his employment within the meaning of the Westfall Act. Alternatively, he contends that even if the case had been removed solely under the removal provision in the Westfall Act, the district court was prohibited from remanding even after it decided that he was not acting within the scope of his employment, because the Justice Department had certified, at the time of the removal, that his acts were within the scope of his employment, and the Westfall Act specifically provides that such a certification shall "conclusively establish scope of employment for purposes of removal." 28 U.S.C. Sec. 2679(d)(2).
53
Wiley's removal petition clearly invoked two separate and alternative removal statutes, both of which authorize removal of cases to federal court even though they could not have been brought there originally: the general federal officer removal provision, 28 U.S.C. Sec. 1442(a)(1), and the more specific removal provision of the Westfall Act, 28 U.S.C. Sec. 2679(d)(2). See Notice of Removal pp 3-7. The two removal provisions, though often overlapping, are not identical. The first authorizes "[a]ny officer of the United States, or any ... person acting under him," to remove any "civil action or criminal proceeding" brought against him in a state court "for any act under color of such office." 28 U.S.C. Sec. 1442(a)(1). The second, by contrast, authorizes "any employee of the [federal] Government" to remove any "civil action or proceeding for money damages" brought against him in a state court for injury to person or property resulting from his negligent or wrongful conduct, upon a finding, either administrative or judicial, that he was "acting within the scope of his office or employment at the time of the incident out of which the claim arose." 28 U.S.C. Sec. 2679(d)(2); see id. Sec. 2679(b)(1). As Wiley points out, he was entitled to have this action remain in federal court if removal jurisdiction existed under either of these two alternative provisions.
54
See Mitchell, 896 F.2d at 131-32 n. 3 (recognizing that Sec. 1442(a)(1) provides federal officer named as defendant in a state tort action with a right of removal "separate and apart from" that provided by the removal provision in the Westfall Act); Nadler v. Mann, 951 F.2d 301, 306 n. 9 (11th Cir.1992) (same).16
55
We agree with Wiley that removal was proper under Sec. 1442(a)(1). The Supreme Court has interpreted Sec. 1442(a)(1) as guaranteeing a federal officer the right to remove an action commenced against him in state court when he can allege a "colorable" federal defense to that action "arising out of [his] duty to enforce federal law." Mesa v. California, 489 U.S. 121, 133, 109 S.Ct. 959, 966-67, 103 L.Ed.2d 99 (1988). The defendant need not prove that he will actually prevail on his federal immunity defense in order to obtain removal; indeed, "one of the most important reasons for removal is to have the validity of the [federal] defense of official immunity tried in a federal court." Id. at 133, 109 S.Ct. at 966, quoting Willingham v. Morgan, 395 U.S. 402, 406-07, 89 S.Ct. 1813, 1815-16, 23 L.Ed.2d 396 (1969). In his removal petition, Wiley specifically alleged, as the basis for removal, that Jamison's charges were based on "acts allegedly done by [Wiley] under the color of his office as an employee of [the] United States," while he was "acting within the scope of his employment" as a "Supervisory Coal Mine Safety and Health Inspector for the United States Department of Labor." Notice of Removal p 3, 5. These allegations were sufficient to give rise to a colorable claim of absolute immunity under the Westfall Act, the validity of which Wiley was entitled to have judged by federal standards in a federal district court. See Willingham, 395 U.S. at 406-07, 89 S.Ct. at 1815-16; Kolibash, 872 F.2d at 575-76.17 When a case has been properly removed under Sec. 1442(a), the district court may remand it back to state court only if it thereafter discovers a defect in removal procedure or a lack of subject matter jurisdiction in the federal court. 28 U.S.C. Sec. 1447(c). Neither basis for remand exists here. Jamison does not contend, nor could she properly do so, that there was any kind of defect in the removal procedure utilized here. Nor is there any basis for concluding that the district court lacked subject matter jurisdiction over the removed action, simply because it determined that Wiley was not acting within the scope of his employment and the United States was therefore not the proper defendant in the action. Under Sec. 1442(a)(1), removal jurisdiction exists whenever the defendant-official asserts, in his removal petition, a "colorable" federal defense to the action. Mesa, 489 U.S. at 136-39, 109 S.Ct. at 968-70. By raising a colorable federal defense in his removal petition, the defendant-official transforms the otherwise nonremovable state-law action into one that falls within the federal court's "arising under" jurisdiction. See id. at 136-37, 109 S.Ct. at 968-69 (section 1442(a) creates exception to "well-pleaded complaint" rule which makes officer's assertion of federal defense adequate to confer federal question jurisdiction). That the federal court ultimately rejects the federal defense that supported removal under Sec. 1442(a)(1) does not mean that it thereby loses subject matter jurisdiction over the removed action; "the jurisdiction of the federal courts over a properly removed action will not be defeated by later developments in the suit." 14A C. Wright, A. Miller, & E. Cooper, supra, Sec. 3739, at 582.
56
To sum up, this case was properly removed under Sec. 1442(a)(1), because Wiley's removal petition alleged a colorable federal immunity defense. Nothing in the federal removal statutes authorizes the remand of a case that has been properly removed under Sec. 1442(a)(1) on the ground that the federal employee's immunity defense is later rejected. See 28 U.S.C. Sec. 1447(c). Absent such authorization, the district court had no right to decline to exercise jurisdiction over the removed action, and its decision to do so was an error of sufficient magnitude to merit mandamus relief. As we recognized in Kolibash, the removal jurisdiction granted by Sec. 1442(a), which is designed to protect federal employees against local prejudice, is mandatory, not discretionary, and a district court has no authority to abstain from the exercise of that jurisdiction on any ground other than the two specified in 1447(c). 872 F.2d at 575 ("discretionary abstention in the context of Sec. 1442(a)(1) removal is ... not available"); see also Thermtron, 423 U.S. at 35, 96 S.Ct. at 233 (Congress did not intend "to extend carte blanche authority to the district courts to revise the federal statutes governing removal by remanding cases on grounds that seem justifiable to them but which are not recognized by the controlling statute"). Compare Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988) (when removal jurisdiction is itself discretionary, district court has discretion to remand, rather than dismiss, case when it thinks it appropriate to decline to exercise that discretionary jurisdiction).18
IV.
57
In conclusion, we hold that we have jurisdiction to review both the district court's final ruling that Wiley's conduct required that the United States not be substituted for him as defendant in this action and the court's order remanding the action to state court; and, on the merits, we affirm the district court's ruling that Wiley, not the Government, was the proper defendant but reverse the court's order remanding the action to state court. Accordingly, we remand the action to the district court with directions to exercise jurisdiction over it in such further proceedings as are required.
58
SO ORDERED.
1
The FTCA, which generally waives the United States' sovereign immunity with respect to state-tort actions against it for injuries caused by the negligence of its employees acting within the scope of their employment, 28 U.S.C. Sec. 1346(b), contains a provision expressly excepting from that limited waiver of sovereign immunity all claims based on the discretionary acts or omissions of federal employees. 28 U.S.C. Sec. 2680(a). The courts have struggled for years to define the scope of this so-called "discretionary function" exception to the FTCA. See generally 14 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure: Jurisdiction 2d Sec. 3658 (1985) at 337-45
2
The scope of the absolute immunity created by the Westfall Act's "exclusive remedy" provision is not exactly the same in literal terms as the scope of the absolute immunity available under the pre-Westfall common law doctrine as defined in the Barr v. Matteo line of cases leading up to the Westfall decision. Whereas the pre-Westfall common law immunity cases had defined the immunity as extending to conduct "within the outer perimeter of [a federal employee's] line of duty," Barr v. Matteo, 360 U.S. at 575, 79 S.Ct. at 1341, the Westfall Act defines it as extending to conduct "within the scope of [the employee's] office or employment." 28 U.S.C. Sec. 2679(b)(1). The distinction appeared at first to be of little consequence, since the phrase "within the outer perimeter of the employee's official duties" was often used interchangeably with the phrase "within the scope of his employment" in the common law immunity cases. See, e.g., Westfall, 484 U.S. at 293, 295, 297-98, 108 S.Ct. at 582, 583, 584 ("within the scope of ... employment"); id. at 300, 108 S.Ct. at 585 ("within the outer perimeter of ... official[ ] duties"); id. at 294, 108 S.Ct. at 582 ("within the scope of ... duties"). It became important only when the lower courts later held that whether particular conduct was "within the scope of employment" for purposes of Westfall Act immunity was to be determined not by reference to a uniform body of federal common law, but by reference to the respondeat superior law of the state in which the conduct occurred. See Arbour v. Jenkins, 903 F.2d 416, 421-22 (6th Cir.1990); Nasuti v. Scannell, 906 F.2d 802, 805 n. 3 (1st Cir.1990); S.J. & W. Ranch, Inc. v. Lehtinen, 913 F.2d 1538, 1542 (11th Cir.1990), cert. denied, --- U.S. ----, 112 S.Ct. 62, 116 L.Ed.2d 37 (1991); Johnson v. Carter, 983 F.2d 1316, 1322 (4th Cir.) (en banc), cert. denied, --- U.S. ----, 114 S.Ct. 57, 126 L.Ed.2d 27 (1993)
3
The Attorney General has delegated this authority by regulation to the United States Attorneys, who make scope determinations in consultation with the Department of Justice. See 28 C.F.R. Sec. 15.3(a) (1993). The Attorney General is authorized to make such a delegation by 28 U.S.C. Sec. 510. The regulation giving the United States Attorneys authority to make scope determinations also specifically authorizes them to withdraw these certifications "if a further evaluation of the relevant facts or the consideration of new or additional evidence calls for such action." 28 C.F.R. Sec. 15.3(a)
4
Jamison alleged that between August 1987 and March 1988, while Wiley was serving as her supervisor, he had made unwanted sexual advances toward her. Motion for Judgment p 4. She also alleged that during the same period, he had "continually harassed [her] on the job," by smoking in her presence despite her allergy to smoke, listening in on her personal telephone calls, criticizing her work unjustly, and following her around town when she was on her own time. Id. p 5
5
Jamison's motion indicated that she preferred to proceed against Wiley himself, rather than the United States, because she thought the intentional tort exception to the FTCA, 28 U.S.C. Sec. 2680(h), would preclude any recovery against the United States under the FTCA. See JA 89
6
This aspect of the panel decision in Johnson was later rejected by the en banc court. Johnson v. Carter, 983 F.2d 1316, 1320-21 (4th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 57, 126 L.Ed.2d 27 (1993). The en banc decision in Johnson was not handed down until January of 1993, some eight months after the district court issued the order under review here
7
The court issued a corrected memorandum opinion to the same effect on May 4, 1992
8
Jamison also argues that portions of this appeal are moot. Brief at 10-11. We have considered this argument and find it to be wholly without merit
9
Had the court intended its August 16 order of resubstitution to finally resolve the issue of substitution, there would have been no need for it to hold an evidentiary hearing on the scope-of-employment issue, because that issue was relevant only to the issue of substitution. As the court recognized, JA 99, the Westfall Act specifically provides that the Attorney General's scope certification is conclusive for purposes of removal. 28 U.S.C. Sec. 2679(d)(2). Accordingly, the only conceivable reason for the district court to have scheduled an evidentiary hearing on the scope-of-employment issue was to aid its resolution of the substitution question, which, at the time, had been held by the later-vacated panel decision in Johnson to be judicially-reviewable
10
An order that conclusively denies a federal employee's request for substitution of the United States as defendant under the Westfall Act is a different matter. It is appealable under the collateral order doctrine because it is essentially a denial of a claim of absolute immunity. See infra p. 233-34; Mitchell v. Carlson, 896 F.2d 128, 133 (5th Cir.1990); cf. Nixon v. Fitzgerald, 457 U.S. 731, 741-43, 102 S.Ct. 2690, 2696-97, 73 L.Ed.2d 349 (1982); Mitchell v. Forsyth, 472 U.S. 511, 524-30, 105 S.Ct. 2806, 2571-75, 86 L.Ed.2d 411 (1985)
11
Even if Wiley had been entitled to take an interlocutory appeal from the August 16, 1991 order of resubstitution under Cohen, his failure to do so would not forfeit his right to appellate review of the rulings made in that order on timely appeal from a later appealable order that subsumed those rulings. The Cohen doctrine permits parties to take appeals from a particular class of interlocutory orders; it does not compel such appeals at peril of forfeiture for all time of the right to have rulings embodied in those orders reviewed. See Schwarz v. Folloder, 767 F.2d 125, 129 n. 4 (5th Cir.1985); Hunter v. Department of Air Force, 846 F.2d 1314, 1316 (11th Cir.1988) (such a rule of forfeiture " 'would turn the policy against piecemeal appeals on its head,' " by encouraging parties to "appeal immediately every order ... that even remotely could be conceived as falling within ... Cohen ") ( quoting In re Chicken Antitrust Litigation, 669 F.2d 228, 236 (5th Cir. Unit B 1982))
12
At the time of the Thermtron decision, Sec. 1447(c) authorized remand of any cases removed "improvidently and without jurisdiction." 28 U.S.C. Sec. 1447(c) (1982). In 1988, the statute was amended to authorize remand on the basis of either a "defect in removal procedure" or the lack of "subject matter jurisdiction" in the federal court. Pub.L. 100-702, Sec. 1016, 102 Stat. 4670 (codified at 28 U.S.C. Sec. 1447(c) (1990)). The amended version of the statute applies here, but the change in language has no effect on this case
13
The United States removed the action to federal court on the basis of the general federal officer removal statute, 28 U.S.C. Sec. 1442(a)(1), as well as the separate removal provision in the Westfall Act. Removal Petition pp 3-7. The district court plainly believed that the source of its removal jurisdiction was Sec. 1442(a)(1), rather than the Westfall Act: it stated repeatedly that "[t]h[is] action was removed to this court pursuant to 28 U.S.C. Sec. 1442," and it never referred to the Westfall Act as the source of removal jurisdiction. See JA 98 (opinion and order of August 16, 1991), 173 (memorandum opinion accompanying order of April 30, 1992), 178 (corrected version of same opinion)
Because the district court believed Sec. 1442(a)(1) to be the source of its removal jurisdiction, its inquiry into the scope-of-employment issue cannot fairly be interpreted as an inquiry into its own jurisdiction. Unlike the removal provision in the Westfall Act, Sec. 1442(a)(1) does not condition the right to removal on a finding, either administrative or judicial, that the defendant acted within the scope of his federal employment; instead, it permits "[a]ny officer of the United States, or any ... person acting under him," to remove any action brought against him in a state court "for any act under color of such office." 28 U.S.C. Sec. 1442(a)(1) (emphasis added). The district court made no express finding that Wiley was not acting under color of his office for purposes of Sec. 1442(a)(1), and it gave no indication that it thought--rightly or wrongly--that such a finding was implicit in its holding that Wiley was not acting within the scope of his employment for purposes of Westfall Act substitution. Compare Mitchell v. Carlson, 896 F.2d at 131-32 & n. 3 (section 1447(d) applied to bar review of remand order in Westfall Act case, where district court expressly stated that it was remanding because it believed--albeit erroneously--that it lacked jurisdiction over the removed action).
14
It is, however, quite possible that the withdrawal of a scope certification does not give the district court the right to reopen the scope-of-employment issue for purposes of removal, as opposed to substitution. Section 2679(d)(2) provides that "[t]he certification of the Attorney General shall conclusively establish scope of office or employment for purposes of removal," and removal jurisdiction is normally determined on the basis of facts at the time of the removal, regardless of what happens thereafter. It may well be that these principles in combination require a district court to accord conclusive effect to a Justice Department scope certification, even after its withdrawal, for purposes of removal, as opposed to substitution. But that precise issue is not before us in the present case, and we reserve its resolution for another day. See infra n. 17
15
It is true that the district court vacated its initial order of substitution and held an evidentiary hearing on the scope-of-employment issue prior to the Justice Department's withdrawal of its scope certification. Under our en banc decision in Johnson, those actions were improper, because the district court had no authority to conduct its own independent inquiry into the substitution question while the scope certification was outstanding. But those procedural errors were harmless, since the district court did not make its final ruling on the substitution question until after the Justice Department had withdrawn its scope certification
16
There is no evidence that the removal provision in the Westfall Act was intended to repeal by implication the availability of the general federal officer removal statute in cases where the officer is being sued under state tort law. To the contrary, the Westfall Act's removal provision seems to have been intended to complement that more general provision, by relieving an officer who can obtain a Justice Department scope certification from the obligation to show that he has a colorable federal defense in order to obtain removal
17
Of course, a defendant cannot satisfy Mesa 's requirement that he demonstrate a colorable federal defense simply by reciting Sec. 1442(a)'s "color of office" language in his removal petition "if the underlying facts averred, or ... existing on the whole record before the court," make clear that he cannot possibly make out a colorable federal defense. State v. Ivory, 906 F.2d 999, 1001 n. 4 (4th Cir.1990); see Mesa, 489 U.S. at 133, 109 S.Ct. at 966 (mere allegation, in removal petition, that conduct complained of occurred "while defendant[s] [were] on duty and acting in the course and scope of [their] employment with the [federal government]" was not sufficient to support removal under Sec. 1442(a)(1), where it was clear that defendants "ha[d] not and could not present an official immunity defense to the state criminal prosecutions brought against them"); Ivory, 906 F.2d at 1001 n. 4 (same)
But that is not the case here. Unlike Mesa and Ivory, this is not a case in which it was clear from the underlying facts averred or existing on the record at the time of the removal that the federal employee seeking removal clearly could not present a federal immunity defense to the action being brought against him in state court. Jamison's complaint sought to impose liability upon Wiley under the common law of tort, and Wiley's claim that he was immune from such liability under the Westfall Act was not frivolous, as evidenced by the fact that the Justice Department initially certified that he was, and that the district court itself was unable to resolve the issue without holding an evidentiary hearing. Under these circumstances, it cannot be doubted that Wiley's removal petition raised a "colorable" federal immunity defense, which was in turn sufficient to support removal under Sec. 1442(a)(1). See Kolibash, 872 F.2d at 575.
18
Because we find that removal was proper under 28 U.S.C. Sec. 1442(a)(1), and that the district court erred in refusing to entertain the case on that ground, we need not decide whether a remand would have been permissible--or indeed required--upon the Justice Department's withdrawal of certification and the district court's subsequent finding that Wiley was not acting within the scope of his employment, had the sole basis for removal been the removal provision in the Westfall Act, 28 U.S.C. Sec. 2679(d) | 01-03-2023 | 04-16-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/530312/ | 887 F.2d 62
UNITED STATES of America, Plaintiff-Appellee,v.George AYALA, Raul Alfredo Portillo, and Oscar Reza,Defendants-Appellants.
No. 88-1880
Summary Calendar.United States Court of Appeals,Fifth Circuit.
Oct. 16, 1989.
Salvador C. Ramirez, El Paso, Tex., for defendants-appellants.
LeRoy Morgan Jahn, Asst. U.S. Atty., Helen M. Eversberg, U.S. Atty., San Antonio, Tex., for plaintiff-appellee.
Appeals from the United States District Court for the Western District of Texas.
Before POLITZ, GARWOOD and JOLLY, Circuit Judges.
GARWOOD, Circuit Judge:
1
Defendants-appellants George Ayala (Ayala), Raul Alfredo Portillo (Portillo), and Oscar Reza (Reza) appeal their convictions for conspiracy to possess with intent to distribute, and for possession with intent to distribute, one hundred pounds of marihuana in violation of 21 U.S.C. Secs. 841(a)(1) and 846, contending that the evidence adduced at trial was insufficient to support their convictions1. We reject this contention and affirm.
Facts and Proceedings Below
2
On March 10, 1988, after a tip from an informant that Ayala was trafficking in narcotics, U.S. Customs Service Special Agent Jimmy Searls (Searls) commenced surveillance of Ayala's activities, ultimately following him to an El Paso self-storage rental facility. At this point, Searls was unable to obtain a position from which to observe Ayala's actions inside the facility.
3
Later that day, Fred Shroeder (Shroeder), an investigator with the Customs Service, summoned Searls to the self-storage facility to show him a test vial containing debris found outside storage unit D-13 that had tested positive for marihuana. Although Searls was unable to detect a marihuana odor emanating from D-13 that evening,2 a Customs Service dog alerted at the door of the unit. As a result, the Customs Service rented a nearby unit from which agents could view unit D-13.
4
Searls testified that five days later he observed Ayala arrive at the storage unit under surveillance and open his car trunk, which Searls noticed contained a blue, hard-sided suitcase. Ayala opened the valise, exposing a black, plastic garbage bag surrounded by white towels that Searls believed were positioned to cushion the bag. Ayala then unlocked the door to unit D-13 with a key and entered it. From his vantage point, Searls was able to see inside the unit and notice that it housed a large scale and two dark-colored garbage bags, one of which Ayala weighed on the scale. Searls testified that after weighing the bag, Ayala completed his activity at D-13 for the day by storing the blue suitcase inside the unit and locking the door.
5
Shroeder testified that on March 22 he called the Customs Service canine unit to the self-storage rental facility in question to examine the exterior of unit D-13 and that, once again, the dog alerted at its entrance. Three days later, Shroeder observed Ayala return to unit D-13 to retrieve from it an unspecified number of bags, a few of which were plastic and others of which were white and marked with green writing. Ayala placed all of the bags inside the passenger's side of his car. Shroeder and Searls followed Ayala from El Paso as far as the U.S. Border Patrol checkpoint near Truth or Consequences, New Mexico. There, agents let Ayala pass after an apparently cursory inspection of his automobile.3
6
Upon returning to El Paso, Shroeder and Searls searched the garbage dumpster at the self-storage facility and discovered several black garbage bags and white nylon ones bearing green writing on the exterior similar to that seen by Shroeder earlier in the day on the white bags Ayala loaded in his car. Shroeder testified that the green markings appeared to indicate weights in kilograms. The white bags contained a green residue that smelled like marihuana and tested positive as such.
7
On April 12, 1988, while conducting a surveillance of Ayala's home, Shroeder and Searls observed a black Ford Bronco arrive at the house.4 Shroeder testified that he saw a man get out of the automobile and approach the house. He then discerned the same man talking to Ayala in his carport. Searls did not observe this initial contact between the two men, but he later saw two men, who appeared to him to be Mexican, leave the carport and enter the Bronco.5 Searls also saw Ayala exit the house carrying two suitcases that he loaded in the rear of the Bronco.6
8
Searls trailed the Bronco and its three passengers to the Amtrak passenger terminal in El Paso and followed the three inside the building. There Ayala split from Reza and the other passenger, both of whom entered the ticket line. From a place in line behind them, Searls was able to overhear Reza purchasing train tickets, although he was unable to make out the destination. After the suspects departed, Searls questioned the ticket agent and learned that Reza had purchased three tickets to Phoenix, Arizona, in the name of "L. Portillo." Fearing that a narcotics shipment would soon be leaving the city, Searls requested assistance from the El Paso Police Department, the United States Border Patrol, and the Drug Enforcement Agency (DEA).
9
Later in the day on April 12, the same black Ford Bronco returned to the Amtrak station, this time with four passengers. Border Patrol agent Jesse Shaw (Shaw) testified that the four--Ayala, Reza, Portillo, and co-defendant Victor Hernandez (Hernandez)--unloaded luggage from the vehicle and separated into two groups. Shaw followed Hernandez and Portillo, who was carrying a maroon suitcase as well as a light blue one, into the terminal. As the two neared the boarding area, Shaw and El Paso Police Sergeant Paul Irwin (Irwin) stopped them and requested identification, which they provided. When the officers asked Hernandez and Portillo to produce their tickets, Hernandez replied that only Portillo was traveling. Hernandez also answered Shaw's inquiry directed to Portillo about his destination, stating that Portillo was departing for a family-related visit to Phoenix. Shaw testified that Portillo said little, although when he spoke he did so in English. Because Hernandez insisted on doing most of the talking for the pair, the officers attempted to separate the two and interrogate them a few feet apart.
10
Shaw questioned Hernandez and asked him how he arrived at the train station. Hernandez responded that he and Portillo had hired a taxi; however, following Shaw's retort that he had seen the suspects show up at the station in a Bronco, Hernandez admitted that the pair had in fact arrived in the manner Shaw described and that he was at the station simply to drop off the appellants.
11
The officers' attempt to conduct separate interrogations failed when Irwin asked Portillo for consent to search his two suitcases because Hernandez again interrupted the questioning, advising Portillo in Spanish not to give consent. Shaw testified that during the officers' repeated requests for consent, Portillo said only a few words, appeared nervous, and seemed to look to Hernandez for counsel about what to say. When the officers asserted that they wanted Portillo to speak for himself, Hernandez told Portillo not to act until he saw a lawyer. Following an inspection of the suitcases by a narcotics dog that resulted in its alerting to them, the officers seized the suitcases and arrested Hernandez and Portillo.
12
El Paso Police officer Armando Fonseca (Fonseca) stopped the other two suspects, Reza and Ayala, as they entered the boarding area of the station and asked them if they would answer a few questions. Both agreed. Fonseca testified that Reza had two suitcases with him that appeared to be heavy because of the way he was carrying them, and that Ayala was toting a garment bag and a briefcase.
13
Fonseca began the questioning by asking Reza if he was boarding the train and, if so, to produce his ticket. Reza answered affirmatively and, with his hand visibly shaking, he presented Fonseca a ticket, which was issued in the name of "L. Portillo" for one-way passage to Phoenix. When Fonseca asked for other identification, Reza, still visibly nervous, displayed a driver's license bearing his actual name. Fonseca testified that Reza was unable to explain the discrepancy in the names.
14
After answering Fonseca's inquiry about the length and nature of his travel by stating that he was departing on a short trip to visit his father, Reza was unable to explain why he was carrying such large suitcases. Reza then responded to Fonseca's question about the nature of his association with Ayala by denying having ever seen him before.
15
Fonseca completed his interrogation of Reza by informing him that he was a narcotics officer and wanted to obtain his consent to search the suitcases. Reza rejoined that he did not understand the meaning of consent and asked if Fonseca had a search warrant. After failing to obtain consent to open the suitcases, Fonseca turned his attention to Ayala, who had paced nervously throughout the interrogation.
16
Ayala also held a one-way ticket to Phoenix in the name of "L. Portillo," although he asserted that his destination was Casas Grandes. In addition, after producing a driver's license in his own name, Ayala explained the difference in the names by asserting that someone else had purchased his train ticket for him.
17
Ayala maintained that he was traveling to Casas Grandes on business to examine property there for a Dallas developer. However, he was unable to provide Fonseca with the names of any of his contacts in Casas Grandes. Ayala also denied knowing Reza or the other two suspects and stated that he had arrived at the terminal by taxi. He further described the purported taxi driver's appearance to Fonseca, without realizing that Fonseca had earlier seen him arriving in the Bronco.
18
Fonseca testified that following the questioning and an examination of the suitcases by the narcotics dog, which alerted to them, Ayala reacted to the test results and his imminent detention by shaking his head "in a dejected manner." After search warrants were obtained, authorities found one hundred pounds spread among the four suitcases seized from Portillo and Reza. Though the suitcases contained some other items, the marihuana accounted for most of their weight. No illicit substances were discovered in Ayala's bags. Searls further testified that he examined the seized luggage and noted that one piece looked identical to the blue, hard-sided suitcase he had seen in Ayala's possession on March 15 at the self-storage facility. Except for essentially fruitless cross-examination of the government's witnesses, there was no defense evidence.
19
Following a bench trial, Ayala, Portillo, and Reza were convicted as charged on both counts. This appeal follows.
Discussion
20
Appellants' sole contention on this appeal7 is that the evidence was insufficient to support their convictions. In evaluating such a challenge, we must examine the evidence as a whole in the light most favorable to the verdict and must afford the government the benefit of all reasonable inferences and credibility choices drawn therefrom. Glasser v. United States, 315 U.S. 60, 62 S. Ct. 457, 469, 86 L. Ed. 680 (1942); United States v. Kim, 884 F.2d 189 (5th Cir.1989); United States v. Whittington, 783 F.2d 1210, 1216 (5th Cir.1986). This Court recognizes that it is the " 'sole province' " of the trier of fact " 'to weigh the evidence and the credibility of the witnesses.' " United States v. Martin, 790 F.2d 1215, 1219 (5th Cir.1986) (quoting United States v. Davis, 752 F.2d 963, 968 (5th Cir.1985)). We will hold that the evidence is sufficient to sustain the verdict if a rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. United States v. Palella, 846 F.2d 977, 981 (5th Cir.), cert. denied, --- U.S. ----, 109 S. Ct. 162, 102 L. Ed. 2d 133 (1988). When making such a determination, " '[i]t is not necessary that the evidence exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt....' " United States v. Henry, 849 F.2d 1534, 1536 (5th Cir.1988) (quoting United States v. Bell, 678 F.2d 547, 549 (5th Cir.1982) (en banc), aff'd, 462 U.S. 356, 103 S. Ct. 2398, 76 L. Ed. 2d 638 (1983)).
21
We observe more generally that what the fact finder "is permitted to infer from the evidence in a particular case is governed by a rule of reason," and that fact finders may properly " 'use their common sense' " and " 'evaluate the facts in light of their common knowledge of the natural tendencies and inclinations of human beings.' " Henry, 849 F.2d at 1537. Further, as the Supreme Court long ago remarked, "[c]ircumstances altogether inconclusive, if separately considered, may, by their number and joint operation, especially when corroborated by moral coincidences, be sufficient to constitute conclusive proof." Coggeshall v. United States (The Slavers), 69 U.S. (2 Wall.) 383, 17 L. Ed. 911, 914-15 (1865).
22
To establish guilt of conspiracy to possess marihuana with intent to distribute under 21 U.S.C. Secs. 841(a)(1) and 846, the United States must prove beyond a reasonable doubt the existence of an agreement that entails a violation of the narcotics laws, the defendants' knowledge of the agreement, and their voluntary participation in it. The prosecution, however, does not need to present evidence showing an overt act by the defendants in furtherance of such a conspiracy. United States v. Hernandez-Palacios, 838 F.2d 1346, 1348 (5th Cir.1988); United States v. Gardea Carrasco, 830 F.2d 41, 44 (5th Cir.1987). In determining the existence of a conspiracy agreement, the trier of fact may rely on circumstantial evidence, including presence and association, along with other evidence. See United States v. Graham, 858 F.2d 986, 991-92 (5th Cir.1988), cert. denied, --- U.S. ----, 109 S. Ct. 1140, 103 L. Ed. 2d 201 (1989); United States v. Ascarrunz, 838 F.2d 759, 763 (5th Cir.1988). The elements of the conspiracy charge "may be inferred from the 'development and collocation of circumstances.' " United States v. Lentz, 823 F.2d 867, 868 (5th Cir.1987) (quoting United States v. Vergara, 87 F.2d 57, 61 (5th Cir.1982)). Although to be guilty a defendant must voluntarily participate in the conspiracy, he need only play a minor role in the overall scheme. United States v. Gonzales, 866 F.2d 781, 788 (5th Cir.1989).
23
In order to prove that the accused were guilty of the underlying offense, 21 U.S.C. Sec. 841(a)(1), the United States must establish beyond a reasonable doubt that they (1) knowingly (2) possessed marihuana (3) with intent to distribute it. See United States v. Richardson, 848 F.2d 509, 511 (5th Cir.1988); United States v. Williams-Hendricks, 805 F.2d 496, 500 (5th Cir.1986). Possession of the illicit narcotic may be actual or constructive, constructive possession being "the knowing exercise of, or the knowing power or right to exercise, dominion and control over the proscribed substance." Gardea Carrasco, 830 F.2d at 45 (quoting United States v. Glasgow, 658 F.2d 1036, 1043 (5th Cir.1981)). In addition, possession and intent to distribute may be established by circumstantial evidence, and intent may be inferred as well from possession of a large amount of the illicit substance. United States v. Prieto-Tejas, 779 F.2d 1098, 1101 (5th Cir.1986).
24
Ayala argues that the United States failed to prove any element of the conspiracy charge and that it did not establish that he had possession of the marihuana. To the contrary, the evidence against Ayala appears to have been more than sufficient to support his conviction. That evidence included testimony linking Ayala to a self-storage facility unit that he controlled, to which narcotics dogs alerted and in front of which government agents discovered marihuana residue. In addition, the evidence indicated that the white bags Ayala was seen carrying into the unit were similar to those containing traces of marihuana that agents discovered in a nearby garbage bin. The unit contained a scale. Further testimony disclosed that the blue suitcase Ayala stored at the unit on March 15 appeared identical to one holding marihuana that agents seized at the train station on April 12.
25
The evidence also revealed that early on April 12, agents observed Ayala accompany Reza to the train station and wait while Reza stood in the ticket line. Later in the day, they watched Ayala, Portillo, and Reza arrive at the station together in the black Bronco and unload luggage from its rear. When considered with the prior evidence, as well as evidence that Ayala was arrested carrying a train ticket bearing the same name as those tickets held by Reza and Portillo and that he exhibited nervous behavior during questioning and lied to Fonseca about his association with his co-defendants, it is clear that sufficient evidence existed establishing Ayala's guilty knowledge of and participation in the charged conspiracy. See Richardson, 848 F.2d at 509 (nervousness at checkpoint); United States v. Romero-Reyna, 867 F.2d 834, 836 (5th Cir.1989) (lying evidence of guilty knowledge).
26
Although Ayala was not physically carrying the marihuana-laden suitcases when stopped by Fonseca, the trier of fact could have reasonably determined that he had constructive possession of the proscribed substance inside them. Ayala's link to the conspiracy as well as the evidence that one of the suitcases seized by agents had previously been in his possession allow the inference that Ayala had the knowing right to exercise dominion over the marihuana.8 Gardea Carrasco, 830 F.2d at 45. The evidence is also sufficient to show Ayala's guilt of the substantive offense on an aiding and abetting basis or under the rationale of Pinkerton v. United States, 328 U.S. 640, 66 S. Ct. 1180, 1184, 90 L. Ed. 1489 (1946).
27
Reza and Portillo also contend on appeal that the prosecution failed to prove any element of the conspiracy charges against them. They further maintain that although they were in possession of the marihuana when arrested, the prosecution failed to present evidence establishing that they were in knowing possession of the substance. With respect to Reza, once again, ample evidence exists to support his convictions on both counts. Even though Reza never appeared at the facility where the marihuana was stored, other sufficient evidence indicated his participation in the conspiracy and his knowledge of what he was carrying. Agents observed him arrive at Ayala's home on April 12, pick up Ayala and two apparently empty suitcases, and drive with Ayala to the train station. There, Reza purchased the three tickets to Phoenix bearing identical names, two of which Reza and Ayala were holding when arrested later in the day at the station. When Fonseca stopped Reza, whose two suitcases were later found to contain marihuana, he acted nervously and lied to Fonseca about his association with Ayala. See Richardson, 848 F.2d at 513 (nervousness); Romero-Reyna, 867 F.2d at 836 (providing false information). Given the foregoing as well as the fact that Reza, himself, was planning to travel on the train that day with the suitcases, rather than simply helping apparently innocent others with their luggage at the station, the trier of fact could have reasonably inferred that Reza had knowing possession of the marihuana he was carrying and that he voluntarily participated in the conspiracy.
28
Portillo entered the scenario later than Ayala and Reza and, as a result, the evidence against him is not as strong, although it is sufficient to sustain his convictions. Agents observed him arrive at the station on April 12 in the vehicle with Ayala, Reza, and Hernandez and take two suitcases, which later were discovered to contain marihuana, into the terminal. All three appellants had passage booked to Phoenix, yet Portillo entered the terminal separately from Ayala and Reza and appeared to be traveling apart from them. During questioning, Portillo seemed nervous and was reluctant to answer the officers' questions, relying on Hernandez to deal with them. Finally, like Reza, Portillo himself intended to travel on the train that afternoon with the suitcases and was not merely helping apparently innocent others with their luggage at the station. A collocation of the circumstances would allow a trier of fact to conclude beyond a reasonable doubt that Portillo knew what he was carrying and that he voluntarily participated in a conspiracy with Ayala and Reza to possess marihuana with the intent to distribute it.
Conclusion
29
In conclusion, we find that the evidence was sufficient for the district court to convict Ayala, Portillo, and Reza on both counts.
30
AFFIRMED.
1
Appellants' sole other point on appeal is their challenge to the constitutionality of the federal sentencing guidelines followed by the district court in determining their sentences. Because the Supreme Court has since upheld the constitutionality of the guidelines, this challenge is rejected without further discussion. See United States v. Mistretta, --- U.S. ----, 109 S. Ct. 647, 102 L. Ed. 2d 714 (1989); United States v. White, 869 F.2d 822 (5th Cir.), cert. denied, --- U.S. ----, 109 S. Ct. 3172, 104 L. Ed. 2d 1033 (1989)
2
Searls testified, however, that he smelled marihuana at unit D-13 and also that he had found marihuana residue in front of it on subsequent occasions
3
The inspection did, however, include an examination of the interior of the trunk of Ayala's car
4
The Bronco was registered in the name of Reza's mother
5
One of the men was later identified as appellant Reza
6
Searls testified that he thought the suitcases were empty because of the way Ayala was able to "swing[ ] them in[to] ..." the rear of the Bronco
7
Apart from their attack on the constitutionality of the sentencing guidelines, see note 1, supra
8
With regard to all three appellants, the intent to distribute the marihuana can be inferred from the quantity of marihuana found in the suitcases, one hundred pounds. Prieto-Tejas, 779 F.2d at 1101 | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/234160/ | 213 F.2d 296
WEIL CLOTHING CO., Inc.v.GLASSER et al.
No. 14763.
United States Court of AppealsFifth Circuit.
May 20, 1954.
1
Jos. D. Farish, Jr., Farish & Farish, West Palm Beach, Fla., for appellant.
2
John A. Paul, Warwick, Paul & Warwick, John A. Paul, West Palm Beach, Fla., for appellees.
3
Before STRUM and RIVES, Circuit Judges, and DAWKINS, District Judge.
4
DAWKINS, District Judge.
5
Appellant brought this suit for the sum of $15,000, claiming that on or about July 25, 1952, it purchased from defendants, appellees, an entire stock of men's ready-to-wear clothing, consisting of more than 8,648 units and accessories; that defendants represented said merchandise had cost $38,747.24, as shown by the inventory supplied as the basis for negotiation, but indicated willingness to discount cost forty percent on the basis of which appellant bought the entire stock for an agreed price of $23,000; that the goods were shipped to appellant's store in St. Louis and when checked on arrival, there were only 6,038 units which had cost $28,554.11, or a difference of $10,193.13, but on the basis of the negotiated sale, a shortage of $7,338.78; that the shortage was well known to defendants, but that they knowingly and fraudulently misrepresented the quantity and value as shown on the said inventory, upon which complainant relied to its loss of $7,338.78. Plaintiff accordingly demanded trial by jury and judgment in the sum stated, $15,000. The court, on objection of defendants, excluded all evidence of loss of profits, and at the conclusion of plaintiff's case, directed a verdict for defendant. Plaintiff appealed and assigns the following errors:
6
(1) Exclusion of all evidence of loss of profits;
7
(2) Denial of a trial amendment to conform to the evidence as to profits;
8
(3) The granting of a directed verdict;
9
(4) In holding that plaintiff, in spite of the alleged fraudulent misrepresentations, was bound to make its own independent investigation as to what was in stock, and, having failed to do so, was barred from recovery 'by the doctrine of caveat emptor'; and finally,
10
(5) In denying plaintiff's motion for a new trial.
11
Appellant correctly concedes specifications of error 1 and 2 'deal with one aspect of the prior proceedings', while numbers 3, 4 and 5 'all deal with the same question * * * '.
12
Early in the trial, with Julian B. Cohn, president of plaintiff, on the stand as a witness for plaintiff, after testifying to an alleged shortage of approximately $10,000 in the quantity and value of the merchandise, the following took place:
13
'Q. If you had received that merchandise in your St. Louis store at the time and place under the conditions where it would be salable during those summer months, could you give us an approximation of how much net profit you could have made, if you had received them?
14
'Mr. Paul: We object to that question. I don't think there is any element of loss of profits involved in this case.
15
'The Court: Claimed in the complaint'
16
'Mr. Paul: I don't recall any element of loss of profits.
17
'The Court: Let's hear from you on that. First, is it claimed?'Mr. Farish: Your Honor, we contend that as a result of this shortage, in addition to the actual dollars and cents of number of units short, we suffered damages in the amount of fifteen thousand dollars, which is an attributable element of damages where you have had a shortage in a sale of this kind, so I believe it is well within the elements of our damage clause there.
18
'Mr. Paul: I would like to be heard on that, if the Court please.
19
'The Court: All right. I will hear you, Mr. Paul.
20
'Mr. Paul: Do you want to argue this in the absence of the jury? Here is Paragraph 4--
21
'The Court: Well, let's let the jury retire. (The jury then retired from the jury box.)
22
'Mr. Paul: I call Your Honor's attention to Paragraph 4 of the complaint. (Argument to the Court.)
23
'The Court: I can't agree with you Mr. Farish. I think it ought to have been specifically pleaded. I have serious doubts whether that could be recovered.
24
'Mr. Farish: We would like to amend our pleadings to cover that.
25
'The Court: No. I think the case should have been prepared on that basis. I deny your request to amend. Let the jury come in. (The jury then returned to the jury box.)
26
'The Court: The objection that was made to the last question, Gentlemen of the jury, was sustained. All right.'
27
The court then directed a verdict for defendant.
28
Appellant complains, first, that the court erred in excluding evidence as to the loss of profits, on the pleadings as they stood, and, secondly, in refusing the trial amendment to conform to the proof. It cites and relies upon a long list of authorities in support of both the right to prove profits and the right to amend, but it is not necessary to review them all.
29
The plaintiff's evidence, standing alone, tends to support the shortage and values alleged as well as price agreed on. The demand was for a judgment of $15,000, a little more than twice the alleged shortage on the basis of the price actually paid. It is true there was no specific allegation as to how the damage was to be determined, but we think it may reasonably be assumed that appellant bought the merchandise for resale at a profit. Its demand was that it be made whole for the loss caused by the alleged wilful fraud of defendants. Of course, if based on the loss of profits, it was necessary to prove the amount thereof over and above cost and expenses of transportation and sale in St. Louis from its own store. In view of the sum demanded, this would have entailed a net profit of more than one hundred percent. However, this was a question for the jury after hearing all the evidence.
30
Defendants' 'First Defense' was that the complaint failed to 'state a claim upon which relief can be granted'; otherwise, the answer was a general denial coupled with the averment that this was a bulk sale under the Florida law with full opportunity for inspection and evaluation according to defendants' own judgment, and although plaintiff loaded the entire stock so purchased into vans under the eye of its president, no check was made as might have been done had plaintiff seen fit under the circumstances to act on its own judgment and not on representation of defendants. It admitted payment of the purchase price of $23,000, but prayed that the 'suit' be amended to show the true corporate nature of defendant, to wit, The Youth Shop, Inc., and as thus amended it be dismissed as to the individual defendants. Finally, that plaintiff 'take nothing by its suit'.
31
At the time of filing their answer defendants also moved to dismiss the complaint and for a Bill of Particulars, each of which was denied. Although the motion for particulars dealt with other matters, including demands for details as to how and by whom the alleged fraud was committed, the discrepancies in the number of units, and by whom discovered, nowhere did it ask for any information as to how the damages were to be computed. Yet it was perfectly apparent that plaintiff was claiming something more than twice the value of the alleged shortage in the inventory furnished by defendants. The logical conclusion, it would seem, is that plaintiff was claiming either the difference between what it had paid for the deficiency, according to its net value in the price paid, as damages, or the loss of profits. Under each theory, the nature of the proof would have been the same.
32
In view of the short pleading provisions of the Rules of Civil Procedure, Rule 8(a), 28 U.S.C.A., plaintiff needed only to make '(2) a short and plain statement of the claim showing that the pleader is entitled to relief' and '(3) a demand for judgment for the relief to which he deems himself entitled.' In this instance, the complaint set forth the alleged fraud and misrepresentation knowingly made as to the quantity and cost price of the goods purchased, and the loss through failure to deliver what was contracted for. If defendants were uncertain as to how the damage occurred, their remedy was a motion ' * * * for a more definite statement (on the particular point) before interposing (their) responsive pleading.' Rule 12(e). This was not done in motion as filed, thus leaving a situation in which plaintiff was demanding the additional sum stated and, by refusing to dismiss the complaint for failure to state a cause of action, the lower court had necessarily held that plaintiff was entitled to some form of relief thereunder. When this was followed by an attempt to prove the loss of profits, both the court and defendants were apprised of the theory or basis of the demand.
Rule 15(b) reads in part as follows:
33
'If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense under the merits.' (Emphasis by the writer.)
34
Interpretations of this rule are found in Watson v. Cannon Shoe Company, 5 Cir., 165 F.2d 311; Matarese v. Moore-McCormack Lines, 2 Cir., 158 F.2d 631, 170 A.L.R. 440; Fidelity & Deposit Co. of Maryland v. Krout, 2 Cir., 157 F.2d 912; Maryland Casualty Co. v. Rickenbaker, 4 Cir., 146 F.2d 751; Pearl Assurance Co. v. First Liberty National Bank, 5 Cir., 140 F.2d 200.
35
While it is true that the quoted language does not compel the court to allow such amendments, there is a very plain admonition that he 'shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that admissions of such evidence would prejudice him in maintaining his action or defense upon the merits.' There was no showing of such prejudice, in fact in sustaining the objection to the proposed evidence, the refusal to allow the amendment and the giving of the directed verdict were all apparently based upon the maxim caveat emptor and as stated before, these rulings were in conflict with the earlier overruling of the motion to dismiss for failure to state a claim for relief. The evidence to establish the fraud presented by the plaintiff in chief was such that a fair-minded jury might reach the conclusion that fraud was knowingly committed. We conclude therefore that the court below, in the light of its own rulings, was in error both in sustaining the objection to the testimony and in refusing to permit the amendment, or at least abused its discretion, unless it was right in applying the maxim of caveat emptor. These are two lines of authority as to the right to recover for anticipated profits lost through the fraudulent breach of a contract of sale, such as that involved here, the majority holding that a recovery may be had where, as here, the only object in purchasing the goods was for resale at a profit to the knowledge of the seller.
36
'As a general rule one injured by the commission of a fraud is entitled to recover such damages as will compensate him for the loss or injury actually sustained, and will place him in the same position that he would have occupied had he not been defrauded.' 12 R.C.L. 451, Sec. 196.
37
The very nature of the transaction in this instance was such that defendants were bound to know plaintiff was buying the goods for resale in its St. Louis store for a profit, and it was obvious the undertaking would be fruitless, at least in part, if a substantial part of the stock represented was not there. Otherwise, it may be assumed plaintiff would not have made the contract. Selman v. Shirley, 1938, 161 Or. 582, 85 P.2d 384, adhered to on rehearing, 91 P.2d 312, 124 A.L.R. 1; Thomas v. American Workmen, 1941, 197 S.C. 178, 145 S.E.2d 886, 136 A.L.R. 1; McCay v. Jenkins, 1943, 244 Ala. 650, 15 So. 2d 409, 149 A.L.R. 746.
38
Caveat Emptor.
39
This maxim applies whenever the purchaser in the particular circumstances has full opportunity to inspect what he is buying but fails to do so, and relies upon mere statements of the seller, which amount to no more than 'puffing', 'boosting' or the expression of opinion. But, where fraud is knowingly and willfully committed, under circumstances where there is no reasonable opportunity to discover it, the cases quite uniformly hold that a purchaser in good faith, acting and relying upon such representations is not barred from recovery. Williston on Contracts, Sec. 1516; Suraci v. Ball, 1947, 160 Pa.Super. 349, 51 A.2d 404; 23 Am.Jur., Sec. 164, p. 975; Strand v. Griffith, 8 Cir., 1899, 97 F. 854, 38 C.C.A. 444; Securities and Exchange Comm. v. Timetrust, Inc., D.C., 28 F. Supp. 34; Mason v. Thornton, 74 Ark. 46, 84 S.W. 1048; see also, Federal Trade Comm. v. Standard Education Society, 302 U.S. 112, 58 S. Ct. 113, 82 L. Ed. 141.
40
The judgment below is reversed and the case is remanded for further proceedings consistent with the views herein expressed. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/660689/ | 14 F.3d 276
In re AMERICAN MARINE HOLDING COMPANY, et al., Petitioners.
No. 94-30025.
United States Court of Appeals,Fifth Circuit.
Feb. 8, 1994.
John G. Odom, Stuart Des Roches, New Orleans, LA, for appellant.
M. Greg Rains, McMurray & Livingston, Paducah, KY, Janet W. Marshall, John A. Bolles, New Orleans, LA, Richard P. Ieyoub, Atty. Gen., Baton Rouge, LA, for appellee.
Petition for Writ of Mandamus to the United States District Court for the Eastern District of Louisiana.
Before GARWOOD, SMITH and DeMOSS, Circuit Judges.
PER CURIAM:
OPINION
1
In this proceeding, Petitioners1 seek a Writ of Mandamus directing the district court (1) to conduct a jury trial pursuant to Sec. 4 of the Federal Arbitration Act, 9 U.S.C. Sec. 1, et seq., and (2) to grant Petitioners leave of court to file their Second Amended Answer in Civil Action No. 91-3645, pursuant to Rule 15(a) of the Fed.R.Civ.P. In a prior appeal and application for Writ of Mandamus to this Court, West of England Ship Owners Mutual v. American Marine, 981 F.2d 749 (5th Cir.1993), the following matters were decided as the law of this case:
2
(a) Upon the consolidation of two separate proceedings2, the issue of arbitrability became "embedded" in the consolidated proceeding; and
3
(b) The orders compelling arbitration in such consolidated case were interlocutory in nature, and appeal of those orders is barred by 9 U.S.C. Sec. 16(b).
4
Petitioners now urge us to review certain other orders not involved in the prior appeal under an application for writ of mandamus. Since the district court did not certify either of these prior actions for interlocutory appeal under 28 U.S.C. Sec. 1292(b), no interlocutory appeal is available under that statutory provision; and the only alternative route which applicants might use is the writ of mandamus. However, as we have said on many occasions, the writ of mandamus is an extraordinary remedy reserved for extraordinary situations. Gulf Stream Aerospace Corp. v. Mayacamus Corp., 485 U.S. 271, 108 S. Ct. 1133, 99 L. Ed. 2d 296 (1988). Traditionally, federal courts have exercised their mandamus power only "to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so". Id. at 289, 108 S.Ct. at 1143. The party seeking mandamus has the burden of demonstrating a "clear and indisputable right to it". See Gulf Stream, 485 U.S. at 289, 108 S. Ct. at 1143. Moreover, it is more than well-settled that a writ of mandamus is not to be used as a substitute for appeal. See In re Cajun Electric Power Coop, Inc., 791 F.2d 353, 365-66 (5th Cir.1986). Petitioners have failed to carry their burden to establish their entitlement to a writ of mandamus.
5
Whether the district court erred in refusing to give Petitioners a jury trial on the issue of arbitrability or in refusing to allow Petitioners to file a Second Amended Answer in one of the consolidated proceedings (and we do not pass in any way on the merits on those issues) may be raised for appellate review after the arbitration is completed and a final judgment entered by the district court confirming such arbitration. In our view, that is the clear plan and sequence of events which Congress contemplated in adding Sec. 16 to the Federal Arbitration Act.
6
Petition for writ of mandamus is DENIED.
1
The Petitioners are American Marine Holding Company, Aggregate Barges, Inc., Cajun Crane Company, Bayou Fleet, Inc., Frere Company, Modern Barge Company, Grand Marine, Seneca Barge Company, Inc., Audubon Barges, Inc., Durow Corporation, Dumur Corporation, Oiseau Brothers, NOE Barge Company and Leslie B. Durant
2
Civil Action No. 91-3645 in the United States District Court for the Eastern District of Louisiana, in which the West of England Ship Owners Mutual Insurance Association (Luxembourg) sought an order compelling arbitration pursuant to the convention on the recognition and enforcement of foreign arbitral awards (9 U.S.C. Sec. 201; et seq.); and Civil Action No. 91-3798 in the United States District Court for the Eastern District of Louisiana, a suit initially filed by Petitioners in the Civil District Court for the Parish of Orleans, State of Louisiana, No. 91-17709, and removed to the Federal Court by Notice of Removal filed by the West of England Ship Owners Mutual Insurance Association (Luxembourg) | 01-03-2023 | 04-16-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1537149/ | 27 B.R. 452 (1983)
In re Peter Frank SHAVER, Debtor.
Nancy H. SHAVER, Plaintiff,
v.
Peter F. SHAVER, Defendant.
Bankruptcy No. 82-157, Adv. No. 82-157.
United States Bankruptcy Court, D. Nevada.
February 8, 1983.
*453 David E. Wickland, Munster, Ind., for plaintiff.
Alan R. Smith, Reno, Nev., for defendant.
OPINION
SAMUEL J. STEINER, Bankruptcy Judge.
FACTS
Plaintiff ("wife") commenced this action seeking a determination of the dischargeability of a $197,300 debt owed to her by the debtor-defendant (her ex-husband).
On June 27, 1979, the Indiana Superior Court after a lengthy trial entered a decree dissolving the marriage. The decree provided, inter alia, for custody of the parties' four children, that the debtor was to pay the plaintiff child support of $1,500 per month, and that "in final settlement of the property rights of the parties and division of marital assets, [the wife] shall receive from [the husband] the sum of . . . $150,000, payable over a [seventy-five month] period [at the rate of $2,000 per month]." The decree was amended on December 31, 1979, to provide that "as and for [the wife's] discharge of her marital and dower rights arising from the marriage, [she] shall be paid the sum of $197,300 in periodic payments. . . ." The payments were to stretch out over a period in excess of ten years, but would cease if the wife were to die prior to full payment.
Unlike the initial decree, the amended decree arose out of the parties' negotiations and stipulation. Mr. Benne, the wife's attorney in the divorce case, testified that the parties intended the periodic payments to constitute alimony which, if properly structured, would be deductible by the husband (and, conversely, would be income to the wife). Mr. Benne explained the difference between the judge's original $150,000 figure and the parties' agreed $197,300 figure as representing the amount of taxes the wife would have to pay on the alimony received. In addition, Mr. Benne testified that the monthly payments were reduced from $2,000 per month to $1,500 per month to establish an amount the debtor "could live with." The debtor testified that alimony was never discussed with him and that he never would have agreed to pay alimony.
Subsequent to the divorce, the debtor filed his bankruptcy. The plaintiff asserts that the debt is in the nature of alimony and is not dischargeable in bankruptcy. On the other hand, the debtor contends that the debt established by the agreed judgment was a property settlement and is dischargeable in bankruptcy.
ISSUE
What is the true nature of the $197,300 obligation: alimony or property division?
DISCUSSION
Section 523(a)(5) of the Code provides that "a discharge under section 727 . . . does not discharge an individual debtor from any debt . . . to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a . . . divorce decree, or property settlement agreement 11 U.S.C. § 523(a)(5). The legislative history indicates that federal bankruptcy law, not state law, controls. Thus, the bankruptcy court has a duty to look beyond labels used by state courts. In re Vickers, 24 B.R. 112 (Bkrtcy.D.Tenn.1982).
In the instant case, Indiana law with certain exceptions forbids the court from awarding maintenance or alimony. Indiana Code § 31-1-11.5-9(c). Despite the prohibition, Indiana law does not prohibit spouses from agreeing to alimony. Indiana Code § 31-1-11.5-10(a). See Hicks v. Fielman, Ind.App., 421 N.E.2d 716, 720 (1981). Although Indiana law is not dispositive, it is significant and a starting point.
Bankruptcy Courts have enunciated a number of factors pertinent to whether a judgment is alimony or property division. Judge Goldwater's opinion in In re Stachowiak, 16 B.R. 392 (Bkrtcy.D.Nev.1982), cited by the debtor, identified the following factors: whether the debt involved a "stream of payment" terminating on the *454 death or remarriage of the recipient (or on the death of the payor spouse) and/or whether the arrangement "appears related or intended for the economic safety and future of the wife." Id. at 393. The Seventh Circuit, in In re Maitlen, 658 F.2d 466 (7th Cir.1981), interpreted a document entitled "Property Settlement Agreement" (incorporated into a dissolution decree) and concluded that a provision requiring the husband to make the mortgage payments on the house awarded to the wife created a nondischargeable obligation. The court identified many factors: the location of the provision in the agreement or decree; whether children were involved; whether the obligation was designed to balance the parties' disparate income (the court found such intent by a recital in the agreement that each party was aware of the financial and personal status of the other); whether the award involved the payment of money; whether the award provided for payment directly to the spouse; whether the award involved payment of future, as opposed to past, debts; and whether the provision dealt with termination of the payment (the court noted that termination upon the recipient's death or remarriage indicates support rather than property division). In Maitlen, the debtor contended (as in the case at bar) that the award could not be in the nature of alimony because Indiana law prohibited such an award absent a finding of incapacity. Id. at 470. The court rejected this argument, holding that the parties could and did agree to a maintenance award. Id. at 471. (Presumably the court would come to the same conclusion under the Code for a different reasonthe legislative history says state law does not control). The court did not deem it dispositive that the parties failed to label the provision "maintenance" or "alimony" or that the husband did not consider the debt to be support for the wife. See also In re Woods, 561 F.2d 27 (7th Cir.1977) (husband's assumption of prior debts and hold harmless agreement dischargeable where debts owed to creditors, not wife, provision situated between other property division provisions, no real disparate income between parties, no children involved, and no provision for payment, i.e., in gross or periodic, made).
The Ninth Circuit, in Matter of Albin, 591 F.2d 94 (9th Cir.1979), held that an agreement requiring the husband to make "alimony and support" payments to his wife and children created a nondischargeable debt despite the bankruptcy court's determination that the debt constituted a dischargeable property settlement. The court identified five factors: "(1) whether the obligation terminates on the death or remarriage of the recipient spouse, (2) whether the obligation terminates on the death of the donor spouse, (3) if the payments are payable in installments over a substantial period of time . . . (4) whether the obligation is enforceable by contempt, . . . and (5) whether the payments were intended for the economic safety of the wife." Id. at 97 (citations omitted). (The court looked to state lawVirginiaand relied on In re Waller, 494 F.2d 447 (6th Cir.1974), a case specifically overruled in the legislative history to § 523(a)(5).) The court held the debt nondischargeable "notwithstanding the fact that [the husband's] obligations were not subject to modification and would not terminate on the remarriage of the [wife]." Id. at 97.
A recent "Code" case has enunciated eleven factors relevant to whether an obligation is alimony, support, or maintenance:
1. Whether the obligations of payment terminate upon the death of either spouse or upon the marriage of the spouse benefitted by the payments;
2. Whether the obligation terminates when the dependent children reach majority or are otherwise emancipated;
3. Whether the payments are made directly to the spouse;
4. The relative earnings of the parties;
5. Evidence that the spouse relinquished rights and support in return for the payment of the obligations;
6. The length of the parties' marriage and the number of dependent children;
7. The document itself and any inferences which could be drawn and the placement *455 of specific provisions in the document;
8. Whether the debt was incurred for the immediate living expense of the spouse;
9. Whether the payments were intended for the economic safety of the dependent;
10. Whether the obligation is enforceable by contempt;
11. Whether payments are payable in installments over a substantial period of time.
In re Vickers, 24 B.R. 112, 114-115 (Bkrtcy. M.D.Tenn.1982). Although some of the considerations outlined above speak solely to the child support issue, many of the factors delineated in Vickers, Maitlin, and Albers provide a guideline to whether the obligation in the instance case constitutes maintenance/alimony or property division.
Applying the criteria discussed in the cited authorities compels the court to conclude in this case that the $197,300 judgment was alimony. To begin with, the label of the provision "discharge of marital and dower rights" is not controlling. Substance must prevail over form. Further, the obligation is a money judgment payable in cash installments to the wife over a substantial period of time. Third, the debt terminates on the wife's death. It is difficult to imagine a true property division terminating on the death of one of the spouses. In addition, the evidence establishes that the result of the agreed order was to enable the debtor to deduct the periodic payments. Even if one assumes that the debt was restructured primarily for the debtor's tax advantage, it is difficult to understand how he can use it as alimony for tax purposes when he gets a divorce, but can call it property division for dischargeability purposes.
CONCLUSION
The $197,300 judgment represents alimony and is nondischargeable in bankruptcy.
Pursuant to Bankruptcy Rule 752(a), this opinion shall serve as the Court's Findings of Fact and Conclusions of Law. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537215/ | 979 A.2d 1048 (2009)
117 Conn.App. 569
Christine CIMINO
v.
ZONING BOARD OF APPEALS OF the TOWN OF WOODBRIDGE.
No. 29251.
Appellate Court of Connecticut.
Argued February 19, 2009.
Decided October 13, 2009.
*1049 Timothy J. Lee, with whom, on the brief, was Leonard A. Fasano, New Haven, for the appellant (plaintiff).
Jennifer N. Coppola, North Haven, for the appellee (defendant).
GRUENDEL, ROBINSON and LAVERY, Js.
LAVERY, J.
The plaintiff, Christine Cimino, appeals from the judgment of the trial court denying her appeal from the decision by the defendant, the zoning board of appeals of the town of Woodbridge (board), which denied her request for variances. On appeal, the plaintiff claims that the court improperly found that (1) the parcel at issue was not a preexisting, nonconforming use, (2) the variances were denied properly because there was no hardship, (3) the property is not worthless without the variances and (4) the variances were not consistent with the town's master plan of development. We affirm the judgment of the trial court.
*1050 The plaintiff owns an undeveloped piece of land at 21 Ansonia Road in Woodbridge. The parcel consists of 5.06 acres in a residence A zoning district. The town's zoning regulations (regulations) specify that in a residence A zoning district there may be development of a single-family residence on lots with a minimum of 65,000 square feet. The subject property contains approximately three acres of wetlands.
In July, 2005, the board conducted a hearing on the plaintiff's application for a variance from the requirement in footnote 6 of § 3.13[1] of the regulations that "[a]ll new lots proposed in a [r]esidence a [d]istrict created after the effective date of this amendment, whether or not in a subdivision shall be of such shape that a square with 150 feet on each side will fit on the lot within the set back boundaries." The application also sought a variance to allow 1.02 acres of a contiguous nonwetland area other than the two acres of contiguous nonwetland required by the zoning ordinance. There was evidence in the record, which the court found was not contested, that the pertinent history of the property is as follows:
"The property was part of a larger tract of land for which subdivision approval was sought in 1977. In April, 1977, the then owner ... of the property and that tract submitted a proposal for approval of seven lots, with the subject property depicted as two lots. That proposal was withdrawn by the applicant....
"The owner then filed another application for subdivision of the larger tract of land, with a map dated September 19, 1977, showing part of the property designated as Lot 5 and the remainder as `Open Space To Be Dedicated to the Town of Woodbridge'. The owner withdrew the second application on October 3, 1977; shortly before that withdrawal, the inland wetland agency, which had reviewed the September 19, 1977 map, determined that the applicant's proposals for the property `continued to create a potential for significant impact' on an adjacent watercourse and declined to modify denial of an inland wetland permit....
"Subsequently, the owner of the larger tract submitted an application for approval of four lots, with the subject property no longer designated as Lot 5, but rather shown as `Remaining Land of Aaron Cohen, Trustee....' The minutes of the November 7, 1977 meeting of the town plan and zoning commission reflect that the owner's engineer stated at the hearing on the application that the owner would file a separate application for approval of the property shown on the previous map as Lot 5 and represented that the board of selectmen had voted to accept the area shown on the earlier map as `Open Space' at its meeting [on] October 12, 1977. The engineer represented that the owner would file a second application for the tract consisting of the property and land designated as [o]pen [s]pace after obtaining a decision from the inland wetlands agency. At that meeting on November 7, 1977, the town plan and zoning commission voted to approve the application for four lots. The subject property was not one of the approved lots....
"On November 19, 1977, the owner's agent filed an application for approval of `Section Two', which included the subject property and which reflected that a report from the inland wetlands agency was pending. The application was scheduled to be heard on December 5, 1977. A legal *1051 notice regarding the hearing bears a hand-written notation that the then owner's engineer withdrew that application on November 22, 1977. At its meeting on December 13, 1977, the inland wetlands agency voted unanimously to deny a permit for the property....
"On December 21, 1979, the inland wetlands agency voted to deny another application by the owner's agent for a permit for the property, which had been designated on the previous map as Lot 5." (Internal quotation marks omitted.)
No further applications have been made on the property known as the "Remaining Land of Aaron Cohen, Trustee," since December 21, 1979, until the application that is at issue in this appeal was filed on June 27, 2005. The description of the property in the warranty deed when it was purchased by the plaintiff and her husband and the description when the plaintiff's husband conveyed it to her in a quitclaim deed was "Remaining Land of Aaron Cohen, Trustee...." It was not shown as lot 5 because there was no lot 5 that had been approved by the town's planning and zoning commission. The approved site plan map shows four approved lots on Ansonia Road and a parcel identified as the "Remaining Land of Aaron Cohen, Trustee," bordering on Johnson Road and Ansonia Road.
The plaintiff and her husband bought the property by warranty deed from Alphonso Del Santo and Carol Del Santo, who were the owners of lot 4, on May 27, 1983. The plaintiff's husband conveyed the property to her through a quitclaim deed on May 3, 1996.
In 2001, the planning and zoning commission amended its zoning regulations. The changes included amending footnote 6 of § 3.13, which required a minimum square footage of 150 feet by 150 feet within the setback boundaries. Footnote 7 of § 3.13 was also amended and now requires at least two acres of noncontiguous wetlands.[2] See footnote 1 of this opinion.
The hearing by the board on the plaintiff's application seeking a variance of the square footage regulation and the two acre contiguous nonwetland regulation was held on July 11, 2005. On November 14, 2005, the board, in denying the variances made the following decision by unanimous vote: "[t]he [b]oard acted to deny the variances as requested based on the [b]oard's finding that the hearing record does not establish that the subject property was a buildable zoning lot when the property was originally subdivided, and no hardship was established through the hearing proceeding that changes that fact. The land was originally purchased as remaining land of an approved four-lot subdivision. Changes to the ... [r]egulations made subsequent to [the] applicant's purchase of the property have not established a hardship. The land is what it was when it was first purchased `remaining land', whose value is the same as when the applicant purchased the property in that state."
The board sent notice to the plaintiff in a letter dated November 28, 2005. The *1052 plaintiff appealed from the decision to the Superior Court on February 23, 2006. After the parties briefed their claims, a hearing on the merits was held on March 19, 2007. The court, in a memorandum of decision, denied the plaintiff's appeal, finding that the parcel was not a preexisting, nonconforming lot and that the plaintiff had not met her burden to show hardship and compliance with the town's comprehensive plan to control and to regulate property use. The plaintiff filed the present appeal after this court granted her petition for certification to appeal.
I
The plaintiff first claims that the court erred in not finding that her property is a preexisting, nonconforming lot. The plaintiff argues that because the property in question met the bulk requirement for a lot in 1977, it should be considered a fifth lot and that the wetland problem should not be taken into consideration because wetlands were not part of the planning and zoning commission's jurisdiction. The board argues that this claim was not fully developed before the board or the court and therefore is not properly before this court for review. We agree with the board but further conclude that even if this issue had been fully raised before the board, it would not have been raised properly without the plaintiff's first having been denied a certificate of zoning compliance from the town zoning enforcement officer.
To discuss properly the first issue that is raised by the plaintiff, we must first state what this appeal is not about. The issue before the board in the variance application and at the public hearing was not a claim of a preexisting, nonconforming lot and the application of General Statutes § 8-6(a).
The power of the board is set forth in § 8-6(a)[3] and General Statutes § 8-7,[4]*1053 and is also set forth in § 10.11 of the regulations, which state in part: "10.11 The Zoning Board of Appeals shall have the following powers and duties:
"10.111 To hear and decide appeals where it is alleged that there is an error in any order, requirement or decision made by the Enforcement Officer in connection with the enforcement of these Regulations.
"10.112 To hear and decide all matter including special exceptions upon which it is required to pass by the specific terms of these Regulations or any amendments thereof.
"10.113 To determine and vary the application of these Regulations in harmony with their general purposes and intent and with due consideration for conserving the public health, safety, convenience, welfare and property values solely with respect to a parcel of land where, owning to conditions especially affecting such parcel but not affecting generally the district in which it is situated, a literal enforcement of these Regulations would result in exceptional difficulty or unusual hardship so that substantial justice will be done and the public safety and welfare secured."
The definitions of subdivision and resubdivision as presented in General Statutes § 8-18 are instructive: "`[S]ubdivision' means the division of a tract or parcel of land into three or more parts or lots made subsequent to the adoption of subdivision regulations by the commission, for the purpose, whether immediate or future, of sale or building development expressly excluding development for municipal, conservation or agricultural purposes, and includes resubdivision; `resubdivision' means a change in a map of an approved or recorded subdivision or resubdivision if such change (a) affects any street layout shown on such map, (b) affects any area reserved thereon for public use or (c) diminishes the size of any lot shown thereon and creates an additional building lot, if any of the lots shown thereon have been conveyed after the approval or recording of such map...."
"A vacant lot which existed prior to the enactment of the zoning regulations or which becomes nonconforming due to a change in the zoning regulations, is not protected as a nonconforming lot from the existing zoning regulations unless it is a subdivision lot exempted from the change under § 8-26a of the General Statutes or by a provision in the zoning regulations (usually under nonconforming uses) of the municipality protecting such lots from *1054 changes in the regulations." R. Fuller, 9B Connecticut Practice Series: Land Use Law and Practice (3d Ed.2007) § 53:3, p. 240.
The record reveals that the parcel was never approved as a lot. The record is silent, however, as to why this parcel is not part of one of the approved lots, why, if the intention was to create a fifth lot, resubdivision would not be the appropriate methodology and, finally, the effect of the conveyance of the lot to the plaintiff by the owner of lot 4. These considerations were not presented as part of the variance application. The only issue before the board was the application for variances under § 3.13 of the regulations. There is nothing in the record to show that there was an application to the zoning enforcement officer for a certificate of zoning compliance claiming that the parcel at issue was a preexisting, nonconforming lot. Pursuant to the state statutes and local regulations, it would take a denial of such an application and an appeal therefrom to confer jurisdiction on the board to adjudicate this issue. We find that the issue of preexisting, nonconforming use is not properly before this court.
II
What is before this court is an application seeking hardship variances from the 150 by 150 square foot regulation and the two acre, noncontiguous wetland regulation. The plaintiff claims that the court improperly upheld the board's denial of her variances. We conclude that the reasoning of the board was valid to deny the variances. We further conclude that it was clear that the parcel was never approved as a building lot and that the granting of a variance cannot make it an approved lot.
The history of the property shows that the planning and zoning commission approved four lots and left the parcel at issue out as "Remaining Land of Aaron Cohen, Trustee...." A prior application for a five lot subdivision was not approved. The town's inland wetlands agency approved the four lots and disapproved on three occasions the use of this parcel.
"It is elemental that a variance is authority granted to the owner to use his property in a manner forbidden by the zoning regulations." Carlson v. Zoning Board of Appeals, 158 Conn. 86, 90, 255 A.2d 841 (1969). "This is an exceptional power which should be sparingly exercised and can be validly used only where a situation falls fully within the specified conditions." Devaney v. Board of Zoning Appeals, 132 Conn. 537, 540, 45 A.2d 828 (1946); see Reid v. Zoning Board of Appeals, 235 Conn. 850, 857, 670 A.2d 1271 (1996). Our Supreme Court has held that "the authority of a zoning board of appeals to grant a variance under ... [§ 8-6(a)(3)] requires the fulfillment of two conditions: (1) the variance must be shown not to affect substantially the comprehensive zoning plan, and (2) adherence to the strict letter of the zoning ordinance must be shown to cause unusual hardship unnecessary to the carrying out of the general purpose of the zoning plan." (Internal quotation marks omitted.) Grillo v. Zoning Board of Appeals, 206 Conn. 362, 368, 537 A.2d 1030 (1988).
Our Supreme Court has held that, "where the claimed hardship arises from the applicant's voluntary act, a zoning board lacks power to grant a variance." Abel v. Zoning Board of Appeals, 172 Conn. 286, 289, 374 A.2d 227 (1977). This is the basis of the purchase with knowledge rule. See R. Fuller, 9 Connecticut Practice Series: Land Use Law and Practice (3d Ed.2007) § 9:4, p. 256. "[T]he purchase with knowledge rule would bar the buyer of an illegal lot from obtaining a *1055 variance where he purchased the property with knowledge of the problem." (Internal quotation marks omitted.) Vine v. Zoning Board of Appeals, 93 Conn.App. 1, 20, 887 A.2d 442 (2006) (McLachlan, J., dissenting), rev'd on other grounds, 281 Conn. 553, 916 A.2d 5, aff'd after remand, 102 Conn.App. 863, 927 A.2d 958 (2007).
A parcel that was not approved as a buildable lot has never been held to be one of the specified conditions that a variance may be validly used to resolve. Further, it is not the application of the zoning regulations specifically that is creating the problem for the plaintiff but, rather, the fact that her parcel was never considered anything but "Remaining Land of Aaron Cohen, Trustee...." The record is clear through the deeds for the property, and the approved subdivision map filed in the town's land records, that it was "remaining land" and not designated as a lot in the subdivision. The difficulty or hardship that now plagues the plaintiff was created by her and her husband in the initial purchase from the Del Santos. The court properly upheld the decision of the board.
III
The plaintiff further claims that the property is worthless without a variance. The board argues that there was no evidence presented to support this claim. We agree with the board.
There was no evidence presented to the board that the property would be rendered valueless without a variance granted for the plaintiff to build on the property. Then, the plaintiff filed a motion to supplement the record with an appraisal report after she had filed her brief to the trial court. The board filed an objection to the motion. At the hearing on the merits of this case, counsel for the plaintiff orally withdrew his motion. Because we do not have a record for this claim, and the plaintiff withdrew it from the court's consideration, we will not address this claim.
IV
The plaintiff's final claim is that the variances are consistent with the comprehensive plan. Because our analysis of the hardship requirement for a variance in part II of this opinion was dispositive of the plaintiff's claim that her variance application was denied improperly, we decline to address this claim.
The judgment is affirmed.
In this opinion the other judges concurred.
NOTES
[1] Section 3.13 of the regulations contains a nine column table, entitled "Table of General Bulk Regulations." The footnotes to this table referred to herein were inserted in column three, which is entitled "Minimum Lot Size."
[2] The amendment provides: "All new lots proposed in a Residence A District that are: (1) created after the effective date of this amendment, and (2) located fifty percent (50%) or more within a drinking water supply watershed mapped or designated by the South Central Connecticut Regional Water Authority or Birmingham Utilities, Inc., shall contain a minimum of two acres of Buildable Lot Area. Buildable Lot Area is defined as that contiguous portion of a lot exclusive of and undivided by any areas of wetland soils and watercourse as defined in Section 22a-38 of the Connecticut General Statutes. All new lots must comply with this requirement whether or not they are part of a subdivision."
[3] General Statutes § 8-6(a) provides: "The zoning board of appeals shall have the following powers and duties: (1) To hear and decide appeals where it is alleged that there is an error in any order, requirement or decision made by the official charged with the enforcement of this chapter or any bylaw, ordinance or regulation adopted under the provisions of this chapter; (2) to hear and decide all matters including special exceptions and special exemptions under section 8-2g upon which it is required to pass by the specific terms of the zoning bylaw, ordinance or regulation; and (3) to determine and vary the application of the zoning bylaws, ordinances or regulations in harmony with their general purpose and intent and with due consideration for conserving the public health, safety, convenience, welfare and property values solely with respect to a parcel of land where, owing to conditions especially affecting such parcel but not affecting generally the district in which it is situated, a literal enforcement of such bylaws, ordinances or regulations would result in exceptional difficulty or unusual hardship so that substantial justice will be done and the public safety and welfare secured, provided that the zoning regulations may specify the extent to which uses shall not be permitted by variance in districts in which such uses are not otherwise allowed. No such board shall be required to hear any application for the same variance or substantially the same variance for a period of six months after a decision by the board or by a court on an earlier such application."
[4] General Statutes § 8-7 provides in relevant part: "The concurring vote of four members of the zoning board of appeals shall be necessary to reverse any order, requirement or decision of the official charged with the enforcement of the zoning regulations or to decide in favor of the applicant any matter upon which it is required to pass under any bylaw, ordinance, rule or regulation or to vary the application of the zoning bylaw, ordinance, rule or regulation. An appeal may be taken to the zoning board of appeals by any person aggrieved or by any officer, department, board or bureau of any municipality aggrieved and shall be taken within such time as is prescribed by a rule adopted by said board, or, if no such rule is adopted by the board, within thirty days, by filing with the zoning commission or the officer from whom the appeal has been taken and with said board a notice of appeal specifying the grounds thereof.... The board shall hold a public hearing on such appeal in accordance with the provisions of section 8-7d. Such board may reverse or affirm wholly or partly or may modify any order, requirement or decision appealed from and shall make such order, requirement or decision as in its opinion should be made in the premises and shall have all the powers of the officer from whom the appeal has been taken but only in accordance with the provisions of this section. Whenever a zoning board of appeals grants or denies any special exception or variance in the zoning regulations applicable to any property or sustains or reverses wholly or partly any order, requirement or decision appealed from, it shall state upon its records the reason for its decision and the zoning bylaw, ordinance or regulation which is varied in its application or to which an exception is granted and, when a variance is granted, describe specifically the exceptional difficulty or unusual hardship on which its decision is based. Notice of the decision of the board shall be published in a newspaper having a substantial circulation in the municipality and addressed by certified mail to any person who appeals to the board, by its secretary or clerk, under his signature in any written, printed, typewritten or stamped form, within fifteen days after such decision has been rendered...." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537216/ | 979 A.2d 693 (2009)
2009 ME 94
STATE of Maine
v.
Michael LABBE.
Docket: Som-08-645
Supreme Judicial Court of Maine.
Argued: May 20, 2009.
Decided: August 27, 2009.
*694 Evert N. Fowle, Dist. Atty., Alan P. Kelley, Dep. Dist. Atty. (orally), Augusta, ME, for the State of Maine.
Jason M. Jabar, Esq., Arnold S. Clark, Esq. (orally), Jabar, Batten & Ringer, Waterville, ME, for Michael Labbe.
Panel: SAUFLEY, C.J., and CLIFFORD, ALEXANDER, LEVY, SILVER, MEAD, and GORMAN, JJ.
SILVER, J.
[¶ 1] The State of Maine appeals from a judgment, entered in the District Court (Skowhegan, Nivison, J.), dismissing a charge of violation of condition of release (Class E), 15 M.R.S. § 1092(1)(A) (2008), which accounted for one count of a criminal complaint against Michael Labbe. The other count, which formed the basis for the violation of condition of release charge, was for operating while his license was suspended (Class E), 29-A M.R.S. § 2412-A(1-A)(D) (2008). At Labbe's arraignment, he pleaded guilty to the charge of operating while his license was suspended and was sentenced to forty-eight hours in jail and a $500 fine. He pleaded not guilty to the violation of condition of release charge. Labbe filed a motion to dismiss the violation of condition of release charge on the basis of double jeopardy. The court granted Labbe's motion, and the State appeals. We vacate.
[¶ 2] We review the judgment de novo because the appeal involves the interpretation of constitutional and statutory provisions. See McGee v. Sec'y of State, 2006 ME 50, ¶ 5, 896 A.2d 933, 936.
[¶ 3] The Double Jeopardy Clause, set forth in the Fifth Amendment to the United States Constitution, provides that no person shall "be subject for the same offence to be twice put in jeopardy of life or limb." The Double Jeopardy Clause is applicable to the states through the Fourteenth Amendment. State v. Jordan, 1998 ME 174, ¶ 7, 716 A.2d 1004, 1005 (citing Benton v. Maryland, 395 U.S. 784, 794, 89 S.Ct. 2056, 23 L.Ed.2d 707 (1969)). Article I, section 8 of the Maine Constitution states: "No person, for the same offense, shall be twice put in jeopardy of life or limb." These state and federal constitutional protections are coterminous. Id. ¶ 7, 716 A.2d at 1005-06.
[¶ 4] The Double Jeopardy Clause provides three protections: (1) it "protects against a second prosecution for the same offense after acquittal"; (2) it "protects against a second prosecution for the same *695 offense after conviction"; and (3) it "protects against multiple punishments for the same offense." Ohio v. Johnson, 467 U.S. 493, 497-98, 104 S.Ct. 2536, 81 L.Ed.2d 425 (1984) (quotation marks omitted).
[¶ 5] The State concedes that the charge of operating after suspension and the charge of violation of condition of release are the same offense for purposes of the application of the Double Jeopardy Clause. We analyze this case under the second and third protections, i.e., the protection against a second prosecution for the same offense after conviction, and the protection against multiple punishments for the same offense.
[¶ 6] Two charges that are considered the same offense for purposes of double jeopardy may be prosecuted in the same proceeding, but not in successive, temporally separate proceedings. Johnson, 467 U.S. at 500-01, 104 S.Ct. 2536 (citing Brown v. Ohio, 432 U.S. 161, 97 S.Ct. 2221, 53 L.Ed.2d 187 (1977)); United States v. Henry, 519 F.3d 68, 73 (1st Cir. 2008) (citing United States v. Dixon, 509 U.S. 688, 113 S.Ct. 2849, 125 L.Ed.2d 556 (1993)). In Henry, the First Circuit came to a straightforward and useful conclusion after analyzing the Supreme Court's majority opinion in Dixon along with its multiple concurrences and dissents:
In relevant part, the majority holding of Dixon stands for the narrow proposition that an individual may not be prosecuted for an underlying, substantive offense and criminal contempt in temporally separate proceedings. The divided court left open the possibility that an individual could be punished for both contempt and an underlying offense in a single proceeding without implicating constitutional concerns.
Henry, 519 F.3d at 73 (citation and footnote omitted) (upholding, on plain error review, the defendant's conviction, in a single proceeding, for drug trafficking and contempt for violating the terms of his pretrial release).
[¶ 7] Under this analysis, the determination whether Labbe was subjected to a violation of the Double Jeopardy Clause protection against a second prosecution for the same offense after conviction turns on whether the State prosecuted the operating after suspension and violation of condition of release charges in a single proceeding. Labbe contends that the prosecution of the violation of condition of release is a totally separate proceeding from the guilty plea on the charge of operating while his license was suspended. We disagree. Labbe's prosecution for both charges occurred in a single proceeding.
[¶ 8] The prosecution of Labbe on the charges of operating while his license was suspended and violation of condition of release is analogous to the constitutionally permissible prosecution on multiple charges in Johnson, 467 U.S. at 500, 104 S.Ct. 2536. In Johnson, the defendant was indicted for four offenses ranging from murder to grand theft. Id. at 494, 104 S.Ct. 2536. He offered to plead guilty to charges of involuntary manslaughter and grand theft, but he pleaded not guilty to charges of murder and aggravated robbery. Id. The state objected to the pleas, but the trial court accepted them, sentenced the defendant, and granted his motion to dismiss the two more serious charges on the basis of double jeopardy. Id. The Supreme Court reversed, holding that there was no double jeopardy because all four charges were returned in a single indictment and prosecuted in a single proceeding. Id. at 500-01, 104 S.Ct. 2536. The Court stated:
Respondent's argument is apparently based on the assumption that trial proceedings, like amoebae, are capable of being infinitely subdivided, so that a determination *696 of guilt and punishment on one count of a multicount indictment immediately raises a double jeopardy bar to continued prosecution on any remaining counts that are greater or lesser included offenses of the charge just concluded. We have never held that, and decline to hold it now.
Id. at 501, 104 S.Ct. 2536. The Supreme Court noted that (1) there was no issue of prosecutorial overreaching, and (2) it was the defendant's pleas, rather than any action by the state, that brought about the separate dispositions of the charges. Id. at 501-02, 104 S.Ct. 2536. The Court concluded that the defendant "should not be entitled to use the Double Jeopardy Clause as a sword to prevent the State from completing its prosecution on the remaining charges." Id. at 502, 104 S.Ct. 2536. The prosecution of Labbe did not violate the Double Jeopardy Clause protection against a second prosecution for the same offense after conviction.
[¶ 9] We next address whether the prosecution violates the third Double Jeopardy Clause protection, i.e., the protection against multiple or cumulative punishments for the same offense. Cumulative punishment, if imposed in a single prosecution, is constitutionally permitted as long as the legislature intends to permit it. Missouri v. Hunter, 459 U.S. 359, 366, 103 S.Ct. 673, 74 L.Ed.2d 535 (1983). In Hunter, the Court stated: "With respect to cumulative sentences imposed in a single trial, the Double Jeopardy Clause does no more than prevent the sentencing court from prescribing greater punishment than the legislature intended." Id.
[¶ 10] Labbe argues that the Legislature must expressly mandate cumulative punishment in order to avoid double jeopardy issues. We disagree. In Hunter, the Supreme Court affirmed the principle of statutory construction that legislative intent must be clear, holding that the Missouri legislature had specifically authorized cumulative punishment under the two statutes at issue in that case. Id. at 367-68, 103 S.Ct. 673. Although in Hunter, cumulative punishment was mandated by the legislature for the statutes at issue, id. at 362, 103 S.Ct. 673, we interpret Hunter to require only that (1) legislative intent to permit cumulative punishment be clear, and (2) cumulative punishment be specifically authorized. Id. at 366-67, 103 S.Ct. 673. We do not interpret Hunter to require the Legislature to mandate cumulative punishment in order to avert a double jeopardy challenge.
[¶ 11] In Henry, the First Circuit did not require the legislature to expressly mandate cumulative punishment. 519 F.3d at 72. Henry dealt with a double jeopardy claim that is closely analogous to Labbe's on the issue of multiple punishment. In Henry, the defendant had violated pre-trial bail conditions by possessing heroin with intent to distribute. Id. at 70. He pleaded guilty to both the drug charge and contempt of court in a single proceeding. Id. at 72. The court noted that it did not need to analyze the case under law applicable to successive proceedings, but could restrict its analysis to whether multiple punishments, imposed in a single proceeding, violated the defendant's constitutional rights. Id. The court held that the defendant failed to meet his burden, on plain error review, to demonstrate that the legislature did not intend to permit multiple punishments in these circumstances. Id. at 73-74. The court noted that "the nature of the contempt statute arguably presupposes the notion that Congress intended multiple punishments in situations where the breach of a court's order is likewise a violation of substantive criminal law." Id. at 72.
*697 [¶ 12] The Maine Bail Code reflects legislative intent to permit cumulative punishments for both operating after suspension and violation of condition of release because it mandates the bail condition that the defendant refrain from committing new criminal conduct, 15 M.R.S. § 1026(1) (2008), and it makes a violation of condition of release a crime independent of the new criminal conduct on which the violation of condition of release charge is based. 15 M.R.S. § 1092(1) (2008). Likewise, the sentencing statute indicates legislative intent to permit cumulative punishments for violation of condition of release by providing that a sentence may be consecutive when the defendant was on bail or probation at the time he or she committed the subsequent offense. 17-A M.R.S. § 1256(2)(B), (C) (2008). It is clear that the Legislature intended to permit cumulative punishments for both violation of condition of release and the new criminal conduct on which the violation of condition of release charge is based.
[¶ 13] Labbe argues that State v. Thornton, 540 A.2d 773 (Me.1988), and State v. Poulin, 538 A.2d 278 (Me.1988), preclude his prosecution for the violation of condition of release offense after he pleaded guilty to the charge of operating while his license was suspended. In Thornton, the crimes at issue were rape, gross sexual misconduct, and unlawful sexual contact. 540 A.2d at 774-75. In Poulin, the crimes at issue were rape and gross sexual misconduct. 538 A.2d at 278. We did not analyze either case under the Double Jeopardy Clause protection against multiple punishments and did not discuss legislative intent. If, as here, the offenses are the same and are being prosecuted in a single proceeding, the appropriate analysis is under the third of the Double Jeopardy Clause protections, i.e., the protection against multiple punishments, and the intent of the Legislature must be considered. Because the Legislature intended to permit cumulative punishment for the violation of condition of release and the new criminal conduct on which the violation of condition of release charge is based, Labbe has not been subjected to any violation of the Double Jeopardy Clause protection against multiple punishments for the same offense.
The entry is:
Judgment vacated. Remanded for further action consistent with this opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537228/ | 979 A.2d 1226 (2009)
Lavern R. BENTT, Petitioner,
v.
DISTRICT OF COLUMBIA DEPARTMENT OF EMPLOYMENT SERVICES, Respondent, and
Georgetown University Hospital, Intervenor.
No. 08-AA-110.
District of Columbia Court of Appeals.
Argued March 24, 2009.
Decided September 10, 2009.
*1228 Samuel J. DeBlasis, II, Lanham, MD, for petitioner.
Jeffrey W. Ochsman, Washington, for intervenor.
Peter J. Nickles, Interim Attorney General for the District of Columbia at the time the statement was filed, Todd S. Kim, Solicitor General, Donna M. Murasky, Deputy Solicitor General, and David A. Hyden, Assistant Attorney General, filed a statement in lieu of brief in support of intervenor.
*1229 Before WASHINGTON, Chief Judge, and KRAMER and OBERLY, Associate Judges.
OBERLY, Associate Judge:
The Compensation Review Board of the District of Columbia Department of Employment Services held that Lavern Bentt suffered an injury arising out of and in the course of her employment for which the exclusive remedy is provided by the District of Columbia Workers' Compensation Act, D.C.Code § 32-1504 (2001). We reverse.
I. Factual Background and Procedural History
This case is before us for a second time. In our earlier opinion, Georgetown University v. District of Columbia Dep't of Employment Servs., 830 A.2d 865 (D.C.2003) ("Bentt I"), we described the facts as follows:
In 1994, claimant Lavern Bentt, M.D., was employed as a fellow [in pain management in the Department of Anesthesiology] at the Georgetown University Hospital. . . . On October 2, 1994, Dr. Bentt experienced some "difficulty" in her left lower ankle when she attended on her own time a banquet while wearing tight shoes. At the beginning of the following work week she "noticed [she] was having a new discomfort in her left ankle. . . ."
During the ensuing work days, Dr. Bentt's colleagues and her supervisor, Charles A. Buzzanell, M.D., noticed that she was limping throughout the day and he offered to treat her condition. She declined but, on or about October 6, 1994, when Dr. Buzzanell offered again to administer a nerve block to Dr. Bentt's left ankle area, she accepted. They went to a treatment room at a time they had agreed upon and, in the presence of the senior resident, Dr. Buzzanell administered the injection. The ankle then, "felt a lot better." She "thanked him very much, and . . . continued on with [her] day." Although the injection provided temporary relief, the next day the pain returned. At Dr. Bentt's request, Dr. Buzzanell administered a second nerve block on October 7, 1994, which contained a lower level of steroids. The second nerve block did not reduce the level of pain for long, and after several days Dr. Bentt sought other medical attention. Over a period of time, Dr. Bentt's pain lessened. However, the skin in the area in which the nerve block injections were administered became ulcerous. Dr. Bentt had to have surgery to cover the ulcerated region.
Id. at 868-69.
Bentt initially filed a medical malpractice lawsuit against the Hospital in the Superior Court of the District of Columbia. Bentt I, 830 A.2d at 869. Before the matter went to trial, the Hospital moved for summary judgment on jurisdictional grounds, arguing that Bentt suffered a workplace injury for which the sole remedy was workers' compensation. Id. "Mindful of the holding of this court in Harrington v. Moss, 407 A.2d 658, 661-62 (D.C. 1979), the Superior Court stayed the civil matter in order to permit the Department of Employment Services to determine whether it has jurisdiction over the matter pursuant to the Workers' Compensation Act." Bentt I, 830 A.2d at 869.
Bentt then filed a claim with DOES, seeking a denial of benefits in order to be able to pursue her tort action. Bentt I, 830 A.2d at 869. A DOES Hearing Examiner initially issued a Compensation Order finding that Bentt did not sustain an injury "arising out of and in the course of her employment." Id. The Hearing Examiner reasoned that because "the conditions of *1230 [Bentt's] employment did not play a role in her original left foot and ankle conditions," evidence pertaining to the injections that Buzzanell administered in order to treat those conditions was "irrelevant." Id. at 871-72. The Hospital appealed that decision to the Director of DOES, who affirmed the Order of the Hearing Examiner. The Hospital then sought this court's review.
Rejecting as "not sustainable" the Hearing Examiner's assessment of the relevance of the injections, we reversed and remanded the agency's decision. Bentt I, 830 A.2d at 872. We observed that to determine whether an injury "arises out of" employment, this court has adopted the positional-risk test. "Under the positional-risk test, an injury arises out of employment so long as it would not have happened but for the fact that conditions and obligations of the employment placed claimant in the position where she was injured." Id. at 872. Although we observed that "the existing record could itself serve as an adequate basis" for holding that Bentt's injury arose out of and in the course of her employment, we did not conclusively determine that question. Instead, noting that the record before us at the time did not include "the depositions of Dr. Bentt and Dr. Buzzanell (other than an excerpt)," we "return[ed] the case to the agency" to allow a "hearing examiner [to] address the causal significance of the injections something he did not do originally and make appropriate findings of fact and conclusions of law." Id.[1]
On remand, an Administrative Law Judge issued a Compensation Order on Remand in which, per Bentt I, he examined the "causal significance of the injections." Bentt I, 830 A.2d at 872. The ALJ, however, found a result that Bentt I did not anticipate: the injections did not arise out of Bentt's employment. As the ALJ explained, "there was no work-related event, activity, or requirement in the regular performance of [Bentt's] employment that would have exposed her to receiving nerve block injections." The ALJ found "nothing in the record that allows for the conclusion that by walking rounds [Bentt] was exposed to the potential of receiving nerve block injections or the resulting complications she had from those injections."
The Hospital appealed to the Compensation Review Board, and the Board reversed. The Board acknowledged that its review was "limited to making a determination as to whether the [ALJ's] factual findings . . . [were] based upon substantial evidence in the record, and whether the legal conclusions drawn from those facts [were] in accordance with applicable law." But the Board appears to have felt constrained by the statement in Bentt I that the record before us "could" have been deemed sufficient to hold that Bentt's injuries were compensable under the Act. Bentt I, 830 A.2d at 872. Accordingly, the Board concluded that "had the ALJ properly applied the positional risk standard. . . as ordered by the Court of Appeals in the instant matter, the result would be that the injection administered by Dr. Buzzanelli [sic] . . . would be classified as [a compensable] injury." The Board did not *1231 point to any facts in support of this conclusion, and aside from noting this court's ruling in Bentt I, the Board did not explain why it believed that the ALJ erred in applying that test.
So the case went back to the ALJ once more, and, complaining that the "Board in effect [had] decreed this result," the ALJ issued a Second Compensation Order on Remand, in which he reluctantly held that Bentt's injuries arose out of and in the course of her employment. The ALJ observed that Bentt I refused to rule on this question definitively and remanded instead for further findings. Yet, apparently feeling that his hands were tied by the Board, the ALJ abandoned his earlier finding that nothing in the record suggested that Bentt's employment exposed Bentt to receiving injections. Instead, the ALJ concluded that Bentt's claim was compensable because (1) Bentt "was within the boundaries of time and space created by her employment at [the] time she received the injections"; and (2) "the injections arose directly from her limping and obvious discomfort as she performed her work." Per the Board's instruction in its reversal of the first Compensation Order on Remand, the ALJ also supplemented the record to include a complete copy of Buzzanell's deposition.
Then Bentt appealed to the Board, and this time, the Board affirmed. The Board reasoned that but for Bentt's employment with the Hospital, "she would not have obtained the injurious injections." The Board also stated, without citing any evidence in the record, that the injections "were presumably given at least in part to enhance [Bentt's] ability to continue to perform [her work] duties." Bentt then petitioned this court to review the Board's decision.
II. Standard of Review
"This court reviews DOES decisions to determine whether they are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. We affirm an administrative agency decision when (1) the agency made findings of fact on each contested material factual issue, (2) substantial evidence supports each finding, and (3) the agency's conclusions of law flow rationally from its findings of fact. We do not affirm an administrative determination which reflects a misconception of the relevant law or a faulty application of the law." Georgetown Univ. v. District of Columbia Dep't of Employment Servs., 971 A.2d 909, 915 (D.C.2009) ("Ford") (internal citations, quotation marks, and alterations omitted). "[A]lthough we accord weight to the agency's construction of the statutes which it administers, the ultimate responsibility for deciding questions of law is assigned to this court." Kuri Bros., Inc. v. District of Columbia Bd. of Zoning Adjustment, 891 A.2d 241, 245 (D.C.2006) (internal quotation marks omitted).
"[O]ur standard of review mirrors that which [the Board] is bound to apply." Marriott Int'l v. District of Columbia Dep't of Employment Servs., 834 A.2d 882, 885 (D.C.2003). Thus, the Board "may not consider the evidence de novo and make factual findings different from those of the [ALJ]." Id. Instead, the Board "is bound by the [ALJ's] findings of fact even though the [Board] may have reached a contrary result based on an independent review of the record. If substantial evidence exists to support the [ALJ's] findings, the existence of substantial evidence to the contrary does not permit the [Board] to substitute [its] judgment for that of the [ALJ]. Rather, the [Board] may reverse a[n] [ALJ's] order only when it is unsupported by substantial evidence, or is *1232 otherwise legally incorrect." Id. at 885-86 (internal citations omitted).
III. Legal Discussion
Bentt argues that the Board erred in finding that she sustained an injury that arose out of and in the course of her employment because (1) the injections did not constitute a separate and distinct compensable injury; (2) the injections did not arise out of her employment; and (3) the injections did not occur in the course of employment.
A. Whether the injections constituted a separate injury
Bentt's argument that the injections were treatment for a non-work-related injury, not a separate injury, is foreclosed by Bentt I, where we deemed "not sustainable" the hearing examiner's conclusion that evidence regarding the injections was "irrelevant." Bentt I, 830 A.2d at 872. Our conclusion that the injections could be a separate injury (provided that the injections arose out of and in the course of Bentt's employment) was the linchpin of our decision to reverse in Bentt I. Had we concluded that the injections were "treatment" rather than an "injury," we would have had no occasion to remand. Thus, our holding that the injections could be considered a separate injury is the law of the case, and we shall not revisit that holding here. See, e.g., Lenkin Co. Mgmt., Inc. v. District of Columbia Rental Hous. Comm'n, 677 A.2d 46, 48 (D.C.1996).
B. Whether the injections arose out of and in the course of Bentt's employment
"In order to receive workers' compensation, an injury must both arise out of and occur within the course of the employment." Kolson v. District of Columbia Dep't of Employment Servs., 699 A.2d 357, 359 (D.C.1997) (internal quotation marks omitted). We agree with Bentt, and hold that neither element was satisfied in this case.
1. "Arise out of employment"
The requirement that an injury arise out of employment "refer[s] to the origin or cause of the injury." Kolson, 699 A.2d at 361 (internal quotation marks omitted). "[A]ll risks causing injury to a claimant can be brought within three categories: risks distinctly associated with the employment, risks personal to the claimant, and `neutral' risks-i.e., risks having no particular employment or personal character. Harms from the first are universally compensable. Those from the second are universally noncompensable." Ford, 971 A.2d at 920 n. 10. To determine whether harm from an injury caused by a neutral risk arises out of one's employment, this court has adopted the positional-risk test. Id. at 916. Under the positional-risk test, "an injury arises out of employment so long as it would not have happened but for the fact that conditions and obligations of the employment placed claimant in a position where he was injured." Clark v. District of Columbia Dep't of Employment Servs., 743 A.2d 722, 727 (D.C.2000).
As described above, Bentt I remanded the case to the agency to allow it to determine in the first instance whether the injections that allegedly harmed Bentt arose out of and in the course of Bentt's employment. Bentt I, 830 A.2d at 872. The ALJ carried out this directive and found that "there was no work-related event, activity, or requirement in the regular performance of [Bentt's] employment that would have exposed her to receiving nerve block injections." The ALJ found "nothing in the record that allows for the conclusion that by walking rounds [Bentt] was exposed to the potential of receiving *1233 nerve block injections or the resulting complications she had from those injections." Put differently, it was not the "conditions and obligations of the employment," Clark, 743 A.2d at 727, but rather circumstances personal to Bentt that placed Bentt in the position where she was hurt.
Under established principles of review, the Board was required to uphold that determination unless it was not supported by substantial evidence or was in conflict with applicable law. Marriott Int'l, 834 A.2d at 885-86. The ALJ's factual assessment was indisputably correct, and the Board did not attempt to undermine it.
The ALJ's legal analysis, in turn, was consistent with our case law discussing the "arising out of" element, beginning with Grayson v. District of Columbia Dep't of Employment Servs., 516 A.2d 909 (D.C. 1986). In that case, Grayson, a busdriver with the Washington Metropolitan Area Transit Authority, sought workers' compensation "for an injury she received while pulling out of a parking space during her lunch break." Id. at 910. The Director of DOES denied Grayson's request because "in no sense" could it "be said that the conditions of [Grayson's] employment as a busdriver exposed her to the dangers attendant the personal use of her automobile during her lunch break." Id. at 912-13. This court affirmed. Id. at 913. Similarly, although in some crude sense the injections had a but-for relationship with Bentt's employment, the injections did not arise out of Bentt's employment for purposes of the Act because, as the ALJ found, the conditions of Bentt's employment did not expose Bentt to the dangers of a maladministered injection. See id.; cf. Washington Hosp. Ctr. v. District of Columbia Dep't of Employment Servs., 821 A.2d 898, 900 (D.C.2003) (affirming disability award to employee who was injured "resulting from a pre-employment inoculation obtained as a condition of employment") (emphasis added).
Because the ALJ's first Compensation Order on Remand was supported by substantial evidence and consistent with applicable law, the Board "exceeded [its] permissible scope of review" by reversing that Order. Marriott Int'l, 834 A.2d at 887. It is true that in Bentt I, we stated that the record before us at the time "could" have supported a finding that Bentt's injury arose out of and in the course of her employment. Bentt I, 830 A.2d at 872. We appreciate that the Board might have felt that this statement left the agency no discretion to reach a contrary conclusion, but that reading of Bentt I is wrong. If our intent in Bentt I was to conclusively determine the question, we would have reversed, not remanded.
Further proceedings after the Board's erroneous reversal of the ALJ's first Compensation Order on Remand do not alter our analysis. In the Second Compensation Order on Remand, feeling his hands tied by the Board, the ALJ ruled that "the offer of Dr. Buzzanell to give [Bentt] the injections arose directly from her limping and obvious discomfort as she performed her work." We do not dispute this finding, but hold that legally it is insufficient to satisfy the "arising out of" element because, as the ALJ wrote in the first Compensation Order on Remand, the "conditions and obligations" of Bentt's employment had nothing to do with Bentt's receiving the injections. See Grayson, 516 A.2d at 912-13.
Attempting somehow to tie the injections to Bentt's job, the Board opined after Bentt appealed the Second Compensation Order on Remand that the injections "were presumably given at least in part" to help Bentt perform her duties. (Emphasis added.) But the Board cited nothing *1234 in support of this supposition, with respect to either the first or the second injection, and indeed, there was no such evidence in the record before the ALJ. Although Buzzanell testified that he had seen Bentt "having difficulty walking on rounds," there is no evidence that when he administered the first injection, Bentt, Buzzanell, or anyone else thought that Bentt's limp was impairing her performance of her job, whether by causing her to take extra breaks, increasing the time it took for her to achieve her tasks, or otherwise. We are not saying that the record precluded the ALJ from finding that Buzzanell intended to help Bentt perform her job, but that is not the finding that the ALJ made. And because the ALJ's initial finding on remand was supported by substantial evidence and not foreclosed by Bentt I, the Board was not permitted to "substitute [its] judgment for that of the [ALJ]." Marriott Int'l, 834 A.2d at 885. We also note that Buzzanell's testimony played no role in the Board's analysis either, as made clear by the fact that the Board ordered the ALJ to find that the injections arose out of Bentt's employment before the Board had seen Buzzanell's deposition. That the Board did not cite Buzzanell's testimony in the Order that is now on review further demonstrates that the Board's decision was the product of legal error i.e., overreading Bentt I rather than a factual analysis to which we must defer. What is more, the tie between the second injection and Bentt's work was even more tenuous than the link between Bentt's job and the first injection. Buzzanell testified that he gave Bentt the second injection to make her more comfortable at a wedding she planned to attend on her own time. To be sure, Bentt denied that the second injection was for that purpose, but neither did she say that she asked for the injection to help her perform her job.
In sum, we hold that the Board's latest conclusion that the injections arose out of Bentt's employment must be reversed because it rests on a misunderstanding of the law (the erroneous belief that the remand in Bentt I had the effect of reversal) and is not supported by substantial evidence (but instead by the unsupported speculation that the injections were given with the goal of helping Bentt perform her job). Our review persuades us that, as the ALJ found in the first Compensation Order on Remand, "the conditions and obligations," Grayson, 516 A.2d at 911, of Bentt's employment did not place Bentt in the position where she was harmed; Bentt's injury arose out of a personal, and therefore non-compensable, risk. See Ford, 971 A.2d at 920 n. 10.[2]
2. "Arise in the course of employment"
Even if Bentt's injuries arose out of her employment, we hold that they are not compensable under the Act because the injections did not arise in the course of Bentt's employment. The determination whether an injury took place in the course of employment is made on the basis of "the time, place and circumstances under which the injury occurred. [A]n accident occurs `in the course of employment' *1235 when it takes place within the period of employment, at a place where the employee may reasonably be expected to be, and while he or she is reasonably fulfilling duties of his or her employment or doing something reasonably incidental thereto." Kolson, 699 A.2d at 361 (most internal quotation marks omitted).
In this case, there is little dispute that the injections took place at Bentt's workplace during work hours. The question, therefore, is whether Bentt was doing something "reasonably incidental" to her employment when she received her injections. Kolson, 699 A.2d at 361. To that, the answer plainly is no. There simply is no evidence that when Bentt was lying face down receiving injections from Buzzanell, she was "engaging in a reasonable and foreseeable activity that [was] reasonably related to or incidental to . . . her employment." Id.
The Hospital concedes that Bentt's "injections were not directly related to her employment." It nonetheless attempts to fit this case into the workers' compensation paradigm by claiming that the injections "constitute[d] a personal activity [that], as noted by the Compensation Review Board, [was] ultimately of mutual benefit to both" Bentt and the Hospital. We have explained previously that the factual underpinnings of this argument are lacking. There is no evidence that Buzzanell's injections of Bentt were motivated by, or had the effect of, benefitting the Hospital.
More importantly, as a legal matter, the Hospital misreads our statement in Kolson that the "in the course of" requirement may be satisfied where an injury occurs "in the performance of an activity related to employment, which may include . . . an activity of mutual benefit to employer and employee." Kolson, 699 A.2d at 360 (internal quotation marks omitted). Under Kolson, what counts for the purposes of the "in the course of" analysis is whether the activity at issue "relate[s] to [one's] employment." That an activity is beneficial to both the employer and the employee may, but does not necessarily, illustrate that relation. The Hospital's error lies in treating an example of how the rule may be satisfied as though the example itself were the rule. Tellingly, Kolson did not rest on the rationale that the employee's activity benefitted the employee and the employer alike. Rather, Kolson held that the "in the course of" requirement had been satisfied because the employee was engaged in an activity that was "reasonable," "foreseeable," and "reasonably related or incidental" to the employee's employment. Id. at 361.
And in any event, Kolson is readily distinguishable. Kolson concerned employees "whose work entails travel away from the employer's premises" and who, therefore, are faced with the "necessity of sleeping in hotels or eating in restaurants away from home." Kolson, 699 A.2d at 360. For such employees, "travel is deemed a work-related risk" because, unlike "ordinary commuters," traveling employees "are exposed, by virtue of their employment, to risks greater than those encountered by the traveling public." Id. As a result of the unique features of jobs that require travel, "the traditional meaning of `arising in the course of the employment' generally is not followed in traveling employee cases." Id. at 361.
In this case, by contrast, nothing in the record suggests that for the Hospital's employees, receiving injections was a "work-related" risk similar to the risks attendant to travel faced by traveling employees. As we have emphasized, there is no evidence that either the Hospital or its employees believed that getting injections in the manner in which Bentt got her ill-fated injections *1236 was a "necessity" that for all intents and purposes was incidental to the job. Nor is there evidence that the Hospital's employees face "risks greater than those encountered by the [general] public," Kolson, 699 A.2d at 360, insofar as medical malpractice is concerned. Thus, there is no reason, as there was in Kolson, to relax the "in the course of" element. Accordingly, we hold that the "in the course of" employment requirement has not been met in this case. Therefore, Bentt did not suffer an injury within the meaning of the Act.
IV. Conclusion
The Board erred as a matter of law in holding that Bentt suffered an injury that arose out of and in the course of Bentt's employment. Because the Board's error was a legal one, and because the facts relevant to our disposition of this case are not in dispute, further factfinding is unnecessary. See, e.g., Adjei v. District of Columbia Dep't of Employment Servs., 817 A.2d 179, 181-82 (D.C.2003) (concluding that "no remand [was] necessary" where "statute [would] not admit of the construction that [petitioner] advance[d]"); Kieffer v. Kieffer, 348 A.2d 887, 891 (D.C.1975) (no remand required "where the factual matters dispositive of the action appealed are no longer in dispute"). Therefore, we reverse the Board's decision and remand the case to the Board with instructions to remand the case to the ALJ with further instructions to deny Bentt's claim.
So ordered.
KRAMER, Associate Judge, dissenting.
The majority opinion is problematic in several ways: it (1) disregards our conclusion in Georgetown Univ. v. District of Columbia Dep't of Employment Servs., 830 A.2d 865 (D.C.2003) ("Bentt I"); (2) improperly concludes that Bentt suffered only a "personal" injury; and (3) fails to give the appropriate deference to the agency's decision. The Board's decision that Bentt's injury arose out of and in the course of employment is in accordance with law and supported by substantial evidence in the record. It should therefore be affirmed.
In Bentt I, supra, we noted that
[t]he record offers strong support for the hospital's position that Dr. Bentt's supervisor, Dr. Buzzanell, administered the injections to her in order to lessen her discomfort at work and to enable her to be pain free, both as she performed her work and otherwise, and that the administration of the injections arose out of Dr. Bentt's employment and in the course of her work.
830 A.2d at 871. We added that
In this case, the offer of Dr. Buzzanell to give Dr. Bentt the injections arose directly from Dr. Bentt's limping and obvious discomfort as she performed her work. We are reluctant, however, to rule conclusively that the injections and the resulting aggravation or complication of Dr. Bentt's original ankle injury arose out of and in the course of her employment. . . . Although the existing record could itself serve as an adequate basis for that conclusion, we think it is the better course to return the case to the agency so that a hearing examiner may address the causal significance of the injections something he did not do originally and make appropriate findings of fact and conclusions of law.
Id. at 872 (emphasis added).
The conclusion of the majority, that Bentt's injury was personal to her and did not arise out of and in the course of her employment, is markedly inconsistent with Bentt I, which is binding on us. While Bentt I did not dictate the conclusion that Bentt's injury arose out of and in the *1237 course of employment, it recognized that the record at that time suggested that conclusion. It did not so rule conclusively because the court did not have before it the complete depositions of Dr. Buzzanell and Bentt, but its language clearly indicated that unless some new and unexpected evidence emerged on remand, the Workers' Compensation Act covered Bentt's injections and resulting injury. No such evidence emerged. After the ALJ and the Board addressed the causal significance of the injections and made appropriate findings of fact and conclusions of law, as we ordered them to do, both the ALJ and the Board concluded that Bentt's injury did arise out of and in the course of employment. To now hold that the Board was erroneous in reaching this conclusion sends a confusing and contradictory message.
"This court's review of decisions of administrative agencies is limited to determining whether the order is in accordance with law and supported by substantial evidence in the record." Bentt I, supra, 830 A.2d at 869-70 (citations and internal quotation marks omitted). In workers' compensation cases, we review the Board's decision rather than the ALJ's decision. Georgetown Univ. Hosp. v. District of Columbia Dep't of Employment Servs., 916 A.2d 149, 151 (D.C.2007). "In doing so, however, we cannot ignore the compensation order which is the subject of the Board's review." Id. The majority errs in basing its decision in part on the ALJ's first Compensation Order on Remand, issued February 18, 2005, which was reversed by the Board on May 6, 2005. The decision that we are reviewing is the January 24, 2008 Board decision, which affirmed the ALJ's second Compensation Order on Remand, issued on November 21, 2007. We are not reviewing the ALJ's first Compensation Order on Remand or the May 6, 2005 Board decision. The only question before this court is whether the Board's January 24, 2008 decision is in accordance with law and supported by substantial evidence in the record. The findings of fact underlying the Board's opinion are binding on us unless they are not supported by substantial evidence. And there is no showing that this is not the case here.
We recently clarified that the positional-risk standard is applied only "[i]n cases where an employee's injury arises neither out of a risk directly associated with employment nor out of a risk personal to the employee. . . ." Georgetown Univ. v. District of Columbia Dep't of Employment Servs., 971 A.2d 909, 916 (D.C.2009) ("Ford"). At the time it rendered the decision below, the Board did not have the benefit of Ford, so it understandably did not use the exact language used in that case. Nonetheless, the Board determined that application of the positional-risk standard was appropriate, and we must affirm that decision so long as it is in accordance with the law.
The majority concludes that Bentt's injuries arose out of circumstances personal to her, but this conclusion is erroneous. In Dr. Buzzanell's deposition, he testified that "[w]hen [Bentt] was having problems with acute tendinitis, we saw her having difficulty walking on rounds." (emphasis added). He also testified that "when she was limping on rounds and volunteering information about how this was bothering her . . . I said in passing one could get a pain relief infiltration block of the tendon, and I volunteered my services."
Where Bentt's supervisor offered her injections after he saw her limping on the job and gave her the injections at their workplace during her work hours, it does not follow that the injury resulted solely from a risk personal to Bentt. At a minimum, *1238 these facts support a finding that Bentt's injury arose out of a risk neither directly associated with her employment nor personal to her. Some evidence suggesting that an injury may have been personal in its origin is not sufficient to support that a later workplace injury was in fact merely personal. See Clark v. District of Columbia Dep't of Employment Servs., 743 A.2d 722, 729-30 (D.C.2000) (although there was a strong inference that Clark's assailant had some sort of prior knowledge about and animus toward her, "this evidence was not `specific and comprehensive' enough to remove doubts and rebut the presumption of coverage, for the precise reason that the motive behind the assault remains unknown and speculative"). Thus the Board's decision to apply the positional-risk standard was in accordance with law and supported by substantial evidence.
I must take issue with the majority opinion's position that in reviewing the ALJ's first compensation order on remand the Board impermissibly substituted its judgment for that of the ALJ. The Board disagreed with the ALJ's conclusion of law that Bentt's injury did not arise out of and in the course of her employment. The ALJ found as facts that Bentt returned to work two days after injuring her foot at a banquet, that she continued to experience pain throughout the workday, that her colleagues noticed her limping and in pain, and that her supervisor, Dr. Buzzanell, noticed this and offered to treat her. The ALJ noted that Bentt was required by her job to walk rounds for approximately two hours a day, and that her limping prompted Buzzanell to offer her the nerve block.
Under the positional-risk standard, "[a]n injury arises out of the employment if it would not have occurred but for the fact that conditions and obligations of the employment placed claimant in a position where he was injured." Grayson v. District of Columbia Dep't of Employment Servs., 516 A.2d 909, 911 (D.C.1986) (quoting 1 LARSON, The Law of Workmen's Compensation § 6.50 (1984)). The positional-risk standard "obviates any requirement of employer fault or of a causal relationship between the nature of the employment and the risk of injury. Nor need the employee be engaged at the time of the injury in activity of benefit to the employer." Clark, supra, 743 A.2d at 727 (citations omitted). As the ALJ found, and the Board affirmed, "the offer of Dr. Buzzanell to give Claimant the injections arose directly from her limping and obvious discomfort as she performed her work." Accordingly, Bentt's injury would not have occurred but for the fact that conditions and obligations of employment placed her in a position where she received the injection that injured her. Thus, her injury arose out of her employment.[1]
Bentt testified that the injections occurred at her work place during her work *1239 day. Although Bentt was not required to receive the injections as a condition of her employment, she was repeatedly offered the injections by her supervisor after he noticed that she was limping on the job. Had the injections effectively eliminated Bentt's pain, they would have enabled her to perform her job more efficiently and comfortably, since she would not have been limping or in pain. Dr. Buzzanell's unchallenged testimony that he offered the injections because the claimant was having difficulty making her rounds, i.e., doing her job, contradicts the majority's statement that the Board engaged in unsupported speculation in concluding that the injections were given with the goal of helping Bentt perform her job. On these facts, the Board's decision that Bentt's injuries arose "in the course of employment" was supported by substantial evidence and in accordance with the law. Given Bentt I and the deference that we are required to give agency decisions, the Board's decision that Bentt's injury arose out of and in the course of employment should be affirmed.
NOTES
[1] We affirmed the finding that Bentt's initial tendinitis did not constitute an accidental injury under the Act. Bentt I, 830 A.2d at 874. In addition, we remanded for findings as to whether Bentt's tendinitis was aggravated by the requirements of her job or by the injections. Id. at 873-74. Ultimately, the ALJ found that Bentt's non-work-related tendinitis was not aggravated either by the physical requirements of her job or by the injections, the CRB affirmed this aspect of the ALJ's decision, and the Hospital has not challenged that conclusion in this court.
[2] Of course, "`[a] worker's [sic] compensation claimant need not prove that his employment was the sole cause of his disability.'" Ford, 971 A.2d at 919 (quoting Spartin v. District of Columbia Dep't of Employment Servs., 584 A.2d 564, 570 n. 9 (D.C. 1990)). Thus, in Ford, we held that Ford's injuries would be compensable if it were shown that Ford fell "because of a combination of his idiopathic pre-existing leg condition and the presence of water on the floor where he stepped." Ford, 971 A.2d at 919. Because there is no evidence that Bentt was injured by any work-related cause, however, this dual causation rule is inapplicable here.
[1] The injections Bentt received were more closely related to her employment duties than the injuries suffered by the plaintiff in Clark, supra, 743 A.2d 722, who was assaulted and shot in the parking lot of her employer. The facts there were that Janet Clark, a dialysis technician, was working when she received a call from a co-worker who told her that a man in the office parking lot was asking for "the lady that drives the red car," which the co-worker knew to belong to Clark. Id. at 725. Although Clark did not recognize the man or the name he gave, she walked into the parking lot to speak with him, and was subsequently assaulted. Id. There was no indication that the assault was in any way related to Clark's employment. Nonetheless, this court held that "the claimant's injury arose out of [her] employment, because the terms and conditions of [her] employment placed the claimant in the position wherein [she] was assaulted by the assailant and sustained the injuries from which [she] suffered." Id. at 730 (citation omitted).
Here, the injections that caused injury were administered because Bentt's supervisor observed that as he testified he "saw her having difficulty walking on rounds," i.e., doing her job. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3070360/ | Order entered July 24, 2014
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-01442-CR
ANTWAN DOUGLAS, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the Criminal District Court No. 4
Dallas County, Texas
Trial Court Cause No. F12-63774-K
ORDER
The Court REINSTATES this appeal.
On May 23, 2014, this Court ordered the trial court to make findings regarding why the
reporter’s record has not been filed. On July 23, 2014, the Court received the reporter’s record.
Therefore, in the interest of expediting the appeal, we VACATE the May 23, 2014 order
requiring findings.
Appellant’s brief is due within thirty days of the date of this order.
/s/ LANA MYERS
JUSTICE | 01-03-2023 | 10-16-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2459258/ | 439 S.W.2d 533 (1969)
Paul D. QUINN, Charles A. Quinn, Agnes Quinn Kennedy, and Mrs. Carl Laurent, Respondents,
v.
ST. LOUIS-SAN FRANCISCO RAILWAY CO., Appellant.
No. 53431.
Supreme Court of Missouri, En Banc.
April 14, 1969.
H. K. Wangelin, Wangelin & Friedewald, Poplar Bluff, for respondents.
James M. Reeves, Ward & Reeves, Caruthersville, for appellant.
Ernest D. Grinnell, Jr., Wm. Bruce Kopper, St. Louis, of counsel, for appellant.
WELBORN, Commissioner.
The question in this case, arising by way of an action to quiet title, is whether, upon the St. Louis-San Francisco Railway's ceasing operations through Poplar Bluff in 1965, the land on which its depot stood reverted to the heirs of the grantor of the land, by virtue of a "reverter" clause in a 1901 deed, or became the property of the Frisco by reason of its ownership of adjacent land. The trial court found in favor of the heirs of the grantor and also awarded them $2,145 for loss of rent and profits. The railroad appeals.
This land was conveyed by a deed, acknowledged April 9, 1901, reading, in part as follows:
"Deed for Right-of-Way
"Be It Known, that we the undersigned, Luke F. Quinn and Mary P. Quinn, his wife, of the City of Poplar Bluff, Missouri, for and in consideration of the sum of one dollar as in hand paid, and divers other good and valuable considerations to us moving, have granted, bargained and sold, and do by these presents grant, bargain and sell unto the Southern Missouri and Arkansas *534 Railroad Company the following parcels of land in the City of Poplar Bluff, County of Butler, State of Missouri, to-wit:
(Description omitted)
"To Have and To Hold unto said Railway Company forever, subject however, to the following conditions:
"1st. The property herein granted is granted for the use as a railway and on condition that the grantor be released from his subscription of $500.00 in freights.
"2nd. The said Railway Company shall erect and maintain on the south end of the above Lot 77-A a suitable station building of modern architectural design, similar to the railway station of the said Company in Cape Girardeau, Missouri.
"3rd. The said Company shall, at its own expense, remove from the land herein conveyed, the buildings located thereon at the present time, to such other ground in the neighborhood as the said L. F. Quinn shall select.
"4th. That whenever the property herein conveyed shall cease to be utilized for the purposes hereinabove set our, for a period of six months, then this deed shall be void and the land herein granted shall revert to and become the property of the said L. F. Quinn.
"In Witness Whereof, * * *."
By deeds of April 30, 1901 and March 31, 1909, Quinn and wife conveyed to defendant's predecessors in title, the land adjacent to the tracts in question and lying to the west. The Frisco eventually became the owner of the title which the grantee in each of the three deeds had obtained.
A depot building was constructed on the land here in question and was used as such until September, 1965, when the Frisco ceased operating in Poplar Bluff. The depot building was subsequently rented for a time to the United States Post Office Department. No question is here raised as to the fact of abandonment by the railroad.
This suit was filed October 28, 1966, by the heirs at law of Quinn, seeking to quiet title in themselves against the claim of Frisco on the grounds that, by reason of the termination of the use of the property for railroad purposes, the land reverted to them by virtue of the "reverter" clause in the Quinn 1901 deed. The railroad filed an answer and counterclaim, asserting that title to the land vested in it as the owner in fee of the adjacent property on the west, the east side of the tract being bounded by a public street.
The case was submitted on a stipulation of facts, setting out essentially the above matters and the trial court found for plaintiffs. The railroad appealed.
By reason of various considerations, including the early tendency to view with disfavor corporate ownership of real estate (1 Elliott on Railroads, 3rd ed., § 452, p. 686), the turbulent early history of railroad development (Coates & Hopkins Realty Co. v. Kansas City T. Ry. Co., 328 Mo. 1118, 43 S.W.2d 817, 821), and the peculiar physical characteristics of railroad property, particularly the right of way (Brown v. Weare, 348 Mo. 135, 152 S.W.2d 649, 656, 136 A.L.R. 286), a definite policy has been established in this state which particularly controls the nature and extent of the interest of railroads in real estate. Thus, where the legislative charter of a railroad corporation authorized it to obtain the fee simple title upon condemnation, in Kellogg v. Malin, 50 Mo. 496, the court held that "* * * notwithstanding the language used, nothing more than an easement passed to the road, giving it perpetual and continuous title so long as it used the land for the purpose for which it was taken, * * *." 50 Mo. 500. Such limitation upon the right of a railroad to acquire land by condemnation was incorporated in the Constitution of 1875, Article II, § 21. Constitution of Missouri, 1945, Article I, § 26, V.A.M.S. The 1853 *535 general railroad corporation law limited the right of a railroad to hold land taken on "voluntary grant" to "the purposes of such grant only." Laws of 1853, p. 121, § 28, subpar. 2d, p. 134. Such a limitation was in effect at the time of the deed here in question. § 1035, RSMo 1899, now § 388.210(2), RSMo 1959, V.A.M.S. Some earlier cases gave rise to the question of the right of a railroad company, in any event, to take the fee in land. See Chouteau v. Missouri Pac. R. Co., 122 Mo. 375, 22 S.W. 458, 30 S.W. 299; Allen v. Beasley, 297 Mo. 544, 249 S.W. 387. However, in Coates & Hopkins Realty Co. v. Kansas City T. Ry. Co., supra, the court held that a railroad corporation might, "* * * upon a valuable consideration, by agreement and purchase and by a deed in fee, take the fee in land so purchased * * *." 43 S.W.2d l. c. 823. The court expressly noted the exception of "voluntary grants, lands condemned for railroad tracks, and conveyances of rights of way only to railroad corporations." Idem.
In State ex rel. State Highway Commission v. Griffith, 342 Mo. 229, 114 S.W.2d 976, the court concluded "that a conveyance of land to a railroad company for right of way purposes only, irrespective of the consideration, passes only an easement, * * *." 114 S.W.2d 980. Brown v. Weare, 348 Mo. 135, 152 S.W.2d 649, 136 A.L.R. 286, held the same rule applicable to a conveyance to a railroad for station grounds. The court stated:
"It reasonably follows from our statutory scheme that no different theory exists as to station grounds from the one applicable to a right of way where such purposes are set out in the deed or where limitations on the use of the grant are imposed by the deed. Therefore, from the express terms of the deed under consideration, besides from the fact that it was a voluntary grant, we find merely an easement was granted in the station grounds." 152 S.W.2d 654 [12, 13].
This conclusion is here controlling. The deed clearly limited the use of the property to railroad purposes, and specifically for a depot. Such limitation caused the deed to convey only an easement to the railroad. The fee remained in Quinn as the owner of the adjacent property. His subsequent conveyance of the adjacent property carried with it his interest in the property over which the easement had been granted. Brown v. Weare, supra. Respondents do not contest the railroad's position that the deeds to the adjacent tracts conveyed fee simple title to the grantee.
There are distinctions between the deed here and that in Brown v. Weare, but we do not find them significant. The primary difference, of course, is the "reverter" clause, present in Quinn's deed but not in Weare's. However, in view of the fact that the conveyance was for railroad purposes, the clause in the Quinn deed did nothing more than fix the period of nonuser which would cause the interest of the railroad in the property to terminate. State ex rel. State Highway Comm. v. Jacob, et al., Mo.Sup., 260 S.W.2d 22, 24 [1].
The respondents have sought to defend the trial court's judgment solely on the grounds that the conveyance by Quinn was not a "voluntary grant," within the meaning of § 388.210(2), supra. However, this position overlooks the fact that, under Brown v. Weare, the expression or limitation of the use to which the property was to be put is likewise a decisive factor.
By reason of the policy considerations peculiarly applicable in transfers of interest in real estate to railroad corporations, cases relied upon by respondents involving deeds to other entities, such as school districts (Board v. Nevada School District, 363 Mo. 328, 251 S.W.2d 20, and Nowlin v. Columbia School District, Mo.Sup., 401 S.W.2d 394) and banking corporations (White v. Kentling, 345 Mo. 526, 134 S.W.2d 39), are not controlling on the nature and extent of the estate created by the deed here in question.
*536 The judgment is reversed and the cause remanded with directions to enter judgment quieting title in the appellant as against the claim of the respondents.
PER CURIAM:
The foregoing opinion by WELBORN, C., written in Div. I, is adopted as the opinion of the Court en Banc. The judgment is reversed and remanded, with directions.
All concur.
HENLEY, J., concurs in separate concurring opinion filed.
HENLEY, Judge (concurring).
While I dissented from the majority opinion in Division, I have concluded, since transfer of the case to Banc, to concur for the following reasons. The subsequent conveyance by Quinn of the adjacent property raises a "presumption of grant" of the underlying fee in the depot property in the absence of words in that conveyance showing a different intention. Grant v. Moon, 128 Mo. 43, 30 S.W. 328; Snoddy v. Bolen, et al., 122 Mo. 479, 25 S.W. 932, 24 L.R.A. 507; Brown v. Weare, 348 Mo. 135, 152 S.W.2d 649, 654-655 [14-15], 136 A.L.R. 286. See also 9 University of Kansas City Law Review 113. The attempt by Quinn in the fourth "condition" of his deed of April 9, 1901, to cause the "land" to "revert" to him upon abandonment of the easement was ineffective as against Quinn's subsequent deeds conveying the adjoining land since the latter expressed no intent to retain the underlying fee in the easement property. See Snoddy v. Bolen, et al., supra, 25 S.W. l.c. 934, which I consider analogous and controlling as to the effect of the fourth "condition." Snoddy involved conflicting claims to minerals under half of a public street. In that case plaintiff's remote grantor by an instrument dedicating the street to public use retained the fee to the minerals in place thereunder and thereafter conveyed lots adjoining one side of the street to defendants' remote grantors by deeds which made no mention of the mineral rights retained. The court affirmed a judgment for defendants, holding that since the deeds to the lots expressed no contrary intention by exception or reservation the minerals passed to defendants who had, by deeds describing the lots only, acquired the fee to the center of the street. See also Prewitt, et al. v. Whittaker, et al., Mo., 432 S.W.2d 240, 243 et seq., [2-3]. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2857836/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-544-CR
ALBERT H. SAN MIGUEL,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF MILAM COUNTY, 20TH JUDICIAL DISTRICT
NO. 17,906, HONORABLE CHARLES E. LANCE, JUDGE
PER CURIAM
A jury found appellant guilty of involuntary manslaughter and assessed punishment
at imprisonment for seven years and a $10,000 fine. Tex. Penal Code Ann. § 19.05(a)(1) (1989).
Appellant does not contest the sufficiency of the evidence, which shows that he recklessly struck
and killed his brother, John San Miguel, with a pickup truck.
In his only point of error, appellant contends that during jury argument the
prosecutor improperly commented on his failure to testify. At the time the alleged comment was
made, the prosecutor was discussing the contents of appellant's written statement to the police,
which was in evidence. In the statement, appellant described spending the afternoon and evening
of the incident drinking with family and friends. After summarizing that portion of the statement,
the prosecutor continued:
[B]ut you know what, he says after we left Gifford's Place [a bar], I don't
remember anything but here's what's important -- until I woke up in the morning
in my pick-up. We have testimony that he left in that pick-up and he himself says
the next morning I woke up in the same pick-up and when the Sheriff asked him
about the damage to the front of his pick-up he said, I think I hit a post. So, he
remembers he hit something. You know, he just won't admit what he did.
Appellant objected that this was a comment on his failure to testify and moved for a mistrial. The
prosecutor stated that he was referring to the contents of appellant's statement. The court agreed
and overruled the motion for mistrial. Although appellant did not ask for an instruction to
disregard, the court stated that the "Motion to Strike is denied."
For there to be reversible error because of an allusion to or comment on the failure
of the defendant to testify, the implication that the challenged language referred to the failure to
testify must be a necessary one when viewed from the standpoint of the jury. Koller v. State, 518
S.W.2d 373, 375 (Tex. Crim. App. 1975). In this cause, the prosecutor's argument was clearly
directed to the contents of appellant's statement, particularly that portion of the statement in which
appellant asserted a lack of memory. We do not believe that the jury would necessarily
understand this argument to be a reference to appellant's failure to testify at trial.
Appellant also calls our attention to one other remark by the prosecutor later in his
argument. Appellant voiced no objection to this remark, which does not appear to be a reference
to appellant's failure to testify in any event. The remark was certainly not of the sort that cannot
be cured by an instruction, and any error was waived by the failure to object.
The point of error is overruled and the judgment of conviction is affirmed.
[Before Justices Powers, Jones and Kidd]
Affirmed
Filed: June 10, 1992
[Do Not Publish] | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1537539/ | 167 Conn. 123 (1974)
INTERNATIONAL BUSINESS MACHINES CORPORATION
v.
F. GEORGE BROWN, TAX COMMISSIONER
Supreme Court of Connecticut.
Argued June 4, 1974.
Decision released August 20, 1974.
HOUSE, C. J., SHAPIRO, LOISELLE, MACDONALD and BOGDANSKI, JS.
*124 Peter A. Kelly, with whom was Robert K. Giulia, for the plaintiff.
Richard K. Greenberg, assistant attorney general, with whom were Ralph G. Murphy, assistant attorney general, and, on the brief, Robert K. Killian, attorney general, for the defendant.
MACDONALD, J.
The present case comes to us by reservation from the Court of Common Pleas seeking the advice of this court as to the correct interpretation of § 12-407 (7) of the General Statutes, being a portion of chapter 219, the Education, Welfare and Public Health Tax, commonly referred to as the Sales and Use Tax Act. The specific question presented is whether "[t]he transfer of possession of tangible personal property back to plaintiff-taxpayer from an out of state subcontractor who for consideration applied skilled labor to said property supplied by the plaintiff-taxpayer, the *125 title to which remained in the plaintiff-taxpayer throughout," is a "purchase" as defined in § 12-407 (7) for purposes of computing the use tax base of the plaintiff taxpayer. For the reasons enumerated below we conclude that it is not.
The plaintiff's action, appealing a determination of the defendant tax commissioner, was reserved for the advice of this court upon the following stipulation of facts: The plaintiff, International Business Machines Corporation, hereinafter called IBM, a New York corporation with its principal place of business in Armonk, New York, is authorized to do business in Connecticut and is principally engaged in the manufacturing and marketing, for sale and lease, of computers and associated equipment. When IBM brings its equipment into Connecticut for storage, use or consumption, it is required to pay a use tax on that equipment. IBM's manufacturing and processing operations concerning computers frequently comprise the following activities: (1) purchase of materials, basic components and completed assemblies from vendors; (2) fabrication, processing and assembly within its facilities and by its own employees of said materials, component parts and assemblies; (3) furnishing of certain component parts to outside contractors who further fabricate or process them to IBM's specifications for a fee; and (4) further processing and final assembly by IBM of all materials, components and assemblies into a finished machine. None of IBM's manufacturing and processing operations at issue herein takes place within Connecticut. On December 6, 1971, the tax commissioner of the state of Connecticut, hereinafter called the commissioner, issued to IBM's Data Processing Division an assessment of additional sales and use taxes for the *126 period extending from June 30, 1968, through June 30, 1971, in the amount of $79,052.06, together with interest of $13,011.13, for a total assessment of $92,063.19.
IBM filed a petition for reassessment protesting such additional assessment and, after a hearing, received a letter from the commissioner stating that the aforesaid assessments were found to be proper. Thereafter, IBM received a statement of amount due on sales and use tax, reaffirming the position of the commissioner as stated and showing additional taxes due in the amount of $79,052.06, together with interest of $16,568.47, for a total amount claimed to be due of $95,620.53. IBM appealed this deficiency assessment to the Court of Common Pleas, the sole legal issue being the proper measure of IBM's use tax base for equipment it brings into Connecticut, it being IBM's claim that the proper measure of the use tax base on its machines is the purchase price paid by IBM for component materials and that the costs of out-ofstate subcontract labor should not be included in such base. The commissioner, on the other hand, claims that the cost of such labor performed on certain component materials must be included in IBM's use tax base on its machines in addition to the purchase price of the component materials. The parties have stipulated that if the appeal is dismissed, the deficiency assessment in the amount of $79,052.06 plus statutory interest is correct, and that if the appeal is sustained, IBM is entitled to a refund of $4,049.06.
Essentially, the issue presented is whether the use tax, levied upon an out-of-state manufacturing concern when its products enter the state for use, storage *127 or consumption, should include within its ambit the cost of labor performed upon component materials without the state, or whether it should applysolely to the cost to the taxpayer of those component materials when originally purchased. The pertinent sections of the Sales and Use Tax Act relating to this issue are printed in the footnote.[1] Both parties have noted in their briefs that if the subcontract work were performed in Connecticut the sales tax provisions would include the cost of this intermediary labor in its tax base. This is the result of the inclusion of the following subsection within the statutory definition of "sale" in § 12-407 (2) (c): "the producing, fabricating, processing, printing or imprinting of tangible personal property for a consideration for consumers who furnish either directly or indirectly the materials used in the producing, fabricating, processing, printing or imprinting...." *128 By contrast, the definition of "purchase," § 12-407 (7), which is central to the operation of the use tax; see Stetson v. Sullivan, 152 Conn. 649, 211 A.2d 685; does not contain a similar provision. The commissioner urges this court to construe the language in the definition of "purchase" to achieve a result similar to that obtained in connection with the definition of "sale" under §12-407 (2) (c). The court notes in passing that although the Sales and Use Tax Act (originally and optimistically described by its sponsors as a "temporary tax") has existed within this state for twenty-seven years, this particular issue apparently is one of first impression.
A brief excursion into the history and purpose of the act may better illustrate the area of dispute. The Sales and Use Tax Act was adopted by the General Assembly as an emergency measure to generate revenue during the post-war period when a wave *129 of social legislation extended the state's budget beyond the bounds of existing revenue measures. See S. Proc, Pt. 2, 1947 Sess., p. 250. The prime revenue source decided upon was the sales tax. The use tax was created as a complementary measure to insure the equitable diffusion of the tax burden upon both in-state purchases of tangible personal property and out-of-state purchases of tangible personal property where such property is used, stored or consumed within the state, thus being, in a certain sense, a gap-filling measure. As such, it would merit a liberal construction to achieve such purposes. However, the court is not convinced that, even given such a construction, the tax should apply in this instance.
The Sales and Use Tax Act is no stranger to this court, and we have had occasion to describe it in the past. "The two taxes, though imposed by the same act, are distinct. `A sales tax and a use tax in many instances may bring about the same result. But they are different in conception, are assessments upon different transactions, and in the interlacings of the two legislative authorities within our federation may have to justify themselves on different constitutional grounds. A sales tax is a tax on the freedom of purchase .... A use tax is a tax on the enjoyment of that which was purchased.' McLeod v. Dilworth Co., 322 U.S. 327, 330, 64 S. Ct. 1023, 88 L. Ed. 1304. Whether or not the two shall have precisely the same scope is for the determination of the legislature." Connecticut Light & Power Co. v. Walsh, 134 Conn. 295, 300, 57 A.2d 128.
There are three subparts to the definition of "purchase" under §12-407 (7). Subsection (a) is *130 the general, definitional section; subsections (b) and (c) apply to more specific situations. To constitute a purchase within subsection (a) there must exist three conditions: (1) any transfer, exchange or barter, conditional or otherwise, in any manner or by any means, whatsoever, (2) of tangible personal property, (3) for a consideration. Absence of any one of the three conditions is sufficient to exclude a transaction from this subsection. Both parties argue at considerable length in their briefs that the essential issue is whether the transaction involved is a "transfer." However, it is unnecessary to decide whether the plaintiff's reacquisition of its property was a "transfer" within the meaning of that term as used in the statute since what the plaintiff obtained was its own property and what it "purchased" was not tangible personal property but solely the labor of the subcontractor. As has been noted by the California Supreme Court, construing a statute identical to our Sales and Use Tax Act with respect to these particular provisions, there already is provision for assessing a use tax upon the value of the component materials obtained for use within the taxing state. See Chicago Bridge & Iron Co. v. Johnson, 19 Cal. 2d 162, 119 P.2d 945.[2] As a *131 matter of fact, this follows what had been the interpretation of the tax commissioner in this state since 1962.[3]
Tangible personal property is defined in § 12-407 (13) as follows: "`Tangible personal property' means personal property which may be seen, weighed, measured, felt or touched or which is in any other manner perceptible to the senses." "Personal property" has been defined by this court, with respect to its taxation under a different tax provision, in these words: "`The word "property", as that term is used in the statutes relating to assessment and taxation, refers to every species of valuable right or interest which is subject to ownership, *132 or that which has an exchangeable value or which goes to make up one's wealth or estate; all things which have a pecuniary value. "Property" says Webster, "in a broad sense, is any valuable right or interest considered primarily as a source or element of wealth."` Kansas City Life Insurance Co. v. Hammett, 177 La. 930, 934, 149 So. 525." Eric v. Walsh, 135 Conn. 85, 90, 61 A.2d 1. Subcontract labor is not "tangible personal property."
It is nothing more than labor which was supplied to IBM from the subcontractor for a consideration, that consideration being the value of such labor. The commissioner's argument that this consideration satisfies the third condition within the definition of purchase in subsection (a) is not persuasive. The statute clearly imports that the consideration to which it refers is that which is given in the transfer, exchange or barter for the tangible personal property, and not any consideration given for the subcontract labor to which the passage of the tangible personal property, here the component materials, is merely an incident.
The essence of the transaction between IBM and the subcontractor is the performance of skilled labor, and the passage of the component materials, from IBM to the subcontractor and then back to IBM, is merely incidental to such performance and is not a purchase. In United Aircraft Corporation v. O'Connor, 141 Conn. 530, 107 A.2d 398, we had occasion to consider a similar issue. There the taxpayer was challenging the assessment of a sales tax on materials valued in excess of one million dollars, purchased by it for use in certain government contracts, essentially to apply skilled engineering services. A provision of its contracts with the *133 government vested title in the government to all parts, materials, inventories, work in process and non-durable tools theretofore acquired or produced, in performance of the contracts, upon partial payment under the contract by the government. The taxpayer claimed that this provision constituted a sale at retail of these materials to the government, thus rendering its initial purchase of the materials a purchase for resale as defined by § 3291 (31/2) of the 1947 Supplement [now General Statutes § 12-407 (3)], and therefore exempt from taxation, and we agreed, stating (p. 539): "The delivery [to the government by means of the above-described clause] of such property is not a sale at retail under the act if it is merely incidental to a special service performed for the purchaser." We noted also in that case (p. 537) with regard to defining "sale" under the act that, "[t]his statutory definition controls the characterization of the transaction in the case at bar, regardless of whether a similar result would ensue upon the application of principles of common law."
The commissioner further claims that since subcontract labor is included within the tax base where the sales tax pertains, by virtue of § 12-407 (2) (c), the general purpose of the use tax, to complement the sales tax in out-of-state purchase situations, mandates that the construction of the term "purchase" reach the same result. The commissioner's argument is appealing in that such a construction would close an apparent gap in our laws. However, "[w]here the wording is plain, we will not speculate as to any supposed intention [of the legislature]. Jack v. Torrant, 136 Conn. 414, 418, 71 A.2d 705. We cannot read something into a statute in order to reach a just result. State v. Malm, 143 *134 Conn. 462, 467, 123 A.2d 276.... [The words used] must be construed according to the commonly approved usage of the language. General Statutes § 1-1; Klapproth v. Turner, 156 Conn. 276, 280, 240 A.2d 886; State v. Laffin, 155 Conn. 531, 535, 235 A.2d 650." State v. Briggs, 161 Conn. 283, 286-87, 287 A.2d 369. "When the language used in a statute is clear and unambiguous, its meaning is not subject to modification by construction. State v. Simmons, 155 Conn. 502, 504, 234 A.2d 835; Hurlbut v. Lemelin, 155 Conn. 68, 73, 230 A.2d 36. It is not the function of courts to read into clearly expressed legislation provisions which do not find expression in its words; Lenox Realty Co. v. Hackett, 122 Conn. 143, 150, 187 A. 895; nor is it our function to substitute our own ideas of what might be a wise provision in the place of a clear expression of the legislative will. Connelly v. Bridgeport, 104 Conn. 238, 249, 132 A. 690. The statute must be applied as its words direct. Obuchowski v. Dental Commission, 149 Conn. 257, 265, 178 A.2d 537." Dental Commission v. Tru-Fit Plastics, Inc., 159 Conn. 362, 365, 269 A.2d 265. When legislation contains a specific definition, the courts are bound to accept that definition. Danbury v. Corbett, 139 Conn. 379, 384, 94 A.2d 6.
Had the legislature intended the definition of purchase to encompass the specific provision under consideration (§12-407 [2] [c]) it could have done so by direct inclusion of such language within § 12-407 (7) and its failure to do so can be construed only as the deliberate intent of the legislature to omit the situations governed by § 12-407 (2) (c) from the purview of § 12-407 (7). That the legislature, in the same session and in the same act, spelled out both definitions serves to underscore this conclusion.
*135 "`There is a presumption that the legislature, in enacting a law, did so in view of existing relevant statutes and intended it to be read with them so as to make one consistent body of law.' Hurlbut v. Lemelin, ... [155 Conn. 68, 74, 230 A.2d 36]; Adams v. Vaill, ... [158 Conn. 478, 483, 262 A.2d 169]. This is particularly so when all statutes are dealt with in the same session. Hurlbut v. Lemelin, supra; Knights of Columbus Council v. Mulcahy, 154 Conn. 583, 590, 227 A.2d 413." Collins v. York, 159 Conn. 150, 162, 267 A.2d 668.
The same principles apply to the commissioner's argument that § 12-407 (7) (c) is an analogue to §12-407 (2) (c). Section 12-407 (2) (g) is identical to § 12-407 (7) (c), the word "title" within § 12-407 (2) (g) merely defining the instance of the subsection's operation. To reach the conclusion urged by the commissioner would render subsection (2) (c) superfluous, since the result it achieved would arise by implication from subsection (2) (g). "In construing a statute, no clause, sentence or word shall be treated as superfluous, void or insignificant unless there are compelling reasons why this principle cannot be followed." Niedzwicki v. Pequonnock Foundry, 133 Conn. 78, 82, 48 A.2d 369. No such compelling reasons appear in this case.
We agree that there is a disparity between the statutory definitions of "sale" and "purchase." However, it is not our province to fill every legislative gap. The commissioner's arguments, that the use tax should extend to this situation, are not without merit. "These are all arguments which might better be advanced before the General Assembly. Questions of policy are for its consideration. We *136 can only take the statutes as they have been enacted." Consolidated Diesel Electric Corporation v. Stamford, 156 Conn. 33, 39, 238 A.2d 410.
We answer the question presented, "No."
No costs shall be taxed in this court for or against any party.
In this opinion the other judges concurred.
NOTES
[1] "[General Statutes] Sec. 12-408. THE SALES TAX. (1) IMPOSITION AND RATE OF SALES TAX. For the privilege of making any sales as defined in subsection (2) of section 12-407, at retail, in this state for a consideration, a tax is hereby imposed on all retailers at the rate of ... [six and one-half] per cent of the gross receipts of any retailer from the sale of all tangible personal property sold at retail...."
....
"[General Statutes] Sec. 12-411. THE USE TAX. (1) IMPOSITION AND RATE. An excise tax is hereby imposed on the storage, use or other consumption in this state of tangible personal property, purchased from any retailer for storage, use or other consumption in this state at the rate of ... [six and one-half] per cent of the sales price of the property."
.....
"[General Statutes] Sec. 12-407. DEFINITIONS. Whenever used in this chapter:
.....
"(2) `Sale' and `selling' mean and include: (a) Any transfer of title, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property for a consideration; ... (c) the producing, fabricating, processing, printing or imprinting of tangible personal property for a consideration for consumers who furnish either directly or indirectly the materials used in the producing, fabricating, processing, printing or imprinting;... (f) a transaction whereby the possession of property is transferred but the seller retains the title as security for the payment of the price; (g) a transfer for a consideration of the title of tangible personal property which has been produced, fabricated or printed to the special order of the customer, or of any publication....
.....
"(7) `Purchase' means and includes: (a) Any transfer, exchange or barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property ... for a consideration; (b) a transaction whereby the possession of property is transferred but the seller retains the title as security for the payment of the price; (c) a transfer for a consideration of tangible personal property which has been produced, fabricated or printed to the special order of the customer, or of any publication."
[2] The California Supreme Court noted in dicta (p. 167) that the value of labor in the out-of-state production of a finished marketable item from component materials is excluded from the use tax base: "It is quite true that the tanks, or the completed but unassembled parts, which were shipped to this state were not purchased by the plaintiff in that form; they were manufactured by it. It acquired the raw materials out of which it manufactured or fabricated those completed parts, and it is the storage and use of those materials upon which the tax is based. The tax was computed upon the cost, that is, the sales price of these materials to plaintiff, and that is the price which it paid for them. The fabrication and construction of these materials into the completed articles undoubtedly enhanced their value, but the tax is not calculated on that value. It is based on the sales price to plaintiff of the materials which were used to fabricate the finished product which materials were undeniably purchased by plaintiff."
The commissioner concedes that the value of labor performed by IBM at its own out-of-state plant similarly would be excluded from its use tax base. However, the exclusion of the value of such labor, while including the value of labor performed by subcontractors not on IBM's premises, would create an anomaly no less great than that which exists presently where the sales tax, if applicable, would take cognizance of the subcontract labor in its tax base.
[3] IBM cites, in its brief, a letter from the tax commissioner indicating as follows his prior determination on this issue: "Please be advised that an out of state concern that manufactures property to be leased into Connecticut, is liable to the payment of the Connecticut Use Tax on such leased property measured at 3-½ [now 6 frac12;%] of the purchase price of the materials which comprise said leased property. The theory, of course, being that said materials are purchased for use in this state even though their form may be changed prior to said use." (Emphasis in plaintiff's brief.) Letter from Tax Commissioner to Commerce Clearing House, Inc., June 15, 1962; CCH State Tax Rep., Conn. ¶ 60-150.50 (1962). The fact that this was the prior interpretation placed upon the statute by the commissioner, who is charged with the enforcement of the statute, is entitled to weight in its construction. State v. Sober, 166 Conn. 81, 90, 347 A.2d 61; Leach v. Florkosky, 145 Conn. 490, 495, 144 A.2d 334; Clark v. Town Council, 145 Conn. 476, 485, 144 A.2d 327. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2857786/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-121-CR
JOHN ROBERT HOMANN,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF CALDWELL COUNTY, 22ND JUDICIAL DISTRICT
NO. 88-005, HONORABLE ROBERT T. PFEUFFER, JUDGE PRESIDING
John Robert Homann was convicted by the jury of misapplication of trust funds
under Section 162.031 (1) of the Property Code and was sentenced by the trial court to three years
in prison, probated for ten years. On appeal Homann asserts that the trial court erred by failing
to grant his motion for instructed verdict, failing to grant his motion to quash the indictment,
preventing him from asking a proper question to the jury during voir dire, and rendering a
decision contrary to the evidence. We will affirm the judgment of conviction.
DISCUSSION
The evidence revealed that Homann improperly used money from a trust created
by Doug Foster for the construction of Foster's house, making a number of transactions with trust
money for his personal benefit. Further, Homann lied to Foster about the state of certain accounts
and altered a check, after it had been processed by the bank, to make it appear as though the check
was written for expenses on the Foster house.
1. Instructed Verdict
Homann's first two contentions allege error by the trial court for refusing to grant
an instructed verdict.
In his first point of error, Homann asserts that the court should have granted his
motion for instructed verdict because the state failed to prove that he misapplied any trust money.
The State responds that Homann waived this point because his contention on appeal differs from
that urged in the trial court. We agree that Homann's motion for instructed verdict did not
specifically assert that the state failed to prove that he misapplied trust money. However, counsel
did orally cite Johnson v. State, 783 S.W.2d 19 (Tex. App. 1989, pet. ref'd) in support of his
motion. Johnson, which involved a defendant prosecuted under a similar statute, holds that the
state must prove each element of a similar misappropriation statute beyond a reasonable doubt.
Accordingly, we believe that Homann raised the issue of misapplication of funds with enough
specificity to avoid waiver, and we must analyze the legal sufficiency of the evidence. This test
requires this Court to view the evidence in the light most favorable to the verdict and determine
if any reasonable trier of fact could have found the essential elements of the alleged crime beyond
a reasonable doubt. Belyeu v. State, 791 S.W.2d 66, 68 (Tex. Crim. App. 1989), cert. denied,
111 S. Ct. 1337 (1990).
Homann contends that the jury based his conviction upon circumstantial evidence.
He further asserts that a judgment based on circumstantial evidence cannot be sustained if the
circumstances do not exclude every other reasonable hypothesis except that of the guilt of the
defendant. Gentry v. State, 770 S.W.2d 780, 798 (Tex. Crim. App. 1988), cert. denied, 490
U.S. 1102 (1989). Homann again relies upon Johnson. There the court overturned the conviction
because the State failed to demonstrate that the money was improperly retained, used, disbursed,
or diverted in a manner inconsistent with the contract. Johnson, 783 S.W.2d at 21. To overcome
this burden, the courts require the state to trace the application of the trust funds by the accused
in order to prove he used the funds to pay for expenses unrelated to the construction project at
issue. McElroy v. State, 720 S.W.2d 490, 494 (Tex. Crim. App. 1986).
Unlike Johnson, here the state provided substantial evidence demonstrating that
Homann made just such unrelated expenditures. (2) The circumstantial evidence test is met if "the
conclusion of guilt is warranted by the combined and cumulative force of all the evidence."
Ransom v. State, 789 S.W.2d 572, 577 (Tex. Crim. App. 1989). Finally, if any evidence exists
in the record which could be believed by the jury to support a verdict of guilty, an instructed
verdict would not be proper. Williams v. State, 680 S.W.2d 570, 575 (Tex. App. 1984), pet.
ref'd, 692 S.W.2d 100 (Tex. Crim. App. 1985). We overrule Homann's first point of error.
Homann's second point of error was clearly stated and preserved in his motion for
instructed verdict. Homann's counsel argued at trial and on appeal that the state failed to prove
that money spent by appellant was not spent on reasonable overhead expenses. To support this
position, Homann offers the test applied in the McElroy case requiring: 1) that with the intent to
defraud, the accused spent trust funds on other than labor and material for the contract; and 2) that
such funds were not spent on reasonable overhead of the contractor/trustee. McElroy, 667
S.W.2d at 861.
Again we are required to analyze the legal sufficiency of the evidence and again
we conclude the evidence is legally sufficient to support the jury finding. (see footnote 2). We
overrule Homann's second point of error.
2. Motion to Quash
Homann contends in his third point of error that the trial court incorrectly denied
his motion to quash the indictment. He asserts that the indictment failed to give notice and thus
failed to provide him an opportunity to adequately prepare his defense. We disagree. An
indictment that tracks the language of the appropriate statute is generally held sufficient. Daniels
v. State, 754 S.W.2d 214, 218 (Tex. Crim. App. 1988). Additionally, the State is not required
to plead non-essential evidentiary facts to provide notice to the accused. Id. This holding
corresponds with art. 21.19 of the Texas Code of Criminal Procedure stating "an indictment shall
not be held insufficient, nor shall the trial, judgment or other proceedings thereon be affected, by
reason of any defect of form which does not prejudice the substantial rights of the defendant."
Tex. Code Crim. Proc. Ann. art. 21.19 (1984). Finally, when the State grants informal discovery
of its file to the accused, as in this case, any notice defect is held to be harmless. See Klein v.
State, 737 S.W.2d 895, 898 (Tex. App. 1987, pet. ref'd).
Considering the manner in which the indictment tracked the statute and the
extensive discovered conducted by Homann, any error from lack of notice was at most harmless.
We overrule Homann's third point of error.
3. Jury Question
Homann's fourth complaint alleges that the trial court erred by not allowing him
to ask a vital, relevant and permissible jury question during voir dire. Counsel asked the
prospective jurors "if after the evidence has been heard the State has failed to convince you
individually beyond a reasonable doubt that all the elements have been proved, including the
element of intent to defraud, will you return a verdict of not-guilty?" This question, Homann
asserts, was necessary for his attorney to intelligently exercise his peremptory challenges.
The State initially argues waiver. We disagree. Once a defendant poses the
specific question he seeks to ask the venire and the judge refuses to allow the question, the ruling
by the trial court amounts to a direct order not to ask the question. Nunfio v. State, 808 S.W.2d
482, 484 (Tex. Crim. App. 1991). When an appellant obtains a specific ruling as to a specific
question, this properly preserves the issue for review. Id. In the present cause, counsel attempted
three times to ask the question to the jury and each attempt received a sustained objection. Under
these circumstances, Homann has preserved error.
The real issue is whether the trial court erred by disallowing the question. A
question that attempts to require the veniremen to commit themselves before trial as to how they
would consider testimony is an improper question. Harkey v. State, 785 S.W.2d 876, 878 (Tex.
App. 1990, no pet.). It is also "improper to inquire how a venireman would respond to particular
circumstances as presented in a hypothetical question." Allridge v. State, 762 S.W.2d 146, 164
(Tex. Crim. App. 1988) (citing Cuevas v. State, 742 S.W.2d 331, 336 n.6 (Tex. Crim. App.
1987)), cert. denied, 489 U.S. 1040 (1989).
This is exactly what occurred at trial. Counsel for Homann presented the potential
jurors with a hypothetical question based upon the particular facts of this case in an obvious
attempt to gain a commitment on that issue before they had heard the evidence. We conclude that
the trial court acted within its discretion by denying counsel the right to ask this improper
question. We overrule the fourth point of error.
4. Sufficiency
In his fifth point of error, Homann asks that this cause be reversed because the
evidence, when taken as a whole, was legally insufficient to establish intent to defraud.
The test for challenging the legal sufficiency of the evidence requires this Court to
view the evidence in the light most favorable to the verdict and determine if any reasonable trier
of fact could have found the essential elements beyond a reasonable doubt. Belyeu, 791 S.W.2d
at 68. The necessary intent to defraud may be established through direct or circumstantial
evidence. McElroy, 667 S.W.2d at 862. Additionally, the court may use the `exclusion of
reasonable hypothesis' test to analyze the sufficiency in circumstantial evidence cases. Ransom,
789 S.W.2d at 577 (citing Garrett v. State, 682 S.W.2d 301, 304 (Tex. Crim. App. 1984)). The
`exclusion' test requires the exclusion of every reasonable hypothesis raised by the evidence that
would tend to exculpate the accused. Id. The courts merely require, however, that "the
conclusion of guilt is warranted by the combined and cumulative force of all the evidence."
Ransom, 789 S.W.2d at 577; Brandley v. State, 691 S.W.2d 699, 703 (Tex. Crim. App. 1985).
We hold that the evidence is legally sufficient and that the only reasonable inference
that can be drawn points to Homann's guilty. Considering all the evidence entered by the State
specifically tracing Homann's misapplication of funds in violation of the statute, we find the State
has met its burden of proof. We overrule Homann's fifth point of error. (3)
CONCLUSION
We affirm the judgment of the trial court.
Jimmy Carroll, Chief Justice
[Before Chief Justice Carroll, Justices Aboussie and B. A. Smith]
Affirmed
Filed: July 1, 1992
[Do Not Publish]
1. Tex. Prop. Code Ann. § 162.031(a) (Supp. 1992) provides:
(a) A trustee who, intentionally or knowingly or with intent to defraud,
directly or indirectly retains, uses, disburses, or otherwise diverts trust
funds without first fully paying all obligations incurred by the trustee to
the beneficiaries of the trust funds has misapplied the trust funds.
2. The State introduced evidence that only $39,908.10 of the $56,025.14 drawn by Homann
could be linked to expenses for the Foster home. The state also entered direct evidence of two
specific `diversions'.
In the first diversion, the Ingram Readymix diversion, Homann incorrectly informed
Foster that Ingram had been paid for concrete, the falsity of which led to a lien on the Foster
home. Homann then showed Foster a business ledger indicating that check #1400 had been
used to pay Ingram. In fact, that check, written in the amount of $4,672.56, was issued to
Elgin Brick Company for bricks used upon Homann's own home.
The second diversion, the Wilson-Riggin diversion, involved Homann's issuance of a
check to Wilson-Riggin for $3,321.92 from a special account created solely for Foster house
expenses. The state presented evidence that Homann had a past due account with Wilson-Riggin for that exact amount, that the check was credited toward this debt and that Homann
altered the check, after it passed through the banking system, to denote a "Foster" expense.
The State introduced other direct evidence that demonstrated misapplication of the
funds in the Foster account by Homann in violation of the statute.
3. We recognize that the Court of Criminal Appeals no longer maintains a distinction
between the standard of review in direct evidence and circumstantial evidence cases. Geesa v.
State, 820 S.W.2d 154, 161 (Tex. Crim. App. 1991). That court held, however, that the
analytical construct rule was not to be applied retroactively, opting instead for "limited
prospectivity." Geesa, 820 S.W.2d at 164. As such, the "reasonable hypothesis of innocence
analytical construct" is still the proper standard of review for sufficiency of the evidence in
this case. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1537413/ | 27 B.R. 130 (1983)
In re Earl Lee TERRELL, Debtor.
Lois HOLLAND and J. Richard Horvath, Plaintiffs,
v.
FIRST FEDERAL SAVINGS AND LOAN OF ALLEN PARISH; Bureau of Credit Control of Alexandria, Inc.; Wholesale Supply, Inc.; Ashy Enterprises, Inc.; Port Barry Lumber Industries, Inc.; Southern Pipe and Supply Co., Inc.; George H. Lehleitner and Co., Inc.; L.D. Brinkman and Co., Inc.; United States of America, Department of Treasury, Defendants.
Bankruptcy No. 480-00579-LC, Adv. No. 482-0142.
United States Bankruptcy Court, W.D. Louisiana.
February 9, 1983.
*131 Ronald J. Bertrand, Lake Charles, La., for plaintiff Lois Holland.
Perrell Fuselier, Oakdale, La., for plaintiff Richard Horvath.
Leven H. Harris, Asst. U.S. Atty., Shreveport, La., Steven Gremminger, Atty., Tax Div., Dept. of Justice, Washington, D.C., for U.S. of America, Dept. of Treasury.
Findings of Fact and Conclusions of Law
RODNEY BERNARD, Jr., Bankruptcy Judge.
A hearing was held December 9, 1982 on the Joint Application of Trustee and Secured Creditor to Sell Collateral and Complaint Against All Inferior Lienholders pursuant to Section 363(f) of the Bankruptcy Code. The proposed sale involves property which is part of the estate of the above-captioned Chapter 7 debtor. The United States is the only defendant that filed an answer to the complaint.
The United States' position concerning the proposed sale of collateral free and clear of interests is that it has no objection to the sale as proposed, provided: (1) that the federal tax lien is transferred to the proceeds of sale in its lawful order; (2) that the federal tax lien is discharged from this particular property only, rather than being cancelled in its entirety; and (3) that the court's order authorizing sale reserves in favor of the United States a right of redemption pursuant to 28 U.S.C. § 2410(c). Plaintiffs have no objection to the United States' first two of the above-listed conditions to the proposed sale. They do, however, oppose the United States' request for a reservation of right to redeem.
Based on well-settled rules of law, the court agrees with the United States' contention and concludes that, upon sale of the collateral free and clear of interests, the federal tax lien should be transferred to the proceeds of sale in its lawful order. The court further agrees and concludes that the federal tax lien should be discharged from this particular property only, rather than being cancelled in its entirety.
On the other hand, this court is of the opinion that a right to redeem the sale should not be reserved in favor of the United States. This determination is based upon the court's discretion under the Bankruptcy Code to "issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title". 11 U.S.C. § 105(a).
The court has come to this conclusion as a matter of policy after considering a number of factors. First, the price to be paid by the proposed purchaser is equal to the appraised value of the property plus filing fees and court costs. Thus, this is not a situation in which the purchaser will be receiving a windfall. Second, the trustee has attempted to sell the property more advantageously but without success. Finally, the trustee gave notice to the United States and others of the proposed sale and opportunity to submit a higher bid. No higher bids were submitted.
If this court were to authorize the sale of this property but subject it to a right of the United States to redeem pursuant to 28 U.S.C. § 2410(c), the sound administration of the bankruptcy estate would be prejudiced. A trustee's duties with regard to a case under Chapter 7 are enumerated in Section 704 of the Bankruptcy Code. 11 U.S.C. § 704. One of these duties is to "collect and reduce to money the property of the estate ... and close up such estate as expeditiously as is compatible with the *132 best interests of parties in interest". 11 U.S.C. § 704(1) (emphasis supplied).
As a representative of the creditors of a bankruptcy estate, a trustee is under a duty to liquidate property of the estate expeditiously but at the highest price that can be obtained. Any cloud on title diminishes the value of property. If a trustee is unable to deliver title free and clear of all interests when liquidating property of the estate, many difficulties and delays in finding a purchaser willing to pay a fair price for property of a bankruptcy estate will result. This certainly must have been a prime consideration in the promulgation of Rule 805 of the Rules of Bankruptcy Procedure which reads, in part, as follows:
Unless an order approving a sale of property ...... is stayed pending appeal, the sale to a good faith purchaser ...... shall not be affected by the reversal or modification of such order on appeal, whether or not the purchaser .... knows of the pendency of the appeal.
As the above discussion indicates, a conflict between two federal statutes arises when a reservation of the right to redeem under 28 U.S.C. § 2410(c) is sought pursuant to a sale free and clear of all liens under Section 363(f) of the Bankruptcy Code. Since the United States received notice of the proposed sale and opportunity to submit a higher bid for the property, this conflict should be resolved in favor of the plaintiffs. As a matter of policy, the Bankruptcy Code and its purposes should control in this dispute. This court shall issue a judgment authorizing the sale of property free and clear of all interests, including the United States' right to redeem. Such a judgment is necessary and appropriate to carry out the provisions of this title. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537417/ | 27 B.R. 304 (1983)
In re BOB SCHWERMER & ASSOCIATES, INC., Robert A. Schwermer and Clara Mae Schwermer, Debtors.
Bankruptcy Nos. 82 B 5901, 82 B 5893.
United States Bankruptcy Court, N.D. Illinois, E.D.
January 25, 1983.
*305 Marcy Newman, Newman & Stahl, Chicago, Ill., for First Bank of Evanston.
Bryan Krakauer, Sidley & Austin, Chicago, Ill., for FDIC.
Ronald Peterson, Jenner & Block, Chicago, Ill., for Creditors' Committee.
MEMORANDUM, OPINION AND ORDER
EDWARD B. TOLES, Bankruptcy Judge.
This matter coming on to be heard upon the application for leave to sell race horses filed by the Debtors, BOB SCHWERMER & ASSOCIATES, INC., ROBERT A. SCHWERMER AND CLARA MAE SCHWERMER, [Debtors] represented by DAVID N. MISSNER, Attorney at Law, and the objections thereto of the FEDERAL DEPOSIT INSURANCE CORPORATION. (F.D.I.C.), represented by BRYAN KRAKAUER, Attorney at Law, and the Unsecured Creditors' Committee (Creditors), represented by RONALD R. PETERSON, Attorney at Law, and
The Court having examined the pleadings filed in this matter, having received and examined memoranda of law submitted by parties in support of their respective positions, having heard the arguments of counsel, and the Court being fully advised in the premises.
The Court Finds:
1. On May 5, 1982, the Debtors filed voluntary petitions for arrangements under Chapter 11 of the Bankruptcy Code. Prior to the initiation of these proceedings, ROBERT A. SCHWERMER, owned six thoroughbred race horses known as:
*306 ESPY,
SILVER ACT,
MARBO,
MY BOY BILL,
BOB'S MAJESTY and DIAMOND DUCHESS
ROBERT A. SCHWERMER, granted to the FIRST NATIONAL BANK AND TRUST COMPANY OF EVANSTON (Bank) represented by NEWMAN & STAHL a security interest in and to said horses as evidenced by various security documents. Said horses served as collateral for certain loans from the Bank. As of the date of filing of the instant proceedings the sum of $842,134.66 was due the Bank. In addition to the horses, the Bank also holds a security interest in and to certain machinery and equipment of BOB SCHWERMER & ASSOCIATES, INC. As of October 27, 1982, the Bank's total claim against ROBERT A. SCHWERMER and BOB SCHWERMER & ASSOCIATES, INC. is the sum of $892,662.73.
2. On November 9, 1982, the Debtors filed the instant application to sell the above described horses to the Bank for the sum of $600,000. In said application it was asserted that on the date of filing of the Chapter 11 proceedings the horses had a fair market value of between $150,000 and $400,000, and that in order for the horses to retain that value they require training, exercise, feed, shots and must be raced. The Debtors state in their application that under their present financial circumstances proper care can not be given the horses. The Debtors state in their application that the Bank has offered to take possession of the horses and credit the indebtedness of the Debtors in the amount of $600,000.00, and that the Bank has offered to retain its lien against the machinery and equipment of the Debtors to the extent of only $200,000. On this basis the Debtors state in their application that if the Bank receives from the sale of the horses sums in excess of the $200,000, the balance would be distributed among the unsecured creditors.
3. On November 29, 1982 the Bank filed a stipulation of facts to which no party in interest has objected and which provides in relevant part as follows:
1. On April 21, 1980, a $700,000.00 Demand Collateral Promissory Note in favor of the First National Bank and Trust Company of Evanston ("FirstBank Evanston") was executed by Schwermer entities and guaranteed by other Schwermer entities and personally guaranteed by Robert A. and Clara Mae Schwermer, in accordance with Guaranty Agreements dated April 21, 1980.
2. On August 20, 1980, a replacement Demand Collateral Promissory Note in the amount of $1,250,000.00 in favor of FirstBank was executed, repayment thereof still being guaranteed by Robert A. Schwermer, pursuant to Guaranty Agreement dated April 21, 1980.
3. On May 21, 1981, additional financing and other accommodations were arranged for Robert A. Schwermer personally as well as Schwermer entities, by FirstBank Evanston.
4. On June 12, 1981, in order to take additional security regarding the financing for Robert A. Schwermer and Robert A. Schwermer entities, in connection with the outstanding notes and commitment of FirstBank Evanston a Security Agreement was executed by Robert A. Schwermer in favor of FirstBank Evanston. Said Security Agreement grants FirstBank Evanston a security interest in eight thoroughbred race horses, six of which are listed as assets of Robert A. Schwermer's pending bankruptcy action and still owned by Robert A. Schwermer. A copy of the executed Security Agreement was attached to each of the original six Foal papers for each horse, and said six Foal papers were delivered to FirstBank Evanston.
5. On June 30, 1981, a Tri-Party Escrow Agency Agreement was executed by and between FirstBank Evanston, Robert A. Schwermer and James Burchell, the trainer of the horses. In order for a thoroughbred horse to be allowed to race *307 at a given race track, Foal papers must be at the track on the day of the race. Therefore, Foal papers were delivered to James Burchell, the trainer, subject to his agreement to return, after each race, said Foal papers to FirstBank Evanston.
6. On July 9, 1981, a copy of the Tri-Party Escrow Agreement was sent to the Horsemen's Bookkeeper at Arlington Race Track, Arlington Heights, Illinois (the location of the races for said horses) and was acknowledged by said office on July 20, 1981.
7. On July 30, 1981, a letter from counsel representing FirstBank Evanston was transmitted to The Jockey Club of New York which is the "Office of the Registrar" for the "American Stud Book" for all thoroughbred racing horses. The Jockey Club acknowledged the security interest of the FirstBank Evanston by letter dated August 14, 1981 and reflected said security interest on the duplicate Foal certificate records of The Jockey Club books.
8. On July 31, 1981, duplicate copies of the executed Security Agreement, as well as financing statements, were filed under the provisions of the Illinois Uniform Commercial Code with the Illinois Secretary of State, as Document No. 1565648.
9. On August 12, 1981, FirstBank Evanston was added as a loss payee to the Livestock Transportation and Mortality Policy issued by the Central National Insurance Company of Omaha, Nebraska, Policy No. 1CN2441788, insuring all of the horses.
11. On June 17, 1982, FirstBank Evanston continued its insurance coverage on the horses, and a new insurance certificate was issued at the expense of FirstBank Evanston.
12. On September 22, 1982, The Jockey Club reacknowledged FirstBank Evanston's interest and indicated that to date, no duplicate certificates have been applied for on any of the referenced thoroughbred racing horses.
13. On October 1, 1982, after the last racing date at Arlington Race Track, which was September 30, 1982, the race horses were transported to the Keenland Race Track, Keenland, Kentucky.
The Court Concludes and Further Finds:
1. The Creditors and F.D.I.C. have both objected to the above described sale and allege that said sale is designed to hide defects in the Bank's security interest. Specifically, the alleged defects in the Bank's security interest are as follows:
1. The horses fall within the UCC definition of farm products or consumer goods, and therefore the financing statement must have been filed with the Recorder of Deeds for the County of the debtor's residence pursuant to Section 9-401(1)(a) of the Illinois Commercial Code.
2. Because the horses at various times were moved out of Illinois to Arkansas and Florida, the Bank was obligated to refile its financing statement in each state after four months, pursuant to Sec. 9-103(1)(d)(i) of the Uniform Commercial Code.
3. The Bank's security interest is not valid because the description of the collateral was not sufficient within the purview and meaning of Sec. 9-402(1) of the Illinois Commercial Code, and contains errors with reference to the Debtor's name and address.
4. Assuming that the security interest was validly perfected in Illinois in July of 1981, the interest became void four months after the horses were moved to Arkansas and Florida, and any reperfection of the security interest would fall within 90 days of the Debtor's Chapter 11 filing and would constitute a voidable preference within the purview and meaning of Section 547 of the Bankruptcy Code.
5. Assuming that the security interest was valid, the loans subsequent to the execution of the note in 1980, pursuant to a letter of commitment of the Bank dated May 21, 1981, may constitute a fraudulent conveyance one year prior to the filing of the Chapter 11, within the purview *308 and meaning of Section 548 of the Bankruptcy Code.
2. In order for a security interest to attach to collateral, pursuant to Sec. 9-203 of the Illinois Commercial Code, there must be an agreement, value and collateral. In the instant case the Debtors who owned the horses executed the subject security agreement on June 12, 1981. Said agreement was executed in exchange for a commitment from the Bank to forbear collection of pre-existing debt. On July 31, 1981, the Bank filed a financing statement with the Illinois Secretary of State, as Document No. 1565648. Provisions of Section 9-401(1) of the UCC requiring filing with the County Recorder of Deeds in the county of the Debtor's residence is only applicable where farm products are involved or where the goods are purchased for the debtor's personal use. Security interests in equipment are perfected by filing of the financing statement with the Secretary of State pursuant to Section 9-401(1)(c) of the Illinois Commercial Code. Under Section 9-109(2) of the UCC equipment is defined as goods which are, "used or bought for use primarily in business (including farming or a profession)." In the instant case, the Debtor has submitted an affidavit in which it is stated that the horses were purchased for business purposes, as race horses. In said affidavit it is stated that the Debtor does not farm or breed horses. In cases where live stock is owned by persons not engaged in farming the animals are not considered farm products. Swift & Co. v. Jamestown National Bank, 7 UCC Rep.Serv. 788 (8th Cir.1970); Security National Bank v. Belleville Livestock Commission Co., 26 UCC Rep. Serv. 528 (10th Cir.1979), Cookeville Production Credit Association v. Frazier, 33 UCC Rep.Serv. 1150, 16 B.R. 674 (U.S.Bkrtcy.M. D.Tenn.1981); Mountain Credit v. Michigan Lumber & Supply, Inc., 10 UCC Rep.Serv. 1347, 31 Colo.App. 112, 498 P.2d 967 (Colo.C. A.1972); In re Collins, 28 UCC Rep.Serv. 1520, 3 B.R. 144 (U.S.Bkrtcy.S.C.1980); First State Bank v. Maxfield, 485 F.2d 71 (10th Cir.1973). On the basis of clear statutory language, case law and the facts of this case it must be concluded that the horses are equipment, and thus the Bank's security interest was duly perfected by the filing of a financing statement with the Illinois Secretary of State.
3. Pursuant to Section 9-403(2) of the Illinois Commercial Code a security interest remains perfected for a period of five years from the date of filing of the financing statement. However, the F.D.I.C. and Creditors argue that because at various times the horses were transported to Florida and Arkansas that the security interest had to be reperfected in Florida and Arkansas four months after the horses were moved from Illinois, pursuant to Section 9-103 of the UCC. This Court must reject this argument and conclude that the perfection of the security interest in Illinois remains valid. No intervening security interests on behalf of the Creditors' Committee or any other party attached while the horses were in other jurisdictions, and the horses were in the State of Illinois prior to the filing of the instant Chapter 11 proceeding. The purpose of Section 9-103 of the Illinois Commercial Code is to settle disputes between two parties from different states who both claim a security interest in the chattel, and it should not be applicable where no intervening security interest exists. See 68 Michigan Law Review 684 (1970).
4. Pursuant to Section 9-402(1) of the Illinois Commercial Code the requisites for a financing statement are as follows:
(1) A financing statement is sufficient if it gives the names of the debtor and the secured party, is signed by the debtor, gives an address of the secured party from which information concerning the security interest may be obtained, gives a mailing address of the debtor and contains a statement indicating the types, or describing the items, of collateral . . . A copy of the security agreement is sufficient as a financing statement if it contains *309 the above information and is signed by the debtor. . . .
Pursuant to Section 9-402(8) of the Illinois Commercial Code Statutes errors in filing the financing statement are treated as follows:
A financing statement substantially complying with the requirements of this Section is effective even though it contains minor errors which are not seriously misleading.
In the official comments to Section 9-402(8) of the Illinois Commercial Code it is stated:
Subsection (8) is in line with the policy of this Article to simplify formal requisites and filing requirements and is designed to discourage the fanatical and impossibly refined reading of such statutory requirements in which courts have occasionally indulged themselves. . . .
Ill.Rev.State. Chap. 26 Sec. 9-402 p. 288
Section 9-402 and the sufficiency of the description of collateral additionally must be viewed in conjunction with Section 9-110, which provides as follows:
For the purposes of this Article any description of personal property or real estate is sufficient whether or not it is specific if it reasonably identifies what is described.
Various courts have recognized that pursuant to the above detailed filing provisions termed "notice filing", the financing statement is not intended to enable other creditors to learn the "true nature" of the secured transaction. The purpose of the notice provision is merely to apprise other creditors that others may have a security interest in the subject collateral and that creditors should resort to the security agreement for further information. In re Cushman Bakery, 526 F.2d 23 (1st Cir.1975) cert. denied Agger v. Seabroad Allied Milling Corp. 425 U.S. 937, 96 S.Ct. 1670, 48 L.Ed.2d 178 (1976). In re Malzac, 14 UCC Reporting Service 1223 (D.V.T.1974). In re Moore, 34 UCC Reporting Service 773, 777, 21 B.R. 898 (Bkrtcy.E.D.Tenn.1982). First National Bank of St. Charles v. Chemical Products, Inc., 34 UCC Reporting Service 300 (Missouri Ct.App., E.D.1982).
In the instant case the Creditors filed a financing statement and a copy of the security agreement. Said financing statement merely contains the Debtor's and Creditor's name and address, and the notation "16" for collateral. However, the security agreement attached to and filed with the financing statement contains in relevant part the following information:
Tamarock's Rule Espy
Bruce South Marbo
My Boy Bill Bob's Majesty
Silver Act Diamond Dutchess
Property[*]
In view of the purpose of a financing statement and the liberal filing provisions of the Illinois Commercial Code it must be concluded that the financing statement and security agreement are sufficient to establish a perfected security interest within the purview and meaning of Sections 9-402 and 9-110 of the Illinois Commercial Code;
5. Pursuant to Section 547(b) of the Bankruptcy Code transfers to creditors may be avoided by a debtor or trustee in relevant part as follows:
(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 antecedant 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; . . .
In the instant case the Court must conclude that the granting of a security interest on July 31, 1981, can not constitute a voidable preference because the transfers occurred more than 90 days prior to the date the petition was filed on May 5, 1982. The Court has already rejected arguments *310 that the security interest lapsed upon transportation of the horses to Arkansas and Florida. On this basis it could not be claimed that the interest to remain valid must be reperfected in Illinois upon return of the horses to this state within the 90 day period prior to filing of the Chapter 11.
6. Pursuant to Section 548 of the Bankruptcy Code the trustee or debtor-in-possession may avoid any transfers of the debtor's property or any obligations incurred one year before the filing of the bankruptcy petition if the debtor:
(1) made such transfer or incurred such obligation with actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that such transfer occurred or such obligation was incurred, indebted; or
(2)(A) received less than a reasonably equivalent value in exchange for such transfer or obligation; and
(B)(i) was insolvent on the date that such transfer was made or such obligation was incurred, or become insolvent as a result of such transfer or obligation;
. . . . .
In the instant proceeding the F.D.I.C. has alleged that the Letter of Reinstatement and Restructure of Debt prepared by the Bank on May 21, 1981, in addition to the security agreement executed on June 16, 1981, all occurring within one year from the date of filing, indicate that the security interest taken by the Bank may constitute a fraudulent transfer within the purview and meaning of Section 548 of the Bankruptcy Code. The F.D.I.C. argues that despite the fact that the original loans were made in 1980, two years prior to filing, the forbearance in collection of the indebtedness by the Bank in exchange for a security interest in the horses executed on June 16, 1981, constitutes an obligation incurred one year prior to bankruptcy. This Court is persuaded by appellate authority cited by the FDIC, Rubin v. Manufacturers Hanover Trust Co., 661 F.2d 979 (2nd Cir.1981). In that case it was held that although credit lines and security agreements were executed prior to the one year period specified under Section 548 of the Bankruptcy Code, affiliates of the debtor corporation had drawn on the line of credit within the one year period. I.D. at 989. In Rubin the Second Circuit Court of Appeals remanded the proceeding to the Bankruptcy Court for further hearings on the issues of consideration and debtor's insolvency at the time of the transfers Id. at 991-996.
This Court too must conclude that the threshold issue of a transfer one year prior to bankruptcy has been established sufficiently to warrant a hearing on the issues of consideration and insolvency under Section 548(a)(2) of the Bankruptcy Code. The F.D.I.C. or Creditors Committee has not alleged any actual intent on the part of the debtor to hinder or defraud creditors.
Because the application of the Debtors to sell the horses has pended since November 9, 1982, due to the numerous objections of the F.D.I.C. and Creditors' Committee, and the horses will decrease in value as time passes, the hearing should be held at the earliest possible date for a final determination of ownership of the horses.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that all discovery be completed by February 11, 1983, and any additional pleadings be filed by February 11, 1983, and a final hearing on the application to sell horses, pursuant to Section 548(a)(2), be, and the same is hereby set for February 15, 1983, at 2:00 P.M.
NOTES
[*] Is evidenced by various foal certificates presently
on file with officials at Arlington Heights Race
Track, A. Hts, ILL. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537310/ | 27 B.R. 442 (1983)
In re Robert Miller CORBETT, Debtor.
In re Leo and Patsy WHEELER, Debtor.
In re Jimmie Earl WOODS and Ruth Yvonne Woods, Debtors.
In re Thelma Chatman EASON, Debtor.
In re David Garland LAMB, Jr. and Dorothy Jean Lamb, Debtors.
In re Earl Eugene WEAVER, Debtor.
In re Jessie Mae WILLIAMS, Debtor.
In re James Edward WILLIAMS and Delphine M. Williams, Debtors.
Bankruptcy Nos. 81-01504-13, 81-01618-13, 81-03238-13, 80-03215-13, 80-03246-13, 80-03584-13, 80-02435-13 and 81-02298-13.
United States Bankruptcy Court, W.D. Missouri.
February 8, 1983.
Maurce B. Soltz, Ronald S. Weiss, John R. Stonitsch, Kansas City, Mo., for debtors.
MEMORANDUM OPINION AND ORDER
JOEL PELOFSKY, Bankruptcy Judge.
In these Chapter 13 cases debtors have objected to claims filed more than six months after the § 341 meeting. It has *443 been the practice in this district to allow such claims and pay them as deferred, which is after payment of all claims, secured and unsecured, timely filed. Even though scheduled, no creditors are paid in a Chapter 13 case unless they file claims. The confirmability of a plan on the other hand is determined by an analysis based upon the amount of payment to all creditors without regard to whether a claim is filed. Debts to all scheduled creditors, with two narrow exceptions, are discharged when the plan is completed without regard to whether a creditor actually receives payments. Section 1328 of the Code.
There is no provision in Chapter 13 regulating the manner in which pre-petition creditors must file claims. Section 501 of the Code, which applies to all chapters, provides that creditors, debtors or trustees may file claims. No time limit for the filing of claims is contained in Section 501.
Where the statute is silent, the Court may look to the Rules of Bankruptcy Procedure to determine applicable procedures. Rule 13-302(e)(2) provides as follows:
"Unsecured claims, whether or not listed in the Chapter XIII Statement, must be filed within 6 months after the first date set for the first meeting of creditors in the Chapter XIII case . . . "
The exceptions are not pertinent. Rule 302(e), Rules of Bankruptcy Procedure, sets the same six month limit generally to the filing of claims.
The rules are written in mandatory language and the Courts have interpreted them in that fashion.
"The sixth month filing period limitation is mandatory and may not be extended by this court." In re Evanston Motor Co., Inc., 20 B.R. 550, 551 (Bkrtcy.N.D.Ill. 1982).
"Since the six month filing requirement is a mandatory and nondiscretionary statute of limitations, . . . [the] late claim may not be allowed." In re Tavares, 23 B.R. 129, 130 (Bkrtcy.R.I.1982).
See also In re Alsted Automotive Warehouse, Inc., 16 B.R. 924 (Bkrtcy.E.D.N.Y. 1982), In re Granite Apparel, Inc., 14 B.R. 171 (Bkrtcy.R.I.1981) and Matter of Brown, 14 B.R. 233 (Bkrtcy.N.D.Ill.1981). Rule 906(b) of the Rules of Bankruptcy Procedure limits the manner in which extensions of time to file claims may be granted. No extension of time to file claims is allowed the routine creditor unless assets are discovered or there is a surplus. But see In re Humblewit Farms, Inc., 23 B.R. 703, 7 C.B.C.2d 495 (Bkrtcy.S.D.Ill.1982). Where assets are discovered or there is a surplus creditors, including those who had not filed claims before, are invited to file claims. Rules 302(e)(4) and 302(e)(5).
Rule 302(e)(5) provides that, "If all claims allowed have been paid in full, the court may grant a reasonable, fixed extension of time for the filing of claims not filed within the time hereinabove prescribed against any remaining surplus." The purpose of the rule is to avoid the inequity of returning property to the bankrupt before the payment to creditors. Wolverton v. Shell Oil Company, 442 F.2d 666 (9th Cir.1971).
In Chapter XIII cases under the Bankruptcy Act, debts for real property or chattels real could not be included in the plan. Section 606 of the Act, Section 1006, Title 11, U.S.C. In addition creditors were entitled to reject a plan upon timely filing of an objection. Rule 13-202(a), Rules of Bankruptcy Procedure. If there were sufficient rejections the plan could not be confirmed. Sections 651 and 652 of the Act, Sections 1051 and 1052, Title 11, U.S.C., Section 666 of the Act, Section 1066, Title 11, U.S.C.
These matters are changed in the Bankruptcy Code. The plan now deals with all debts and creditors no longer vote to accept or reject the plan. The plan is to be confirmed if it meets all the statutory requirements of Section 1325 of the Code, without regard to acceptance or rejection by creditors. The plan may modify and compromise the treatment of debt with some exceptions and may provide for the discharge of otherwise nondischargeable debts without payment in full except for alimony or child support. Section 1322 of the Code. A plan is often confirmed before creditors have filed claims.
*444 While the early filing of claims was important to confirmation under the Bankruptcy Act, enabling the court to determine whether a plan is confirmable and should be confirmed, it is of no particular significance now. The plan may be confirmed even if no claims have been filed. Confirmation now depends upon the analysis of plan provisions in light of statutory standards and the projected ability of the debtor to fund the plan.
Since the plan proposes payments to all creditors and is confirmed on that proposition, it no longer makes sense to deny a creditor payment simply because the claim is filed out of time. Payment to such a creditor is not an unconsidered notion. In addition to those portions of Rule 302 which contemplates such payments, Section 726 creates several exceptions to the requirement of timely filing. See also Section 501 of the Code which allows debtors and trustees to file claims if the creditor does not.
Assuming the creditor does not make a timely filing, the trustee could file for him. This creates administrative problems for the trustee. It creates problems for the debtor in that the trustee's claim will be based upon the schedules which may not be accurate. It is far better to allow a late filed claim which is accurate and which does not impose an additional administrative burden on the trustee to file timely claims.
A scheduled debt, whether or not actually paid, is discharged in a Chapter 13 case when the payments are completed, with exceptions not controlling here. Section 1328 of the Code. If claims are not filed, payments under the plan are completed earlier than projected. A late filed claim may be paid and the plan still be completed within a lawful time period because the plan is developed and confirmed upon the proposition that all creditors will be paid certain amounts under the plan. There is thus no prejudice to the debtor.
There is, however, prejudice to the creditor if the late claim is not allowed. After all, the creditor did advance funds, perform services, or sell goods to the debtor on the assumption that he would be paid. In his Chapter 13 plan the debtor does propose some payment to all creditors. There is no policy reason why such payments should not be made. It might be different if the case were closed before the claims were made because of the added weight which must be given to considerations of efficient administration. But here the claims were made while the case was still open.
It is interesting to note that the proposed bankruptcy rules do not deal with claims against a surplus in a Chapter 13 case. Rule 3002(c)(6). The advisory committee note says that in "Chapter 13 cases, the plan itself provides the distribution to creditors . . ." The rule is otherwise similar to the present scheme and is couched in mandatory language. It is apparent that the rule does not deal with the problem before this Court.
Section 405(d) of the Code provides that the Rules apply to cases under the Code "to the extent not inconsistent with the amendments made by this Act, or with this Act . . ." The Court concludes that the mandatory time requirements for the filing of claims, as such requirements apply to Chapter 13 cases, are not consistent with the Code and should not be considered as controlling. The Court recognizes the violence done to the plain language of the statutes and rules but concludes that the policy of payment to creditors implicit in Chapter 13 cases is of overriding importance. A Chapter 13 case offers the only effective way in which the average debtor can pay creditors out of future earnings. It is a process which closely reflects the realities of extensions of credit, which are based in part upon the future ability of the borrower to repay. See 5 Collier on Bankruptcy ¶ 1300.01 (15th Ed.).
The Court holds that an unsecured claim which is not timely filed but which is filed before the case is closed may be allowed, absent a showing of prejudice on the part of debtor. The objection to the late filed claim in each of these cases is OVERRULED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537313/ | 797 A.2d 943 (2002)
Cynthia JOHNSON, Appellant,
v.
John MARTOFEL, Appellee.
Superior Court of Pennsylvania.
Argued February 6, 2002.
Filed March 21, 2002.
Reargument Denied May 29, 2002.
*944 Peter M. Suwak, Washington, for appellant. Gary J. Frankhouser, Uniontown, for appellee.
Before: DEL SOLE, P.J., BENDER and TAMILIA, JJ.
BENDER, J.
¶ 1 Cynthia Johnson (Appellant) appeals from the trial court's order denying her motion to stay or set aside a writ of possession for real property on which she resided. The trial court found itself without sufficient time to consider the motion prior to the sheriff's execution of the writ and, therefore, it did not rule on the motion until after execution of the writ. Consequently, the court found that the issue was moot and, furthermore, that the property's owner, John Martofel (Appellee), was entitled to the writ of possession. Johnson claims that the trial court erred in so determining. For the reasons that follow, we affirm.
¶ 2 The property at issue in this case is located at 532 Third Street, No. 2, Luzerne Township, Fayette County ("the Property"). Appellant resided at the Property for several years and was its reputed owner until Appellee purchased it at a tax sale on October 14, 1998. On January 1, 1999, Appellee and Appellant entered into a month-to-month lease agreement pursuant to which Appellant would pay Appellee $200 per month as rent. This agreement continued for approximately six months. However, on June 7, 1999, Appellee gave Appellant thirty days' notice to vacate the Property. Appellant refused to vacate the Property, and on August 2, 1999, Appellee filed a landlord-tenant action for possession of the Property before District Justice Herbert Mitchell. On August 18, 1999, District Justice Mitchell entered judgment for possession on behalf of Appellee and in the amount of $400 for the rent in arrears.
*945 ¶ 3 On August 25, 1999, Appellant filed a notice of appeal from the judgment of possession and a praecipe for a rule to file a complaint in the Court of Common Pleas. The appeal was docketed at No. 1768 of 1999, G.D., and is the underlying action in the instant appeal before this Court. Appellant deposited a bond of $400 into court for the amount of the judgment, which effectively perfected a supersedeas on the judgment of possession. See Pa. R.C.P.D.J. 1008(B). Appellee filed a complaint on September 30, 1999, but Appellant did not file an answer until February 7, 2000. On February 7, 2000, Appellant also filed Objections and/or Exceptions to Tax Sale or Alternatively, Petition to File Objections and/or Exceptions Nunc Pro Tunc at docket No. 2093 of 1998, G.D., requesting the Court of Common Pleas to issue a rule to show cause why the court should not sustain and/or grant Appellant's exceptions and/or objections nunc pro tunc to the tax sale wherein Appellee had purchased the Property. On March 9, 2000, the Honorable Gerald R. Solomon entered an order scheduling a hearing for April 12, 2000 to determine whether Appellant should be permitted to file the exceptions to the tax sale. The order also stayed all proceedings in the underlying eviction action at No. 1768 of 1999, G.D.
¶ 4 At the April 12th hearing, counsel for both Appellant and Appellee appeared before Judge Solomon and entered into an agreement by which Appellee gave Appellant 90 days to locate a buyer for the Property or to purchase it herself for $15,000. In exchange, Appellant agreed to withdraw her exceptions to the tax sale, and in the event that she could not secure a buyer for the Property or purchase it herself for $15,000 within the 90 days, she would vacate the Property and execute a quit claim deed in favor of Appellee. Judge Solomon directed the agreement to be reduced to a transcript and made part of the record.
¶ 5 As the foregoing agreement was entered into on April 12, 2000, the 90 days expired on or about July 12, 2000. Months passed after the expiration of the deadline, and Appellant failed to comply with the terms of the agreement, i.e., she failed to locate a buyer or purchase the Property herself, and she did not execute a quit claim deed and vacate the Property. Consequently, on November 6, 2000, Appellee filed a Motion for Contempt and/or Enforcement of Agreement requesting a court order that would compel Appellant to comply with the terms of their April 12th agreement. Judge Solomon scheduled a hearing on the motion for December 22, 2000. Following the hearing, Judge Solomon entered an order that states the following:
AND NOW, this 22nd day of December, 2000, after hearing, it is hereby ORDERED and DIRECTED that the Defendant, Cynthia Johnson, shall, on or before January 31, 2001, pay to the Plaintiff, John Martofel, the sum of Fifteen Thousand ($15,000) Dollars in full consideration for the subject premises or, execute a quit claim deed to John Martofel and vacate the premises. Failure to comply with the terms of this Order may result in a contempt hearing before this Court.
Order, 12/22/00. January 31, 2001 arrived, and Appellant had not yet complied with the terms of the foregoing order. On January 31st, Appellant attempted to extend the deadline by filing a Motion to Extend Court Ordered Time Limit. On February 8, 2001, Judge Solomon denied the motion.
¶ 6 On March 30, 2001, Appellant not yet having tendered $15,000 or any commitment to purchase the Property, and further having failed to vacate the Property and execute a quit claim deed, Appellee *946 praeciped for a writ of possession. The prothonotary issued the writ, and the sheriff was to execute the writ at 10 a.m. on May 7, 2001. At 9:15 a.m. on the day the writ was to be executed, Appellant presented an Emergency Motion to Stay Execution of Writ of Possession and/or Set Aside Writ of Possession. Judge Solomon determined that he did not have sufficient time to consider the motion prior to the sheriff executing the writ, as he was presiding over a criminal trial that began at 9:30 a.m., and the sheriff was to execute the writ at 10 a.m. Consequently, the court did not issue a stay, and the sheriff executed the writ. On May 9, 2001, Judge Solomon denied the motion as moot. Appellant appeals from the May 9th order and presents two questions for our review:
I. Whether the lower court committed an error of law in refusing to stay execution of a Writ of Possession where no valid underlying judgment for possession had been entered?
II. Whether the lower court committed an error of law in refusing to stay execution on a Writ of Possession by declaring the same as moot when the motion had been presented to the Court prior to actual execution and when possession may be returned to the appellant if invalidly entered?
Brief for Appellant at 4. For purposes of clarity, we shall first address the mootness issue raised in Appellant's second question and next address the issue raised in Appellant's first question.
¶ 7 Appellant argues that the trial "court erred in declaring this continuing controversy to be moot." Brief for Appellant at 13. Appellant's motion contained two prayers for relief. The motion requested that the court either set aside the writ of possession or, in the alternative, stay the sheriff's execution of the writ. The question before us is whether the sheriff's execution of the writ prior to the trial court ruling on the foregoing motion rendered it moot.[1]
¶ 8 "As a general rule an actual case or controversy must exist at all stages of the judicial process, and a case once `actual' may become moot because of a change of facts." In re Estate of Dorone, 349 Pa.Super. 59, 502 A.2d 1271, 1274 (1985). "The appellate courts of this Commonwealth will not decide moot or abstract questions except in rare instances when the question presented is one of great public importance, or when the question presented is capable of repetition yet escaping judicial review." Graziano Constr. Co. v. Lee, 298 Pa.Super. 311, 444 A.2d 1190, 1193 (1982) (citations omitted). An issue before a court is moot if in ruling upon the issue the court cannot enter an order that has any legal force or effect. Cf. Pennsylvania Coal Mining Ass'n v. Commonwealth Dep't of Envtl. Resources, 498 Pa. 1, 444 A.2d 637, 638 (1982) (stating that "[n]o purpose is presently served by passing upon the legitimacy of orders that at this point have no legal force and effect.").
¶ 9 Therefore, we must determine whether the trial court, in ruling upon the motion to stay the execution of the writ of possession or set it aside, could issue an order that had any legal force or effect by *947 granting the requested relief. Clearly, the issue of Appellant's request for a stay of the execution of the writ of possession had been rendered moot by the sheriff's execution of the writ. It would have been futile for the court to have issued an order staying the execution of the writ after the writ had already been executed. We must next determine whether there would have been any legal force or effect to the court setting aside the writ after it had been executed. A writ of possession is simply the legal means for executing on a judgment of possession. See Pa.R.C.P. 3160. Once Appellant was out of possession of the Property, the writ of possession became a nullity. The purpose for which the writ existed, namely divesting Appellant of possession of the Property, had been achieved and, therefore, setting aside the writ of possession would be of no consequence.
¶ 10 Appellant argues that "[w]here meaningful relief can still be granted, even if restitutionary in nature, the matter is not moot." Brief for Appellant at 13-14. In support of this argument, Appellant directs us to one case, Faden v. Philadelphia Housing Authority, 424 Pa. 273, 227 A.2d 619 (1967).
¶ 11 In Faden, a Philadelphia taxpayer named Faden brought suit against the Philadelphia Housing Authority seeking to set aside a contract for the conversion of coal-fired boilers between the Authority and a contractor on the basis that the contract had not been awarded to the lowest possible bidder. Id. at 620. Faden's complaint also sought "such other and further relief as may be deemed just and reasonable." Id. at 621. The Authority filed preliminary objections to the complaint, which the Court of Common Pleas sustained. Faden appealed to the Supreme Court. However, approximately three months after Faden filed her appeal, the Authority filed a motion with the Supreme Court requesting that it dismiss the appeal as moot since all the work to be performed under the underlying contract had been completed. See id. at 620. The court declined to dismiss the case as moot. In so deciding, the court analyzed the relief requested by Faden in her complaint. The court stated:
Appellant's prayer for relief in the court below did not seek only to restrain the defendant contractor from performing its duties under the contract, it also sought to restrain the defendant Philadelphia Housing Authority from performing its duties and in addition such other and further relief as may be deemed just and reasonable.
Id. at 621 (emphasis added). The court reasoned that the completion of performance of the contract did not render the case moot because Faden had requested additional relief and such relief may still be available to her. See id.
¶ 12 In this case, the trial court had before it a motion requesting a stay of the execution of the writ of possession or an order setting it aside. As discussed above, after the sheriff executed the writ, the court could not issue an order that had any legal force or effect regarding this requested relief. Furthermore, considering the posture of this case, Appellant could not have requested, nor was she entitled to, any additional relief. Three months prior to Judge Solomon concluding that the motion was moot, he had already issued an order declining to grant Appellant an extension of time to comply with his earlier orders. This left Appellant with no option but to vacate the Property in compliance with the order of December 22nd. Moreover, the motion to set aside the writ of possession or stay its execution did not advance a legal argument as to why Appellant was not obligated to comply with Judge Solomon's December 22nd order and vacate the premises. Nor has Appellant presented this Court with any argument that would demonstrate her entitlement *948 to possession of the Property. Therefore, Judge Solomon did not err in denying the motion because the execution of the writ rendered the motion moot.
¶ 13 Alternatively, were we to determine that the motion was not moot, we would nonetheless affirm Judge Solomon's order denying the motion as we are unpersuaded by Appellant's first argument that Appellee was not entitled to a writ of possession because there allegedly was no underlying judgment of possession. Appellant cites Rule 3160, which states that a "judgment for possession shall be enforced by a writ of possession." Pa.R.C.P. 3160. Appellant claims that "no judgment for possession was properly entered, and hence the predicate for the issuance of a writ of possession was not established." Brief for Appellant at 12. This argument is without merit.
¶ 14 Although the docket entries indicate that Appellant initially perfected a supersedeas on the judgment of possession from District Magistrate Mitchell, the supersedeas was terminated on February 24, 2000, upon praecipe of Appellee confirming that Appellant failed to deposit into court a bond or sum of money in the amount of monthly rent due for a period in excess of 30 days. Reproduced Record (R.R.) at 1a. On March 6, 2000, Appellant deposited into court a bond in the amount of two months' rent, however, Appellant made no further deposits after this date. R.R. at 1a-2a. At the time that Appellee praeciped for the writ of possession on March 3, 2001, the record reflects that she had not deposited any money into court for almost a year and, therefore, there was no supersedeas of record to stay the judgement of possession entered by District Magistrate Mitchell. See Pa.R.C.P.D.J. 1008(B); Smith v. Coyne, 555 Pa. 21, 722 A.2d 1022, 1023 (1999) (stating that when an appellant fails to comply with the requirements of Rule 1008(B), the appeal to the Court of Common Pleas does not operate as a supersedeas to stay a district justice's judgment of possession). Consequently, at the time that the prothonotary issued the writ of possession there was a valid judgment of possession of record.
¶ 15 Furthermore, at the time that Appellant presented the motion to the trial court, Judge Solomon was aware that Appellant had failed to comply with the terms of his December 22nd order, and that over ten months had passed since the expiration of the original April 12th agreement that also required that Appellant vacate the Property. Upon these facts, we cannot conclude that Judge Solomon erred in denying Appellant's motion to set aside the writ of possession or stay its execution.
¶ 16 Order AFFIRMED.
NOTES
[1] We note that although Appellant baldly claims that the trial court should have issued a temporary stay if it concluded that it had insufficient time to rule on the motion, Brief for Appellant at 13, Appellant has failed to articulate an argument in support of this claim or cite any legal authority in support thereof. Consequently, we do not reach this issue. See Pa.R.A.P. 2119; Collins v. Cooper, 746 A.2d 615, 619 (Pa.Super.2000) (stating that an appellant waives a claim of trial court error when he or she "has failed to cite any authority in support of a contention."). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537321/ | 797 A.2d 314 (2002)
Louis J. CAPOZZI, Jr., Appellee,
v.
LATSHA & CAPOZZI, P.C., Kimber L. Latsha, Glenn R. Davis and Douglas C. Yohe, Appellants.
Superior Court of Pennsylvania.
Argued February 13, 2002.
Filed April 9, 2002.
*315 Richard H. Wix, Harrisburg, for appellants.
John M. Cramer, Harrisburg, for appellee.
Before ORIE MELVIN, KLEIN, and OLSZEWSKI, JJ.
OLSZEWSKI, J.
¶ 1 Appellants Latsha & Capozzi, P.C.; Kimber L. Latsha; Glenn R. Davis; and Douglas C. Yohe appeal from the trial court's February 27, 2001, order granting appellee Louis J. Capozzi, Jr.'s post-trial motion for judgment notwithstanding the verdict, and awarding him a new trial on the specified issue of damages. For the following reasons, we affirm.
¶ 2 The trial court aptly summarized the facts of the case as follows:
In 1994, Louis Capozzi and Kimber Latsha worked as attorneys for the *316 Cumberland County law firm Shumaker & Williams. They left Shumaker & Williams, and on May 23, 1994, incorporated Latsha & Capozzi, a professional corporation for the practice of law. Capozzi and Latsha took [several] of Shumaker & Williams' clients with them. In July, 1994, Douglas Yohe left Shumaker & Williams to become a shareholder in Latsha & Capozzi. In 1994, Latsha & Capozzi, P.C. had gross revenues of approximately $300,000. In March 1995, Glenn Davis left Shumaker & Williams to become a shareholder in Latsha & Capozzi. He also brought some of Shumaker & Williams' clients with him. Once Davis became a shareholder, Latsha and Capozzi [Capozzi and Latsha] owned 37 1/2 percent of the stock in Latsha & Capozzi P.C., with Yohe owning 15 percent and Davis owning 10 percent. By the end of 1996, Latsha & Capozzi P.C. had 15 attorneys and gross revenue for the year of $2.6 million.
In January 1997, Latsha, Yohe, and Davis became concerned about the conduct of Capozzi, which they felt was injurious to the reputation of the law firm. They attributed Capozzi's conduct to the abuse of alcohol. On May 2, 1997, the three shareholders of the firm and others conducted an intervention in an effort to have Capozzi enter the Caron Foundation for treatment. On the same date, the board of directors reduced Capozzi's $175,000 annual salary to $100,000 a year. [footnote omitted]. On May 5, Capozzi undertook inpatient treatment at the Caron Foundation. He completed that treatment on May 19. On June 2, the board of directors suspended Capozzi's employment without pay. On June 6, Capozzi was notified in writing that he could return to employment with the firm for an open probationary period subject to 13 conditions. Capozzi did not accept the conditions and his employment with the firm terminated. On June 11, Capozzi started his own law firm, Capozzi Associates, in Harrisburg, Dauphin County.
Capozzi's legal specialty is representing medical care providers, who seek higher reimbursements than have been paid by government and other entities to the providers for services rendered to patients. Latsha & Capozzi P.C. billed clients based on written fee agreements of hourly rates for the shareholders and associates in the firm. In 1996, having become more adept at representing the firm's medical providers, Capozzi sought to switch to value billing. The board of directors rejected the proposal. Notwithstanding, Capozzi arbitrarily increased the time billed to 66 clients from the actual time that associates had worked on behalf of those clients. The law firm discovered these overbillings, which were in violation of the firm's written fee agreement with those clients, shortly before Capozzi's employment ended on June 6, 1997. The firm had an audit conducted and determined that the 66 clients had been overbilled by Capozzi. In July and August, 1997, Latsha & Capozzi P.C., returned to each of the 66 clients the amount of money that Capozzi had overbilled that client. When the money was returned, the firm informed each client that it had determined that there was an over-billing, but it did not advise the clients of the reason why.
In May 1997, Capozzi generated a complete client list from the firm's computer base. When he started Capozzi Associates on June 11, 1997, he took many of the clients of Latsha & Capozzi P.C., with him, some of which were among the 66 clients the firm returned money to because of his overbillings. Capozzi solicited some of these clients *317 before his employment ended on June 6, 1997, and sent them release forms. Capozzi Associates now has nine attorneys.
When Latsha and Capozzi incorporated their law firm, they had an oral agreement that if either of them left the firm, [or] competed with the firm, that shareholder would receive for his stock the amount of his capital contribution in the professional corporation. When Yohe became a shareholder, he entered [] a similar oral agreement with Latsha and Capozzi. When Davis became a shareholder, he too entered [ ] a similar oral agreement with Latsha, Capozzi, and Yohe. Latsha & Capozzi P.C. never had a written shareholders' agreement. The shareholders at times talked about entering [ ] a written agreement, and numerous drafts were circulated, but they were never acted upon. [FN5. Louis Capozzi testified that there were never any oral agreements among the shareholders to govern dissolution.]
¶ 3 Trial Court Opinion and Order, 2/27/01, at 4-7, Capozzi v. Latsha & Capozzi, P.C., 50 Pa. D. & C.4th 489 (Pa. Com.Pl.2001). Appellee asserted, in his post-trial motion for relief, the oral agreement that the jury found existed amongst the shareholders of Latsha & Capozzi, P.C., restricted his right as a lawyer to practice law after his termination and is unenforceable as a violation of public policy. Id. at 7. As stated in the facts above, the oral agreement required that if a shareholder left the firm, and then competed with the firm, that shareholder's stock would be valued at his capital contribution, namely, five-thousand dollars ($5000.00). In support of his public policy argument, appellee relied on Rule 5.6 of the Rules of Professional Conduct adopted by the Supreme Court of Pennsylvania. The rule states in pertinent part:
A lawyer shall not participate in offering or making:
(a) "a partnership, shareholders, operating, employment or other similar type of agreement that restricts the rights of a lawyer to practice after termination of the relationship, except an agreement concerning benefits upon retirement...." (emphasis added)
Model Rules of Prof'l Conduct R. 5.6.
The trial court concluded, based on our Supreme Court's disposition in Maritrans GP, Inc. v. Pepper, Hamilton & Scheetz, 529 Pa. 241, 602 A.2d 1277 (1992), that appellee could not rely on the Rules of Professional Conduct, alone, to create or substantiate a basis for relief.[1] The trial court found, however, that as a matter of public policy, "attorneys who are shareholders of a professional corporation may enter into an enforceable agreement that reasonably prevalues the stock of a departing shareholder who then competes with the law firm." Trial Court Opinion and Order, 2/27/01, at 18. The court continued, however, and held that such agreements must comply with the standards for a restrictive covenant set forth by our Supreme Court. Id. In the case sub judice, the trial court found the shareholders' forfeiture clause failed to meet that standard, as overbroad in both time and geographical scope. Id. The trial court, therefore, held that appellee is entitled to judgment notwithstanding the verdict on liability and ordered a new trial on damages to determine the value of his stock. Id. at 21. This timely appeal followed.
*318 ¶ 4 Appellants raise five (5) issues for our review:
A. Did the trial court err when it held that the shareholders valuation agreement is equivalent to an employment contract and that the validity by which it is to be judged is the standard applicable to restrictive covenants?
B. Did the trial court err when it held that the valuation provision was unenforceable because it was not reasonably limited in both time and territory?
C. Did the trial court err in holding that Plaintiff was not equitably estopped from attacking the enforceability of the valuation agreement?
D. If it is determined as a matter of law that there was no valid oral agreement, is [appellee] entitled to any monetary recovery for the value of his shares in the Professional Corporation?
E. If there is an exception to the Professional Corporation Law which allows a shareholder who is wrongfully excluded from a professional corporation to collect damages, should any factual disputes over the circumstances of the termination be determined by the jury?
Brief for Appellant at 4.
¶ 5 We begin with our standard of review. The decision whether to grant a new trial lies within the trial court's sound discretion. Martin v. Evans, 551 Pa. 496, 501-02, 711 A.2d 458, 461 (1998). Therefore, when reviewing an order granting or denying a motion for a new trial, we must determine whether the trial court "clearly and palpably abused its discretion or committed an error of law which affected the outcome of the case." Whyte v. Robinson, 421 Pa.Super. 33, 617 A.2d 380, 382 (1992).
¶ 6 Appellants' first issue argues that the trial court erred in construing the oral shareholders' valuation agreement as an employment contract and, as such, incorrectly applied the standard for judging restrictive covenants. Brief for Appellant at 9. Our case law reveals that covenants not to compete do not need to be found specifically in an employment agreement for our standard to apply. Wainwright's Travel Service, Inc. v. Schmolk, 347 Pa.Super. 199, 500 A.2d 476, 477 (1985). In Wainwright, we held that it is only necessary that a restrictive covenant be ancillary to another agreement incident to an employment relationship between the parties. Id. at 478. The covenant in Wainwright was found in a stock purchase agreement. See id. In that case, we reviewed the covenant to determine if it was reasonably necessary, supported by consideration, and limited in time and geographical scope. Id. (citations omitted). We disagree with appellant that our standard should differ, or not apply, because we are reviewing a covenant in a shareholders' agreement. New Jersey courts have spoken directly to this issue and held "a covenant not to compete, [ ] otherwise reasonable, will not be denied enforcement merely because it is included in a partnership agreement." Creter v. Creter, 52 N.J.Super. 197, 145 A.2d 149, 154 (1958). Appellants' argument is unfounded.
¶ 7 Finding that the Latsha & Capozzi, P.C., valuation agreement created a form of a restrictive employment covenant, the trial court held that attorneys could be subject to such covenants in Pennsylvania. Trial Court Opinion and Order, 2/27/01/ at 18. The trial court adopted its reasoning from the California Supreme Court's case Howard v. Babcock, 6 Cal.4th 409, 25 Cal. Rptr.2d 80, 863 P.2d 150 (1993). We agree with the California Supreme Court and, further, adopt its reasoning and rationale.
¶ 8 The facts of Howard are analogous to this case where four (4) general partners left a law firm to open a competing firm. See id. The general partners were *319 subject to the firm's partnership agreement, which provided, in pertinent part:
[s]hould more than one partner, associate or individual withdraw from the firm prior to age sixty-five (65) and thereafter within a period of one year practice law ... together or in combination with others, including former partners or associates of this firm ... within Los Angeles or Orange County Court system, said partners or partners shall be subject... to forfeiture of all their rights to withdrawal benefits other than capital as provided for in Article V herein.
Id. at 151. After leaving, the partners were tendered payments of their capital share of the firm, but refused compensation for accounts receivable or acknowledgment that they maintained any interest in work in progress or unfinished business. Id. at 152. The California Supreme Court considered the validity and enforceability of the firm's partnership agreement on appeal.
¶ 9 The California Supreme Court began its analysis with the California Business and Professional Code § 16602, which provided that a "partnership agreement may provide against competition by withdrawing partners in a limited geographical area." Id. at 154. The Court, faced with ethical concerns, considered whether this section could apply to lawyers. Id. at 155. The Court reasoned it could. We agree with that finding and adopt the following from the California Supreme Court:
The traditional view of the law firm as a stable institution with an assured future is now challenged by an awareness that even the largest and most prestigious firms are fragile economic units.... Not the least of the changes rocking the legal profession is the propensity of withdrawing partners in law firms to "grab" clients of the firm and set up a competing practice. In response, many firms have inserted noncompetition clauses into their partnership agreements. These noncompetition clauses have grown and flourished, despite, or in defiance of, the consistent holding of many courts across the nation that a noncompetition clause violates the rules of professional conduct of the legal profession. It is evident that these agreements address important business interests of law firms that can no longer be ignored.
The firm has a financial interest in the continued patronage of its clientele. The firm's capital finances the development of a clientele and the support services and training necessary to satisfactorily represent the clientele. In earlier times, this investment was fairly secure, because the continued loyalty of partners and associates to the firm was assumed. But more recently, lateral hiring of associates and partners, and the secession of partners from their firms has undermined this assumption. Withdrawing partners are able to announce their departure to clients of the firm, and many clients defect along with the attorneys with whom they have developed good working relationships. The practical fact is that when partners with a lucrative practice leave a law firm along with their clients, their departure from and competition with the firm can place a tremendous financial strain on the firm.
As Chief Justice Rehnquist has observed: "Institutional loyalty appears to be in decline. Partners in law firms have become increasingly `mobile,' feeling much freer than they formerly did and having much greater opportunity than they formerly did, to shift from one firm to another and take revenue-producing clients with them." Not only is the income from the clientele of the firm *320 diminished when partners withdraw and take clients with them, but the expenses attributable to the remaining partners may increase as withdrawing partners seek to escape liability for mutually incurred debt. Recognizing these sweeping changes in the practice of law, we can see no legal justification for treating partners in law firms differently in this respect from partners in other businesses and professions.
Id. at 157 (internal citations omitted). We believe a forfeiture for competition clause serves as a sufficient tool to allow attorneys to leave a practice with one firm to start another. Notwithstanding, the clause affords protection to the original firm, and does not directly hinder the practice of law. "Financial-disincentive provisions differ from direct restrictive covenants. They do not impose a blanket or geographical ban on the practice of law nor do they directly prohibit an attorney from representing former clients." Jacob v. Norris, McLaughlin & Marcus, 128 N.J. 10, 22, 607 A.2d 142 (1992).
¶ 10 Other jurisdictions that have considered restrictive covenants for lawyers include Peroff v. Liddy, Sullivan, Galway, Begler & Peroff, P.C., 852 F.Supp. 239 (S.D.N.Y.1994); Cohen v. Lord, Day & Lord, 75 N.Y.2d 95, 551 N.Y.S.2d 157, 550 N.E.2d 410 (1989); Anderson v. Aspelmeier, Fisch, Power, Warner & Engberg, 461 N.W.2d 598 (Iowa 1990); Pettingell v. Morrison, Mahoney & Miller, 426 Mass. 253, 687 N.E.2d 1237 (1997); and Jacob v. Norris, McLaughlin & Marcus, 128 N.J. 10, 607 A.2d 142 (N.J.1992).
¶ 11 All of these jurisdictions substantiate their conclusions with ethical considerations, specifically Rule of Professional Conduct 5.6. In Pennsylvania, our Supreme Court via Maritrans instructs us that the Rules of Professional Conduct cannot substantiate a cause of action, in damages or for injunctive relief. Maritrans, 602 A.2d at 1284. While the rules can be considered, we cannot rely on them to decipher a question of law.
¶ 12 We hold that a forfeiture for competition clause is enforceable in Pennsylvania for lawyers.[2] The clause, must still, however, meet the applicable standard for restrictive covenants. Our courts have held that a restrictive covenant (1) must be ancillary to the main purpose of a lawful transaction, (2) reasonably necessary,[3] (3) supported by consideration, and (4) application must be limited as to duration of time and territory. Volunteer Firemen's Ins. Servs., Inc. v. CIGNA Ins. Agency, 693 A.2d 1330, 1337 (Pa.Super.1997) (citing Piercing Pagoda, Inc. v. Hoffner, 465 Pa. 500, 507, 351 A.2d 207, 210 (1976)).
¶ 13 In conducting our analysis, we first note that the jury, as ultimate finder of fact, found that the shareholders of Latsha & Capozzi, P.C. had an oral agreement with appellee; i.e., if he left the law firm and competed with the firm, his stock would be valued at his capital contribution. N.T. Trial, 11/1/00, at 311-312. There is nothing in the record to indicate that the agreement was not part of an arms-length bargain between knowing and willing parties. *321 Boyce v. Smith-Edwards-Dunlap Co., 398 Pa.Super. 345, 580 A.2d 1382, 1387 (1990).
¶ 14 The trial court believed that the first two prongs of the standard had been met by appellant's forfeiture clause. We disagree. It is our conclusion that the appellants' forfeiture clause is not reasonably necessary. The clause provided that if a partner left the firm, his stock would be valued at five thousand ($5,000) dollars, the amount of his initial capital contribution. In 1996, alone, Latsha & Capozzi, P.C. had grown to fifteen attorneys and had gross revenues of 2.6 million dollars. Trial Court Opinion and Order, 2/27/01, at 4. The forfeiture clause is unreasonable in light of the growth and revenue of the firm. In the aforementioned Howard v. Babcock, the departing partners received their proportional value of capital in the firm at the date they departed and were denied only a share of the accounts receivable and value of work in progress. Howard, 25 Cal.Rptr.2d 80, 863 P.2d at 152. We cannot find that a forfeiture clause entitling a co-founding, named partner to only five thousand ($5,000) dollars of a firm worth $2.6 million is reasonably necessary to protect the firm.
¶ 15 We also agree with the trial court's finding that the clause was not limited in either time or territory and, as such, was unenforceable. Trial Court Opinion and Order, 2/27/01, at 18. As noted in Bilec v. Auburn & Assocs., Inc., a non-competition agreement which bars competition in general business "without limitation as to time or area, [is] void on its face as being an unreasonable restraint of trade." 403 Pa.Super. 176, 588 A.2d 538, 542 (1991) (citation omitted). We, therefore, affirm the trial court's finding that Latsha and Capozzi's forfeiture for competition clause is an unreasonable restraint on competition. Appellee is entitled to a trial to determine the value of his stock in Latsha & Capozzi, P.C., as of the date of his departure.
¶ 16 Appellants raise equitable estoppel in their third issue. Appellants contend that the court is barred from remedying the forfeiture clause because appellee contributed to its creation. Brief for Appellant at 18; See Slater v. Slater, 365 Pa. 321, 74 A.2d 179, 181 (1950). In Slater, our Supreme Court cited Paul v. Paul, for the proposition that if a plaintiff "cannot prove his case without showing he has broken the law or participated in a fraudulent transaction, the court will not assist him." Id. (quoting Paul v. Paul, 266 Pa. 241, 245, 109 A. 674 (1920)).
¶ 17 Although we find that appellee did help to create and implement the original oral forfeiture clause, we refuse to fashion law that would deny a party the opportunity to challenge an agreement restraining the ability to earn a livelihood. Furthermore, contrary to the quoted language in Slater, Pennsylvania courts have yet to hold any restrictive covenant illegal. At best, our Rules of Professional Conduct caution against their use. To couch such a covenant as illegal or fraudulent imposing equitable estoppel would be presumptuous.
¶ 18 We also dispose of appellant's fourth issue, which he prefaces with; "if it is determined there was no valid oral agreement." This issue is meritless because we have found that an oral agreement existed. Further, we have concluded, appellee was bound by the agreement. See Brief for Appellant at 4.
¶ 19 Lastly, appellants contend that the trial court erred in excluding the testimony of Robert Davis, Esquire. "A trial court may properly exclude evidence if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of issues or misleading the jury."
*322 Mansour v. Linganna, 787 A.2d 443, 448 (Pa.Super.2001). Absent a clear abuse of discretion, we will not disturb a trial court's evidentiary ruling. See id. We cannot find that the trial court abused its discretion here. Testimony of appellee's abuse of alcohol could have only served to improperly influence the jury.
¶ 20 Order affirmed.
NOTES
[1] In Maritrans our Supreme Court held, "[t]he Superior Court correctly recognized that simply because a lawyer's conduct may violate the rules of ethics does not mean that the conduct is actionable, in damages or for injunctive relief." 529 Pa. at 254, 602 A.2d at 1284.
[2] This opinion is not to be read as considering a direct restriction on the practice of law.
[3] The trial court, in its opinion, omitted prong two of the standard we assume because the Piercing Pagoda court essentially combined the first two elements. Volunteer Firemen's Ins. Servs., 693 A.2d at 1337 n. 8. The development of case law in this area has brought out prong two in the analysis. We will include it for absolute clarity. Nevertheless, we believe the trial court conducted the appropriate analysis, sub judice, and found the valuation agreement unenforceable as overbroad in both time and scope. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537207/ | SYLVESTER SHOCKLEY, Petitioner Below-Appellant,
v.
CARL DANBERG, Commissioner of Correction, RICK KEARNEY, Bureau Chief, PERRY PHELPS, Warden of James T. Vaughn Correctional Center, Respondents Below-Appellees.
No. 88, 2009.
Supreme Court of Delaware.
Submitted: August 14, 2009.
Decided: September 10, 2009.
Before STEELE, Chief Justice, HOLLAND and BERGER, Justices
ORDER
Randy J. Holland, Justice.
This 10th day of September 2009, upon consideration of the briefs on appeal and the record below, it appears to the Court that:
(1) The petitioner-appellant, Sylvester Shockley, filed an appeal from the Superior Court's February 12, 2009 order granting the State's motion to dismiss his petition for a writ of mandamus. We find no merit to the appeal. Accordingly, we affirm.
(2) Shockley is an inmate incarcerated at the James T. Vaughn Correctional Center. In 1981, he was convicted of Rape in the First Degree and, in 1982, was sentenced to life imprisonment. Shockley's life sentence was imposed prior to the enactment of the 1989 Truth in Sentencing Act ("TIS") and allows for the possibility of parole. In 2008, Shockley filed a petition for a writ of mandamus in the Superior Court requesting that the Superior Court compel the Department of Correction ("DOC") to credit him with "good time" against his 1982 life sentence.[1] The Superior Court granted the State's motion to dismiss the petition on the merits and on res judicata grounds and granted the State's motion to rescind Shockley's in forma pauperis ("IFP") status.[2]
(3) In this appeal, Shockley claims that he has a clear legal right to statutory good time credits and that, therefore, the Superior Court improperly dismissed his petition for a writ of mandamus. He also claims that the Superior Court's rescission of his IFP status violated his constitutional rights and requests free copies of his plea colloquy and sentencing hearing transcripts.
(4) A writ of mandamus is an extraordinary remedy issued by the Superior Court to compel a board or agency to perform a duty.[3] As a condition precedent to the issuance of the writ, the petitioner must demonstrate that a) he has a clear right to the performance of the duty; b) no other adequate remedy is available; and c) the board or agency has arbitrarily failed or refused to perform its duty.[4] Moreover, mandamus will issue only to require the performance of a clear legal or ministerial duty.[5] Mandamus will not issue to compel a discretionary act.[6]
(5) This Court previously has ruled that inmates serving pre-TIS life sentences with the possibility of parole are not entitled to good time credits pursuant to Section 4381 and can never be conditionally released pursuant to Section 4348.[7] As such, Shockley can not demonstrate the "clear right" to statutory good time credits necessary to prevail on a petition for a writ of mandamus. Moreover, Shockley's claim is barred under the doctrine of res judicata.[8] This Court has previously affirmed the Superior Court's denial of a petition for a writ of mandamus filed by Shockley that requested the Superior Court to compel the DOC to recalculate his release date, barring his current claim.[9] We, therefore, conclude that the Superior Court properly denied Shockley's petition for a writ of mandamus.
(6) Shockley also claims that the Superior Court improperly rescinded his IFP status. In its February 12, 2009 order, the Superior Court determined that the State's motion to rescind Shockley's IFP status contained "clear and convincing evidence that [Shockley] has had at least three actions dismissed as frivolous, malicious or for failure to state a claim prior the filing of the instant action." Pursuant to Del. Code Ann. tit. 10, §8804(f), the Superior Court is authorized to deny IFP status to prisoners who abuse the judicial process.[10] We, therefore, conclude that the Superior Court acted within its discretion when it rescinded Shockley's IFP status. We also conclude that Shockley has manifestly failed to demonstrate any violation of his constitutional rights and has failed to justify his request for transcripts at State expense.
NOW, THEREFORE, IT IS ORDERED that the judgment of the Superior Court is AFFIRMED.
NOTES
[1] Del. Code Ann. tit. 11, §§4381(a) and 4348.
[2] The Superior Court also denied Shockley's motions to strike and for entry of summary judgment.
[3] Clough v. State, 686 A.2d 158, 159 (Del. 1996); Del. Code Ann. tit. 10, §564.
[4] Id.
[5] In re Bordley, 545 A.2d 619, 620 (Del. 1988).
[6] Id.
[7] Evans v. State, 872 A.2d 539, 558 (Del. 2005); Jackson v. Multi-Purpose Criminal Justice Facility, 700 A.2d 1206, 1207 (Del. 1997).
[8] Dover Historical Society, Inc. v. City of Dover Planning Commission, 902 A.2d 1084, 1092 (Del. 2006).
[9] Shockley v. Taylor, Del. Supr., No. 216, 2005, Berger, J. (Aug. 24, 2005).
[10] Walls v. Taylor, Del. Supr., No. 489, 2003, Holland, J. (Apr. 26, 2004). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537222/ | 979 A.2d 698 (2009)
410 Md. 544
ATTORNEY GRIEVANCE COMMISSION OF MARYLAND
v.
Lester A.D. ADAMS.
Misc. Docket No. AG 65, September Term, 2006.
Court of Appeals of Maryland.
September 9, 2009.
Melvin Hirshman, Bar Counsel, Atty. Grievance Com'n of Maryland, for Petitioner.
Charles E. Iliff, Jr. (Iliff & Meredith, P.C.), Pasadena, for Respondent.
Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, MURPHY, JOHN C. ELDRIDGE (Retired, specially assigned), and IRMA S. RAKER (Retired, specially assigned), JJ.
BELL, C.J.
Lester A.D. Adams, the respondent, was reinstated[1] to the practice of law in this *699 State by Order of this Court, a majority concurring, dated April 11, 2007. Attorney Grievance Comm'n v. Adams, 404 Md. 1, 944 A.2d 1115 (2008). His reinstatement was immediately challenged. Just over a month after he was reinstated, Jonathan A. Azrael, counsel for Christopher A. Brooks, a party to litigation involving the respondent, filed a Motion To Strike Order Granting Reinstatement. Id. at 3-4,944 A.2d at 1116. In addition to seeking to vacate reinstatement, he sought further proceedings under Maryland Rule 16-781(i).[2] Conceding that the Court was aware of the litigation, which Bar Counsel referenced[3] in responding to the respondent's petition for reinstatement and which then was pending in the United States District Court for the District of Maryland, Mr. Azrael believed that Bar Counsel had not sufficiently communicated with his client about the client's allegations against the respondent or sufficiently investigated the respondent's representations with regard to that litigation. Id. at 4-5, 944 A.2d at 1116-17. His purpose in seeking to intervene, he said, was to "give his client the opportunity to testify and afford the hearing court the opportunity to consider, in light of that testimony and documentary evidence, whether the respondent `has engaged in any other professional misconduct since the imposition of discipline.'" Id. at 4-5, 944 A.2d at 1117. Of interest in that regard, Azrael suggested, among others, inquiry into whether the respondent forged Brooks' name to legal documents in connection with the real property at issue in the federal litigation, including a deed to that property, and, having done so, made a false oath by notarizing the forged signature.
Although "essentially neutral, neither recommending reinstatement nor opposing that relief," when responding to the respondent's reinstatement petition, Adams, 404 Md. at 5, 944 A.2d at 1117, Bar Counsel joined with Azrael in requesting a hearing "concerning whether the Order granting *700 reinstatement should be revoked" and, like Azrael, requested that it be held after the trial pending then in the federal court had taken place, when "there will be testimony by [the respondent] and [Mr. Azrael's client] under oath ... which may have some bearing on the resolution of the motion." Id.
In his response to this Court's Order to Show Cause, the respondent denied that Azrael, opposing counsel in pending litigation, had the "right or authority" to prosecute a petition to vacate the respondent's reinstatement to the practice of law. Adams, 404 Md. at 6, 944 A.2d at 1118. Citing Rule 16-781 (m),[4] he acknowledged and conceded Bar Counsel's authority and right to do so:
"Rule 16-781(m) provides that Bar Counsel may file such a motion for reasons stated in the Rule. The Rule does not give standing to members of the public or attorneys to file motions directly with this Court, and clearly contemplates a motion being filed only by Bar Counsel, with the information sources and investigative capacity of that office."
The respondent also argued that there was no basis shown to vacate his reinstatement. In support, notwithstanding that the federal case did not settle, as he had predicted, and the trial court made factual findings against him,[5] he noted that there were no allegations that he failed to comply with the order of reinstatement or knowingly made a false statement or material omission in the Petition for Reinstatement he filed, the only grounds in the Rule for striking reinstatement.
We agreed with the respondent. Accordingly, we dismissed Azrael's motion. Looking at the Rule, we reiterated the two reasons it prescribes for vacating an order reinstating a disbarred or suspended attorney: "when the petitioner fails substantially to comply with the order of reinstatement and when the petition for reinstatement contains a false statement or omits a material fact, which the petitioner knew to be false or omitted and did not disclose to Bar Counsel prior to entry of the order." Adams, 404 Md. at 10, 944 A.2d at 1120. We also concluded, as the respondent also had argued, that the only provision made for who may file a petition *701 to vacate the reinstatement order is for Bar Counsel to do so. Limiting, in the way the Court did, the bases for vacation of reinstatement and who may pursue that remedy, we explained:
"... is logical and appropriate. The motion to vacate an order reinstating an attorney is, after all, like the petition to reinstate an attorney's privilege to practice law, simply a part, albeit an important part, of this Court's regulation of the legal profession, specifically, its regulation and oversight of attorney discipline, in which Bar Counsel necessarily plays a critical and extensive role."
Id. at 10-11, 944 A.2d at 1120. We then concluded:
"The motion to vacate filed in this case was not filed by Bar Counsel. Indeed, Bar Counsel has yet to file any such motion. Rather, as we have seen, it was filed by counsel for the plaintiff in litigation pending against the respondent. Nor was the basis for the motion to vacate a failure on the part of the respondent to comply with the conditions the Court imposed for reinstatement. Instead, the movant alleged failure of Bar Counsel to investigate a complaint that the movant filed against the respondent, to communicate with him or his client, the complainant, regarding the allegations made against the respondent in that complaint and to verify, with him or the complainant that the pending litigation involving the respondent and the complainant, the pendency of which was reported to the Court, would be able to be settled without a trial."
"To be sure, the concerns of a complainant, raised in a complaint to Bar Counsel, filed prior to the respondent's suspension, but which had not been investigated when the respondent was reinstated, and with whom Bar Counsel had not spoken with respect to the respondent's motion for reinstatement, are properly considered and may inform the question of the respondent's character and present fitness to practice law. There exists an avenue for considering those concerns. That avenue is not this Court's entertaining a petition to vacate filed by a third party, after the respondent has been reinstated, presumably after the required investigation has occurred. The avenue is Bar Counsel, to whose attention the concerns of the third party can, and should, be brought, the expected result of which would be an investigation. That investigation would reveal whether there is a basis for vacation of reinstatement and whether that relief should be sought. The avenue is still open."
Id. at 12-13, 944 A.2d at 1121-22.
Within the month of the filing of the Court's opinion, accepting what he perceived to be the Court's invitation, Bar Counsel filed his Motion to Vacate Reinstatement. In that motion, he alleged:
"Mr. Adams failed to disclose that the pending litigation involved an allegation, readily admitted by Mr. Adams, that he had appended the name of Dr. Christopher A. Brooks to an offer to purchase and contract of sale without Dr. Brooks' knowledge. Additionally, Mr. Adams notarized the signature of Dr. Brooks which Mr. Adams had signed."
In support of that allegation, Bar Counsel recounted what had occurred in the United States District Court when the case between Dr. Brooks and the respondent was tried: in a memorandum opinion, the trial judge found in favor of Dr. Brooks and against the respondent, notably finding, as Dr. Brooks had alleged and contrary to the respondent's litigation position, that the respondent executed the offer to purchase and contract of sale without authorization from Dr. Brooks and without having *702 submitted those documents to him. Of further significance to Bar Counsel was the fact that the trial judge determined that the respondent engaged in deceptive conduct and that his testimony was not credible.[6] Bar Counsel added that the respondent signed Dr. Brooks's name, presumably again without authorization, to a lease entitling a third party to occupy the premises at issue and giving that person an option to purchase.
Thus, Bar Counsel concluded that the respondent did not disclose the "true facts" concerning the litigation to him prior to the Order of Reinstatement being entered, either in respondent's Reinstatement Petition or in response to the inquiry Bar Counsel made of the respondent with respect to the status of the federal litigation. Bar Counsel asks this Court to revoke the respondent's reinstatement.
Responding to the Motion, the respondent urges its denial. Although he concedes, as he must, that the federal trial did not go as he would have liked and that the findings of the trial judge were, to say the least, adverse to him and his future prospects with regard to that litigation, he maintains, nevertheless, that Bar Counsel has failed to carry his burden under Rule 16-781(m) of showing that the respondent did not substantially comply with the reinstatement order or that he knowingly made false statements or omitted material facts in his petition for reinstatement. Indeed, the respondent asserts that Bar Counsel made no such allegations, opting instead to rely on the argument that the respondent supplied incomplete information and, in that way, ran afoul of the Rule. That rationale does not suffice, the respondent submits, because, given the information he supplied to Bar Counsel, and especially when that information is considered in conjunction with that which Bar Counsel received from other sources, Bar Counsel was not knowingly misled; the respondent "certainly did not know that any material fact was unknown to Bar Counsel."
Alternatively, the respondent argues that the adverse decision at trial, having been rendered after he was reinstated and being based on a burden of proof and standard of proof not applicable to disciplinary proceedings pursuant to Rule 16-757, should not be considered. More particularly, he reasons:
"Mr. Adams was reinstated by Order of this Court dated April 11, 2007. On the second page of the Motion, Bar Counsel refers to an opinion by Judge Chasanow, which was rendered on July 25th, 2007. Certainly, Mr. Adams did not know at the time of his petition or submissions to Bar Counsel what Judge Chasanow would rule, and he does not believe that her decision is correct. Judge Chasanow's decision was more than three months after the Order of Reinstatement. Whether or not that decision is reversed on appeal, it did not predate the Order of Reinstatement, and should not be considered under part(2) of Rule 16-781(m), or in any other disciplinary proceeding."
Maryland Rule 16-781(m) controls our decision in this case. It provides:
"Motion to vacate reinstatement. Bar Counsel may file a motion to vacate an order that reinstates the petitioner if (1) *703 the petitioner has failed to demonstrate substantial compliance with the order, including any condition of reinstatement imposed under Rule 16-760(h) or section (j) of this Rule or (2) the petition filed under section (a) of this Rule contains a false statement or omits a material fact, the petitioner knew the statement was false or the fact was omitted, and the true facts were not disclosed to Bar Counsel prior to entry of the order. The petitioner may file a verified response within 15 days after service of the motion, unless a different time is ordered. If there is a factual dispute to be resolved, the court may enter an order designating a judge in accordance with Rule 16-752 to hold a hearing. The judge shall allow reasonable time for the parties to prepare for the hearing and may authorize discovery pursuant to Rule 16-756. The applicable provisions of Rule 16-757 shall govern the hearing. The applicable provisions of Rules 16-758 and 16-759, except section (c) of Rule 16-759, shall govern any subsequent proceedings in the Court of Appeals. The Court may reimpose the discipline that was in effect when the order was entered or may impose additional or different discipline."
We reiterate what we said in Adams, 404 Md. at 10, 944 A.2d at 1120, and hold,[7] by its terms, the grounds for vacating an order reinstating an attorney are failure of the attorney to comply with the reinstatement order, including any condition of reinstatement, the making, knowingly, of false statements or the knowing omission of material ones and not revealing[8] the true facts to Bar Counsel prior to the entry of the order.
Bar counsel does not allege that the respondent failed to comply substantially with the reinstatement order. Nor does he contend that the respondent made any false statements in his reinstatement petition. He faults the respondent's disclosure in only two particulars: (1) for not disclosing that, in the pending litigation involving Dr. Brooks, it was alleged that the respondent "had appended the name of Dr. Christopher A. Brooks to an offer to purchase and contract of sale without Dr. Brooks' knowledge" and (2) for not disclosing that he "notarized the signature of Dr. Brooks which [the respondent] had signed." It was on these premises, buttressed by the findings of the trial judge after trial, that Bar Counsel concluded that the respondent did not reveal the true facts to him prior to the issuance of the reinstatement Order. Thus, Bar Counsel relies on the second of the tests prescribed by Rule 16-781 (m). And, applying that test, he submits, in effect, that, in addition to revealing the existence of the litigation itself and its nature, the respondent must also advise Bar Counsel of the precise theory on which the opposition party relies to establish his liability.
Turning then to this second test, we hold that the complete non-disclosure by a respondent to Bar Counsel of a fact or set of facts relevant to the disposition of his or her reinstatement petition is, per se, a violation of the test. Where, however, the allegation is that disclosure was incomplete, *704 a respondent will be found to have violated the test only when it has been determined by the Court that the disclosure was indeed incomplete and that what was not disclosed was not simply relevant to the inquiry, but was material to it.[9]
In this case, that there was pending against the respondent in federal court a lawsuit alleging that the respondent defrauded a complainant, against him was a set of facts relevant and material to the disposition of the respondent's reinstatement petition. As we have seen and we shall reiterate, this the respondent disclosed. Thus, Bar Counsel will prevail if the precise manner in which the respondent was alleged, and later found, to have defrauded Dr. Brooks is material and if the findings of the trial judge in that regard are the measure, and, therefore, dispositive of the question of the adequacy of the respondent's disclosure.
It is undisputed that the respondent disclosed to Bar Counsel that there was litigation between the respondent and Dr. Brooks pending in federal court. It is also undisputed that this litigation involved disputed title to real property. The respondent disclosed the federal litigation in his petition for reinstatement and, upon inquiry by Bar Counsel for more information, supplemented that disclosure, in the process supplying Bar Counsel with a Memorandum Opinion by the federal judge that ruled on the pre-judgment motions filed in the case. To be sure, the Memorandum Opinion, did not explicitly indicate that there was an allegation that the respondent signed Dr. Brooks' name to "an offer of purchase or a contract of sale" or that he was alleged to have notarized, as Dr. Brooks' signature, a signature he signed. Nevertheless, as the respondent argues, the opinion does make clear that the gravamen of Dr. Brooks' allegations against the respondent was that the respondent had defrauded him and acted without authority in taking title to property in Dr. Brooks' name. For example, from the Memorandum Opinion supplied by the respondent, it is clear that the respondent purchased property in Dr. Brooks' name and subsequently, still using Dr. Brooks' name, entered into two lease arrangements, the last of which included *705 an option to buy, with a third party. How Brooks viewed the property transaction is made manifest by the federal court's summary of his position:
"Brooks concedes that he filled out some preparatory paperwork in June 1999 for the purpose of assisting Adams to obtain a loan to purchase the Hyattsville property, but says that he lost touch with Adams shortly thereafter and assumed that no further action had been taken. In December 2001, however, he discovered through a loan agent that he was in fact listed as the record owner of the property, which was then in foreclosure. Brooks, therefore, undertook action to clear his credit, but did not, however, pursue a criminal investigation or file a civil suit against Adams."
Brooks' position was stated more clearly in his counterclaim to the respondent's actions. As characterized by the court, Brooks sought "to void the purchase option on the grounds that Adams had no authority to act as his agent and that, in entering into the purchase option with Murray, Adams sought to defraud Brooks of his interest in the property." Finally, the court's discussion of whether Brooks was entitled to summary judgment on the issue of the option to purchase is also relevant. Denying the motion, the court acknowledged that "whether [the respondent] had authority as Brooks' agent to grant the option" was a potential issue at trial.
Moreover, there was in Bar Counsel's reinstatement file a letter from Dr. Brooks, dated June 30, 2003, lodging a "formal complaint" that the respondent had committed "identity theft" against him and, in that regard, specifically accusing the respondent of signing his (Brooks') signature without his knowledge, consent or authorization. Although acknowledging that he participated in some preliminary steps with regard to the purchase of a house and filling out some preliminary paperwork, Dr. Brooks claimed to have lost contact with the respondent for a time, only to learn later that a house in Hyattsville "had been purchased in my name, utilities had also been added at the residence (in my name) and there was an outstanding bill which also appeared on my credit report as unpaid." Subsequently, he continued, he became aware that the respondent "had signed my name on several forms (without my knowledge, consent or authorization), and proceeded to a house closing on the Hyattsville property in September 1999! He apparently did so posing as me, because I was completely unaware of these activities." Dr. Brooks further informed Bar Counsel:
"When I received a copy of the application form from Countrywide, I became fully aware of the extent of the identity theft. Mr. Adams had not only forged my name, he had rented the property (with me as the `owner' and him acting as agent). To my knowledge, the property is still occupied. I have in no way benefitted from this property, and until December 2001, had no knowledge of being its `owner.' There are forms enclosed where he appears to have signed my name and notarized them himself."
On this record, Bar Counsel was fully aware, or should have been, of the nature and gravity of the allegations being made against the respondent in the federal litigation. From the record, it is clear that the respondent was being charged by Brooks with defrauding him, by stealing his identity, by acting on his behalf for the purchase of real property without authorization and by signing his name without his consent, knowledge or authorization. Viewed from this perspective, even without knowing the precise method by which the defrauding was accomplished, Bar Counsel *706 had the "true facts" in advance of the entry of the order reinstating the respondent. What was relevant and material was the alleged scheme and its implementation. How it was to be accomplished, precisely, while relevant, was not material.
Bar Counsel does not agree. He believes that how the fraud was committed is material and implicitly, if not expressly, that the federal trial judge's factual findings on the merits, after trial, are the measure, and therefore, dispositive, of whether the respondent adequately disclosed. That cannot be right. Neither party in litigation is expected to predict the outcome of the trial in which they are parties; neither are they required to guess, really, speculate, how the trier of fact will resolve the contested issues. As the respondent points out, when he was reinstated, the Court had been apprised, as had Bar Counsel, of the pending litigation in federal court, including its nature. Although the respondent anticipated that the case would settle, it did not and, indeed, the case was not resolved by trial until several months after the respondent had been reinstated. The respondent is correct, the findings of fact on the merits, even if they were final and not subject to appeal, could not render disclosures, adequate when made, incomplete and subsequently inadequate.
By parity of reasoning, parties to litigation that terminates in a contested trial are not obliged, in any event, to acquiesce in findings made by a trial judge after a contested trial. Indeed, the appellate process exists to allow the party aggrieved by the findings to challenge them. Thus, even were we to hold that, for purposes of Rule 16-781(m), the true facts are those found by a trial judge after trial, it would not result in the vacation of reinstatement unless the findings were made before reinstatement and the respondent did not inform the Court or Bar Counsel of that fact.
Accordingly, Bar Counsel's Motion to Revoke the Respondent's Reinstatement is denied.
IT IS SO ORDERED.
HARRELL, BATTAGLIA and RAKER, JJ., Concur.
Concurring Opinion by HARRELL, J., which BATTAGLIA and RAKER, JJ., join.
Although I agree with the Majority opinion, I write separately to note my view that, although Bar Counsel may not have persuaded the Court to vacate Adams's reinstatement under Rule 16-781(m), Bar Counsel is not foreclosed from initiating a new investigation and disciplinary action (if appropriate) as to alleged misconduct (if any) by Adams relating to the transactions involving Brooks occurring after the date of the Court's 11 April 2007 order of reinstatement.
Judges BATTAGLIA and RAKER have authorized me to state that they join in the views expressed in this concurrence.
NOTES
[1] By Order of this Court, dated August 6, 1998, Lester A.D. Adams, was suspended from the practice of law indefinitely, but with the right to apply for reinstatement after one year. The conduct underlying the suspension related to the management of his attorney trust account and consisted of his violation of sections (a) and (b) of Rule 1.15 of the Maryland Rules of Professional Conduct, as adopted by Maryland Rule 16-812, and Maryland Rule 16-607(a). See Attorney Grievance Comm'n v. Adams, 404 Md. 1, 2, 944 A.2d 1115 (2008).
[2] Maryland Rule 16-781(i) provides:
"Further proceedings. If the Court of Appeals orders further proceedings, the Court shall enter an order designating a judge in accordance with Rule 16-752 to hold a hearing. The judge shall allow reasonable time for Bar Counsel to investigate the petition and, subject to Rule 16-756, take depositions and complete discovery. The applicable provisions of Rule 16-757 shall govern the hearing, including the requirement that the petitioner shall have the burden of proving the averments of the petition by clear and convincing evidence. The applicable provisions of Rules 16-758 and 16-759, except section (c) of Rule 16-759, shall govern any subsequent proceedings in the Court of Appeals. The Court may order (1) reinstatement, (2) dismissal of the petition, or (3) a remand for further proceedings."
When read in context with section (h), which references this section (i), it seems clear that the further proceedings contemplated are those ordered in connection with a reinstatement petition, rather than those to be ordered after reinstatement, on a motion to vacate.
[3] Bar Counsel advised the Court:
"Still pending is litigation in the United States District Court for the District of Maryland with trial set for July 10, 2007. The Petitioner advises that he anticipates the parties will be able to settle the matter without a trial. It involves a claim by the Petitioner against a Christopher A. Brooks and a counter claim by Mr. Brooks against the Petitioner involving investment in a piece of property in Hyattsville, Maryland."
[4] Rule 16-781(m) provides:
"Motion to vacate reinstatement. Bar Counsel may file a motion to vacate an order that reinstates the petitioner if (1) the petitioner has failed to demonstrate substantial compliance with the order, including any condition of reinstatement imposed under Rule 16-760(h) or section (j) of this Rule or (2) the petition filed under section (a) of this Rule contains a false statement or omits a material fact, the petitioner knew the statement was false or the fact was omitted, and the true facts were not disclosed to Bar Counsel prior to entry of the order. The petitioner may file a verified response within 15 days after service of the motion, unless a different time is ordered. If there is a factual dispute to be resolved, the court may enter an order designating a judge in accordance with Rule 16-752 to hold a hearing. The judge shall allow reasonable time for the parties to prepare for the hearing and may authorize discovery pursuant to Rule 16-756. The applicable provisions of Rule 16-757 shall govern the hearing. The applicable provisions of Rules 16-758 and 16-759, except section (c) of Rule 16-759, shall govern any subsequent proceedings in the Court of Appeals. The Court may reimpose the discipline that was in effect when the order was entered or may impose additional or different discipline."
[5] In the federal trial, the trial court ruled against the respondent with regard to his authority to enter a real property transaction on Mr. Brooks' behalf, finding his testimony not to be credible, while finding Mr. Brooks to be credible. The respondent disagrees with the findings, which he stated he fully intended to challenge on appeal.
[6] The trial judge also found:
"Mr. Adams admits that he signed Dr. Brooks' name to the deed of trust and the deed of trust note and then notarized those signatures by signing his own name' although less serious, Mr. Adams also notarized Dr. Brooks's genuine signature on the first time home buyer declaration, even though he had not seen Dr. Brooks sign the paper, and placed an incorrect date on the notary certification."
[7] The issue in Attorney Grievance Comm'n v. Adams, 404 Md. 1, 944 A.2d 1115 (2008) was a different one, who may move to vacate an Order of Reinstatement. Although we commented on the grounds, that was not our holding.
[8] The Rule does not unambiguously place the onus on the petitioner for reinstatement to reveal the true facts to Bar Counsel, it simply provides that "true facts were not disclosed to Bar Counsel prior to entry of the order." Certainly when the petition for reinstatement does not disclose the true facts, the nondisclosure aspect of the Rule has been satisfied.
[9] We have noted the relationship between "relevance" and "materiality." In Wilson v. Morris, 317 Md. 284, 291, 563 A.2d 392, 395 (1989), for example, we pointed out:
"`Evidence is relevant if it has any tendency to make [the] existence of a material fact more probable or less probable than it would be without the evidence. A material fact is a fact that is of legal consequence to the determination of the issues in the case.' 5 L. McLain, [Maryland Practice: Maryland Evidence] § 401.1, at 261; C. McCormick, Evidence § 185, at 541 (E. Cleary 3rd ed.1984)."
See also Maryland Rule 5-401, which defines "relevant evidence" as "evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." We have defined "material fact" as one "the resolution of which will somehow affect the outcome of the case." Goodwich v. Sinai Hosp., 343 Md. 185, 206, 680 A.2d 1067, 1078 (1996), quoting King v. Bankerd, 303 Md. 98, 111, 492 A.2d 608, 614 (1985) (citing Lynx, Inc. v. Ordnance Products, 273 Md. 1, 7-8, 327 A.2d 502, 509 (1974)).
In the case sub judice, the fact that the respondent was alleged to have defrauded Dr. Brooks, which also was the subject of a lawsuit in federal court, certainly is both relevant and material to the respondent's petition for reinstatement. How the defrauding was done the means of its effectuation is relevant, as well, but it may not be material; it may or may not be "of legal consequence to the determination of the issues in the case." Stated differently, how the fraud was done may have consequence insofar as determining an appropriate sanction is concerned, but it does not matter insofar as culpability is concerned. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537232/ | 979 A.2d 52 (2009)
Richard HOLZSAGER, et al., Petitioners,
v.
DISTRICT OF COLUMBIA ALCOHOLIC BEVERAGE CONTROL BOARD, Respondent.
Safeway, Inc., Intervenor.
No. 07-AA-1239.
District of Columbia Court of Appeals.
Argued April 7, 2009.
Decided August 27, 2009.
*54 Richard Holzsager, pro se.
Richard S. Love, Senior Assistant Attorney General, with whom Peter J. Nickles, Acting Attorney General for the District of Columbia at the time the brief was filed, Todd S. Kim, Solicitor General, and Donna M. Murasky, Deputy Solicitor General, were on the brief, for respondent.
Jerry A. Moore III, with whom Meredith L. Boylan, Washington, DC, was on the brief, for intervenor.
Before WASHINGTON, Chief Judge, KRAMER and THOMPSON, Associate Judges.
THOMPSON, Associate Judge:
By a pro se Petition for Review filed on November 16, 2007, Richard Holzsager, Sarah Green, Ruth Foster, and Ophelia Cowan sought review of an order of the District of Columbia Alcoholic Beverage Control Board ("the Board") granting a license to Safeway, Inc. ("Safeway") to sell beer and wine at its grocery store branch located at 6500 Piney Branch Road, N.W. ("the Piney Branch Road store").[1] We *55 uphold the Board's decision to grant the license.
I.
The parties agree on the sequence of events leading to this appeal. On May 12, 2003, Safeway applied to the Board for a Class B retailer's license for the Piney Branch Road store. At the time, District of Columbia law provided two routes by which members of the community could formally oppose an application seeking a new liquor license: (1) by lodging a protest with the Board (see D.C.Code § 25-601 (2001), amended by D.C. Law 16-191, § 47(a) (2007)); and (2) by petitioning the Board to authorize the initiation of a referendum process (see D.C.Code §§ 25-603-608 (2001), repealed by Omnibus Alcoholic Beverage Amendment Act of 2004, D.C. Law 15-187 § 101 (2004)). D.C.Code § 25-603(a) provided that "the Board shall deny an application for a new license . . . upon receiving valid written objections from the majority of registered voters residing within a 600-foot radius of the establishment to be licensed." Seven District of Columbia residents (including petitioner Foster) filed a referendum petition in opposition to Safeway's application. In addition, petitioner Green represented a group of residents who filed a protest to Safeway's application pursuant to D.C.Code § 25-601 (2001).[2] On July 23, 2003, the Board decided to hold the protest in abeyance until resolution of the referendum process.
On December 15, 2003, with the Board having authorized initiation of the referendum process, Mr. Holzsager, Ms. Green and other volunteers began the process of collecting signatures from registered voters who resided in the relevant area and who objected to Safeway's application. On January 24, 2004, petitioners submitted to the Board petitions bearing 269 signatures. As reported by the District of Columbia Board of Elections and Ethics, the number of registered voters residing in the relevant area was 617. Thus, the number of petition signatures was less than a majority of eligible registered voters as reported by elections officials. However, in a memorandum dated March 17, 2004, Alcoholic Beverage Regulation Administration Program Manager Laura Byrd advised the Board that, once adjustments were made for registered voters who had moved away, died, or been double-counted, there were only 506 eligible registered voters in the relevant area, meaning that 254 or more signatures would suffice for a majority. According to Byrd's memorandum, the submitted petitions included 269 "valid signatures."
On April 1, 2004, Safeway filed a challenge to the validity of the signatures pursuant to D.C.Code § 25-607 (2001). The Board scheduled a hearing on Safeway's challenge for June 30, 2004, but, at petitioners' request, rescheduled it for July 28, 2004. During the July 28, 2004 hearing, Safeway objected to the validity of the referendum petitions on a variety of grounds. Safeway took issue with the Alcoholic Beverage Regulation Administration Program Manager's recommendation that the Board rely on a number of registered voters that differed from the number reported by the Board of Elections and Ethics. Safeway also argued that some petition circulators had, in violation of then-applicable regulations (23 DCMR *56 §§ 1701, 1702.2(f), 1704.1 (1988)), failed to indicate in their affidavits whether they had received compensation for circulating the petition, failed to require each signer to print his or her name alongside his or her signature, and materially altered the petition. In addition, Safeway challenged the reliability of statements that petition circulators had obtained from persons who reported that registered voters shown on the Board of Elections and Ethics list had moved away or had died. At the end of the hearing, the Board closed the record to further submissions from the parties, and took the matter under advisement.
Meanwhile, on June 23, 2004, the Council of the District of Columbia had passed the Omnibus Alcoholic Beverage Amendment Act of 2004, D.C. Law 15-187 (the "Act"), with an effective date of September 30, 2004. The Act repealed D.C.Code §§ 25-603 through 25-608, thereby eliminating the referendum process as a means of challenging license applications. See D.C. Law 15-187, § 101(y); 51 D.C.REG. 9798 (Oct. 22, 2004). On February 1, 2006, with the Board still not having issued a decision on Safeway's challenge to the referendum petition or on Safeway's license application, Safeway filed a motion to dismiss the referendum petition on the basis of the Act. The Board dismissed the referendum petition on July 12, 2006,[3] stating that, in light of the change in the law, it "no longer possess[ed] jurisdiction" to deny a license on the basis of the referendum petition.[4]
Subsequently, the Board held hearings on the pending protest, during which multiple witnesses testified regarding the community-safety, quality of life, economic, and other implications of authorizing Safeway to sell wine and beer at the Piney Branch Road store. On September 20, 2007, the Board granted Safeway's license application subject to certain conditions. The Board declined to reconsider its decision.
II.
The primary issue on before us is whether the Board erred in dismissing the referendum petition on the basis of the Act, specifically, the Act's abolishment of the referendum process effective September 30, 2004. In determining whether the Board properly applied this change in the law to the referendum that was pending, we must begin by asking whether, in making this change, the Council of the District of Columbia "expressly prescribed the statute's proper reach." Landgraf v. USI Film Prods., 511 U.S. 244, 280, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994). If the Council did so, "there is no need to resort to" rules of construction about whether a statute should be applied to pending cases *57 or given retroactive effect.[5]Id. If, however, the "statute contains no such express command," we must determine whether applying it to a pending case "would have retroactive effect, i.e., whether it would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to transactions already completed." Id. If a statute truly would have retroactive effecta matter that is not always easy to determine[6]the "traditional presumption teaches that it does not govern absent clear [legislative] intent favoring such a result." Id. Stated differently, the foregoing principles dictate that "the law in effect at the time a decision is rendered shall not be applied where `doing so would result in manifest injustice or there is statutory direction or legislative history to the contrary.'" Scholtz P'ship v. District of Columbia Rental Accommodations Comm'n, 427 A.2d 905, 914 (D.C.1981) (quoting Bradley v. Richmond Sch. Bd., 416 U.S. 696, 711, 94 S.Ct. 2006, 40 L.Ed.2d 476 (1974)).
In Bradley, the Supreme Court instructed that, to evaluate whether a litigant is likely to suffer manifest injustice from the application of an intervening change in the law to a pending case, courts must consider: "(1) the nature and identity of the parties, (2) the nature of their rights, and (3) the nature of the impact of the change in law upon those rights." Bradley, supra, 416 U.S. at 717, 94 S.Ct. 2006. We applied the factors prescribed by Bradley in Scholtz, supra. We explained first that, in cases between private individuals, involving legislation that "purely affects the individual rights of two private parties vis a vis one another," a court "ought to struggle greatly to avoid a construction of the law which would affect the rights of the parties." Scholtz, supra, 427 A.2d at 915 (citing United States v. Schooner Peggy, 5 U.S. (1 Cranch) 103, 110, 2 L.Ed. 49 (1801)). However, in matters where one of the parties is a public entity charged with administering a regulatory program for the benefit of a community that includes the adverse parties, where the new legislation "is intended to redound to the benefit of all," and where the litigation involves a "great local concern," the general rule is that "the law in effect shall be given force." Id. at 915. In considering the nature of the rights affected by a change in the law, we recognized, a court "must refrain from applying an intervening change to pending petitions where to do so *58 would violate a right which had matured or become unconditional." Id. (citing Bradley, supra, 416 U.S. at 720, 94 S.Ct. 2006). We observed that a right "may reach this important plateau in any of four ways: (1) by the existence of a savings clause in the intervening legislation, (2) by judgment, (3) by statutory right, and (4) by ownership of property." Id. Finally, with respect to the impact of the new law on the rights of parties, the fact that the new law merely "alter[s] the procedure" by which a petitioner may obtain its objectives weighs in favor of applying the new law, unless "petitioners have reasonably and significantly altered their circumstances in reliance on the prior law." Id. at 918, 919; see also Duvall v. United States, 676 A.2d 448, 450 (D.C.1996) ("laws which provide for changes in procedure may properly be applied to conduct which predated their enactment").
If a new statutory enactment is ambiguous as to the legislature's intent, and applying it to pending cases would not have a truly retroactive effect or result in manifest injustice, courts will defer to the responsible administrative agency's interpretation of the reach of the statute "so long as it `represents a reasonable accommodation of conflicting policies that were committed to the agency's care by the statute. . . .'" General Motors Corp. v. National Highway Traffic Safety Admin., 898 F.2d 165, 172 (D.C.Cir.1990) (quoting Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 845, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)). Because the Board is charged with "administer[ing] and enforc[ing] the provisions of Title 25 of the D.C.Code, id., § 25-201(b), we accord "great weight" to the Board's construction of ambiguous provisions of that statute. Coumaris v. District of Columbia Alcoholic Beverage Control Bd., 660 A.2d 896, 902 (D.C.1995). Thus, we will defer to and uphold the Board's interpretation of Title 25 and legislative enactments affecting it as long as the interpretation "is reasonable and not plainly wrong or inconsistent with [the] legislative purpose." Id. at 899.
III.
Applying the principles set out above, we are satisfied, for several reasons, that the Board did not err in concluding that it was required to dismiss the referendum petition in light of the Act.
A.
To begin, although neither the Act nor its legislative history states specifically that the repeal of the referendum provisions (D.C.Code §§ 25-603-608) would require dismissal of any referendum petition that was already pending before the Act's effective date, the Council did specify, in the Act's prefatory statement, that a purpose of the Act was "to repeal the referendum process in all circumstances." D.C. Law 15-187, 51 D.C.REG. 6525 (July 2, 2004) (italics added). We have not previously held that a statement of purpose contained in such prefatory language is a clear indication of the legislative intent. Here, however, we think the prefatory language conveys the Council's intent to eliminate the referendum process without qualification, even as to petitions already circulated and pending before the Board, because no other meaning of the phrase "in all circumstances" suggests itself.
Petitioner Holzsager argues that this was not the Council's intent, as shown by a March 20, 2006 letter to the Board from then-Council Member Adrian Fenty, urging the Board not to dismiss the referendum petition relating to a license for Safeway's Piney Branch Road store because of passage of the Act. The short answer to this argument is that "post-enactment *59 commentaries warrant scant consideration in discerning legislative intent." Qi-Zhuo v. Meissner, 70 F.3d 136, 140 (D.C.Cir.1995) (citing Washington County v. Gunther, 452 U.S. 161, 176 n. 16, 101 S.Ct. 2242, 68 L.Ed.2d 751 (1981) ("We are normally hesitant to attach much weight to comments made after the passage of legislation")).[7] Nevertheless, assuming arguendo that the Council did not focus on whether repeal of the referendum provisions should affect the resolution of pending referendum petitions, we go on to consider the other factors that bear on whether the Act may properly be applied to the referendum proceeding in issue here.
B.
Through the referendum process itself and the ensuing litigation, the petitioners have not sought to enforce a private right that they or the petition signers claim vis-a-vis Safeway, but rather have sought to vindicate the "great local concern" of the community in the vicinity of the Piney Branch Road store with respect to the creation of a new liquor-selling establishment in its midst. Scholtz, supra, 427 A.2d at 915. Cf. Bradley, supra, 416 U.S. at 718, 94 S.Ct. 2006 (explaining that "school desegregation litigation is of a kind different from `mere private cases between individuals,'" such that it is "not appropriate to view the parties as engaged in a routine private lawsuit"). For its part, the respondent Board has acted not in a private capacity (as it might, for example, in a contract or property dispute), but in its role as administrator of the District's alcoholic beverage control program, the over-arching objective of which is "to create a more peaceful and harmonious society." COUNCIL OF THE DISTRICT OF COLUMBIA, COMMITTEE ON CONSUMER & REGULATORY AFFAIRS, Report on Bill 15-516, the Omnibus Alcoholic Beverage Amendment Act of 2004, at 37 (March 9, 2004) (hereinafter "Committee Report"). For these reasons, the "nature and identity of the parties" element of the Bradley analysis favors application of current public policy as reflected in the Act.
C.
Consideration of the "nature of [petitioners'] rights" involved here supports the same conclusion. Petitioners argue that they had "an unconditional statutory right" under the Act to a decision on the merits of their referendum petition. They cite D.C.Code § 25-603(a), which provided that "the Board shall deny an application for a new license . . . upon receiving valid written objections from the majority of registered voters residing within a 600-foot radius of the establishment to be licensed" (italics added). Petitioners also rely on D.C.Code § 25-607, which provided in subsection (a) that "[u]pon receiving completed petitions, the Board shall establish a period of 15 days during which the applicant or any other person may challenge the validity of the signatures" and in subsection (b) that "[w]ithin 15 days after the expiration of the challenge period, the Board shall determine whether the referendum meets the requirements of this chapter for denial of the license application, and if so, shall deny the license application." Petitioners contend that, at the very latest, fifteen days after the Board closed the record following the July 28, 2004 hearing on the referendum petition i.e., by mid-August, 2004, well before the effective date of the Actthe Board was *60 required to determine whether the referendum met the requirements of section 25-603 and, if it did, to deny Safeway's license application. Since the Board made no finding by that time that the referendum petition was deficient, petitioners argue, the Board was required to deny, and petitioners had a statutory right to denial of, Safeway's license application.
This Court applied somewhat analogous reasoning with respect to the claims of one of the parties in Scholtz, supra, 427 A.2d 905, a case involving application of the District's rent-control laws. One of the landlords involved in the case had filed its so-called "hardship petition," for a rent increase pursuant to provisions of the Rental Accommodations Act of 1975,[8] approximately three months prior to that statute's March 16, 1978 expiration date. Id. at 913. Although the 1975 statute required the Rent Administrator to render a decision on such petitions within sixty days after they were filed, the Rent Administrator failed to act until about four months after the sixty-day deadline (approving the hardship petition, but at a lower level than that requested by the landlord). Id. at 913, 917. Because the Council had, by that time, replaced the 1975 statute with the Rental Accommodations Act of 1977, the Rental Accommodations Commission reversed the Rent Administrator's decision, and subjected the landlord to the less favorable conditions for hardship increases established by the new statute. Id. at 909, 913. We observed that, when the landlord filed his petition more than sixty days before the effective date of the new law, the landlord "became unconditionally entitled to a decision" while the old law was in effect, and had a "vested . . . right to [a] decision under the provisions of the previous law. Id. at 917. We held that because the landlord's right to a decision had "vested" before expiration of the 1975 statute, the agency's decision to apply the 1977 Act was manifestly unjust. Id. at 917.[9]
There is an important difference between the facts that led us to our conclusion in Scholtz and the facts of this case. The statute at issue in Scholtz provided that decisions on hardship petitions were to be made within sixty days after the petition was filed "unless an extension of time is approved in writing, by both the landlord and tenant of such rental unit or by the [Rental Accommodations] Commission" language that conveyed the otherwise mandatory nature of the sixty-day deadline.[10]Id. at 917. By contrast, D.C.Code § 25-607(b) ("Within 15 days after the expiration of the challenge period, *61 the Board shall determine whether the referendum meets the requirements of this chapter for denial of the license application, and if so, shall deny the license application"), contains no additional language that indicates that the deadline it imposes is mandatory rather than directory. That is significant, because this Court presumes that a statute is directory rather than mandatory if, like 25-607(b), it "impos[es] a time limit within which a public official must act [but] . . . does not specify the consequences of noncompliance."[11]Teamsters Local Union 1714 v. Public Employee Relations Bd., 579 A.2d 706, 710 (D.C. 1990); see also Washington Hosp. Ctr. v. District of Columbia Dep't of Employment Servs., 712 A.2d 1018, 1019-20 (D.C. 1998).[12]
Further, notwithstanding the language in D.C.Code § 25-607(b) that the Board "shall deny" a license application if it determines "within 15 days after the expiration of the challenge period" that a referendum "meets the requirements of this chapter," D.C.Code § 25-607(c) (added to Title 25 in 1992) contained a provision that imposed a further condition on the success of a referendum petition. Section 25-607(c) stated that "[i]f the Board determines at any time that proponents, circulators, or signers of a petition acted due to motives that are inconsistent with the limitations set forth in § 25-604[13] or any other *62 provision of law, the Board shall declare the petition void." D.C.Code § 25-607(c) (italics added). This provision did more than simply mirror rules, such as those of many government agencies and courts,[14] that permit the rescission of benefits obtained through fraud or misrepresentation, because it gave the Board the authority to invalidate referendum petitions on the basis of "motives" that did not necessarily involve fraud. An examination of the pertinent legislative history reveals that, in enacting 25-607(c), the Council was aware that the new provision might threaten or erode the viability of the referendum process as a route to blocking the issuance of liquor licenses, but chose to tolerate that possibility. The Council explained that the new provision:
would require nullification of an improperly-motivated petition whenever the Board discovers that the motive was inconsistent with the law. If a license had already been denied on the basis of the petition, the nullification would allow the application to be reconsidered. . . .
For example, nullification would be required if the Board received evidence that petitioners moved against a license applicant because the applicant refused to provide personal benefits they had sought. Even though the petition statement may have listed reasons consistent with the appropriateness standards, if the Board determines that the denial of personal benefits was the true motive, the Board would be required to nullify the petition.
COUNCIL OF THE DISTRICT OF COLUMBIA, COMMITTEE ON CONSUMER & REGULATORY AFFAIRS, Report on Bill 9-125, the Alcoholic Beverage Control Amendment Act of 1992, at 11 (March 12, 1992). The Council adopted section 25-607(c) notwithstanding oral testimony and written statements warning that it would present a "danger that a licensee can use an alleged impropriety with regard to one signature to void a[n] opposing petition," and that neighborhoods would face a substantial burden if "they had to ensure that the motives of all signers and proponents were pure lest the entire petition be invalidated."[15] This history informs our view that, at least after the 1992 amendments to Title 25, the statute governing the referendum process did not create any "unconditional" or "vested" rights for its participants.
D.
Consideration of the impact of the change in law upon the parties' rights also favors application of the current law. The Act deprived petitioners of the ability to *63 defeat Safeway's license application through the referendum process, but it left them able to voice their objections through the protest process. Petitioners participated in that process and the Board considered their objections before it ruled on Safeway's application (and imposed on Safeway conditions apparently designed to take into account many of the objections).[16] At the same time, repeal of the referendum provisions "did not alter the Board's. . . responsibility" and its "substantive obligation[,]" Bradley, supra, 416 U.S. at 721, 94 S.Ct. 2006, to disapprove the Safeway application if it found that an alcoholic beverage license was inappropriate for the location. See D.C.Code § 25-313(a). Moreover, as far as we can tell, petitioners have not "reasonably and significantly altered their circumstances in reliance on the prior law." Scholtz, supra, 427 A.2d at 919; see also Bradley, supra, 416 U.S. at 721, 94 S.Ct. 2006.[17] "Accordingly, upon considering the parties, the nature of the rights, and the impact of [the Act] upon those rights, it cannot be said that the application of the statute to [a referendum petition submitted] prior to its effective date, in an action pending on that date, would cause `manifest injustice.'" Bradley, supra, 416 U.S. at 721, 94 S.Ct. 2006.
E.
Finally, we consider whether the Board's interpretation that the Act required it, in essence, to halt the referendum petition in its tracks was "reasonable and not plainly wrong or inconsistent with [the] legislative purpose." Coumaris, supra, 660 A.2d at 899. We have said that our "judicial deference [to an agency interpretation of its governing statute] is at its zenith when an administrative construction of a statute has been consistent and of long standing." Id. at 900. Application of that maxim here somewhat undermines our deference for the Board's interpretation because, although the Board undoubtedly was aware of the Act when it was still a bill and upon its passage and effective date, the Board waited more than two years after it was passed and almost two years after its effective date, before it determined that the Act required dismissal of the referendum petition. That said, the Board's interpretation is consistent with the legislative intent. The Committee Report accompanying the bill that became *64 the Act explains that the referendum process had been "extremely divisive in neighborhoods where it has been done," creating "nothing but strife and confusion," and that "the referendum process must be removed to ensure that the goals of ABC regulation can be achieved." Committee Report at 37. The Board quoted this language in explaining its conclusion that dismissal was required. In light of the Council's express remedial intent, we cannot say that the Board acted unreasonably in determining that the Act must be given effect even as to the pending referendum. See Landgraf, supra, 511 U.S. at 264 n. 16, 114 S.Ct. 1483 ("remedial statutes are to be liberally construed and if a retroactive interpretation will promote the ends of justice, they should receive such construction") (citation, brackets, and internal quotations marks omitted); see also id. at 285, n. 37, 114 S.Ct. 1483 ("We have sometimes said that new `remedial' statutes, like new `procedural' ones, should presumptively apply to pending cases"). We therefore affirm the Board's order dismissing the referendum petition.
IV.
Petitioners' second contention is that the Board's decision to grant Safeway's license to sell alcoholic beverages at the Piney Branch Road store violated the Act's ban on issuance of new liquor licenses to establishments located in Ward 4 of the District. See D.C.Code § 25-340 (Supp.2009).[18] This argument is without merit. By its express terms, the Act's Ward 4 ban did not apply to any application for a new license that was pending on September 30, 2004. Id. (brackets omitted). Since the Board had not granted or denied Safeway's May 2003 license application as of September 30, 2004, but instead had taken the matter "under advisement," the application was pending as of September 30, 2004, and thus was exempt from the ban.[19]
For the foregoing reasons, we affirm the decision of the Board dismissing the referendum petition and granting Safeway's license application.
So ordered.
NOTES
[1] Although Mr. Holzsager, Ms. Green, Ms. Foster and Ms. Cowan all signed the Petition for Review, only Mr. Holzsager's signature appears on the Brief for Petitioner and only the names of Mr. Holzsager, Ms. Green and Ms. Foster are listed in the opening brief as petitioners. Intervenor Safeway notes in its brief that Mr. Holzsager is not an attorney and may not represent anyone other than himself in this proceeding. Because the question of who (if anyone) other than Mr. Holzsager remains a petitioner need not be answered to resolve the issues before us, we do not address the issue further.
[2] Advisory Neighborhood Commission 4B also filed a protest to the license application, but subsequently withdrew its protest.
[3] Referendum volunteers sought review by this Court in August 2006, but we dismissed the petition as premature because the protest proceeding remained pending before the Board.
[4] While it is clear that the Act eliminated the referendum process as a mechanism for opposing the issuance of liquor licenses, the Board spoke with imprecision in saying that the Act constricted its "jurisdiction." An agency has "subject matter jurisdiction" over a case if it has "authority," pursuant to a legislative act, "to adjudicate the type of controversy presented by the case." Davis & Assocs. v. Williams, 892 A.2d 1144, 1148 (D.C.2006). A jurisdictional amendment "changes the tribunal that is to hear the case." Hamdan v. Rumsfeld, 548 U.S. 557, 577, 126 S.Ct. 2749, 165 L.Ed.2d 723 (2006) (quoting Hallowell v. Commons, 239 U.S. 506, 508, 36 S.Ct. 202, 60 L.Ed. 409 (1916)). In the wake of the Act, the Board retained authority to "adjudicate the type of controversy presented by [this] case," namely, whether a particular establishment should receive authorization to sell wine and beer. Davis, supra, 892 A.2d at 1148.
[5] As we observed in District of Columbia v. Beretta U.S.A. Corp., 940 A.2d 163 (D.C.2008), retroactive civil legislation is subject to only "modest" constitutional limits. Id. at 179 (quoting Landgraf, supra, 511 U.S. at 272, 114 S.Ct. 1483). Accordingly, where the legislature has determined to give retroactive effect to a new law that it considers salutary, "[a]ctions. . . that are still pending and have not been reduced to judgment raise no concern with applying a `new provision [that] attaches new legal consequences to events completed before its enactment.'" Beretta, 940 A.2d at 177 (quoting Landgraf, 511 U.S. at 270, 114 S.Ct. 1483). In such cases (as opposed to cases that "have reached final, unreviewable judgment"), Beretta, 940 A.2d at 176, "the legislative determination provides all the process that is due." Id. at 175-76 (quoting Logan v. Zimmerman Brush Co., 455 U.S. 422, 432-33, 102 S.Ct. 1148, 71 L.Ed.2d 265 (1982)).
[6] See Landgraf supra, 511 U.S. at 267, 270 n. 24, 114 S.Ct. 1483 (noting that "deciding when a statute operates `retroactively' is not always a simple or mechanical task," in part because "[e]ven uncontroversially prospective statutes may unsettle expectations and impose burdens on past conduct"; for example, "a new property tax or zoning regulation may upset the reasonable expectations that prompted those affected to acquire property; [and] a new law banning gambling harms the person who had begun to construct a casino before the law's enactment or spent his life learning to count cards").
[7] See also Gersman v. Group Health Ass'n, Inc., 975 F.2d 886, 892 (D.C.Cir.1992) ("More bluntly put, a single member [of the legislature] may be attempting to reassure his own constituency or even to create legislative history for citation by courts").
[8] This 1975 statute "provided that any landlord who had not obtained an 8% rate of return after an automatic rent increase could file a hardship petition to obtain an increase sufficient to raise his rate of return to the 8% level." Scholtz, supra, 427 A.2d at 910.
[9] By contrast, we affirmed the application of the 1977 Act to three other landlords' hardship petitions because these landlords filed their petitions fewer than sixty days before the expiration of the 1975 Act. See Scholtz, supra, 427 A.2d at 918. Because these landlords were not entitled to a decision on their petitions before the March 16, 1978 expiration date of the 1975 Act, we explained, they had no "vested right to the procedures contained" in the earlier act.; the landlords' "mere expectation based on the anticipated application of existing law" did not justify departing from the general principle that "an administrative agency must apply the law in effect at the time of its decision in order to avoid sanctioning illegal conduct." Id. at 914.
[10] Moreover, the provision was given added force by this Court's mandate, in Apartment & Office Bldg. Ass'n of Metro. Washington v. Washington, 343 A.2d 323, 333 (D.C.1975), that the District government "adopt and implement means of affording reasonably prompt vindication of [landlords'] cost pass-through right." Apartment & Office Bldg. Ass'n of Metro. Washington v. Moore, 359 A.2d 140, 141 (D.C.1976).
[11] True, we have also said that "[d]elay coupled with actual prejudice," may overcome the presumption that statutory time limits on agency action are non-binding. Spicer v. District of Columbia Real Estate Comm'n, 636 A.2d 415, 418 (D.C.1993) (citing In re Williams, 513 A.2d 793, 796-97 (D.C. 1986)). Cf. Teamsters Local Union 1714, supra, 579 A.2d at 711 (explaining that the court must conduct a "balancing test to determine whether any prejudice caused by agency delay is outweighed by the interests of another party or the public in allowing the agency to act after the statutory time period has elapsed") (citation omitted). However, this exception to the general rule does not assist us in resolving the issue before us because petitioners cannot show that the Board would have rejected Safeway's challenge to the referendum, and determined that the referendum petition met the requirements of law, if the Board had actually resolved the issues within fifteen days after the close of the July 28, 2004 hearing and before the Act went into effect. 2004. Thus, petitioners' situation is different from that of the landlord in Scholtz discussed above, because in that case the Rent Administrator had actually determined that the landlord made the showing necessary for a hardship increase under the old law; the problem was that the Rent Administrator issued his decision belatedly, after the new law had gone into effect. See 427 A.2d at 913.
[12] We note in addition that, after the enactment of section 25-607 in 1987 (see District of Columbia Alcoholic Beverage Control Act Reform Amendment Act of 1986, D.C. Law 6-217 (1987), 34 D.C.REG. 2150 (Feb. 6, 1987)), the Board adopted regulations to implement the statute. See 35 D.C.REG. 5084 (June 24, 1988). 23 DCMR § 1705.4 provided that "within fifteen (15) calendar days from the end of the challenge period," the Board "shall. . . determine whether the challenged petition signatures are valid." Without reference to a fifteen-day deadline, 23 DCMR § 1706.2 provided that "[w]hen the approved signatures on the petitions demonstrate that a majority of the registered voters object to the granting of the license sought, the Board shall deny the license." Thus, the Board's regulations divorced the Board's determination with respect to "a majority of the registered voters" from the fifteen-day deadline for determining whether "signatures are valid." Because the approach these regulations take is difficult to square with the statutory language, we do not rely on the regulations for the conclusion we reach here (even though, ordinarily, the interpretation reflected in the regulation would be entitled to "great weight [as] the contemporaneous interpretation of a challenged statute by an agency charged with its enforcement," Bankamerica Corp. v. United States, 462 U.S. 122, 130, 103 S.Ct. 2266, 76 L.Ed.2d 456 (1983)).
[13] Section 25-604 required that the "basis for [an] objection" to a license application "shall be the reason that the issuance of the license does not meet one or more of the appropriateness standards as set forth in §§ 25-313 (2001) [relating to the appropriateness of the establishment for the location, or the effect on real property values, peace, order, quiet, parking, and pedestrian safety], 25-314 (2001) [relating to the proximity of the establishment to places such as schools, recreation centers, day care centers, libraries, and similar facilities], 25-315 (2001) [relating to the record of compliance of a licensee seeking renewal of its license], and 25-316 (2001) [relating to the qualifications of an applicant seeking the transfer of a license]."
[14] See, e.g., Miranda v. Contreras, 754 A.2d 277, 281 (D.C.2000) ("a judgment secured by misrepresentations by one counsel to another. . . warrant[s] relief" from the judgment); Branch v. District of Columbia Dep't of Pub. & Assisted Hous., 661 A.2d 1102, 1103 n. 2 (D.C. 1995) (noting that public housing benefits obtained through fraudulent means must be terminated).
[15] Testimony of Robert Teir, Amer. Alliance for Rights & Responsibilities, and Statement of Charles R. Braun, Comm'r, on Bill 9-125, the "Alcoholic Beverage Control Amendment Act of 1991," before the Council of the District of Columbia, Committee on Consumer & Regulatory Affairs, April 26, 1991 (emphasis in the original).
[16] The Board ordered that, as a "term of [its] license," Safeway would be required to (1) train cashiers on preventing the sale of liquor to minors; (2) refrain from posting advertisements for alcohol in its parking lot or on public space; (3) post signs on its premises regarding the minimum drinking age and the dangers of alcohol consumption during pregnancy; (4) confine its beer and wine products to certain aisles within its store; (5) place and maintain two large trash receptacles in front of its store; (6) pick up trash on its premises on a daily basis; (7) maintain 6 A.M. to 12 A.M. hours of operation; (8) operate and maintain a 32-camera electronic surveillance system; and (9) employ at least two security guards for the hours of 6 P.M. to 10 P.M.
[17] Although petitioners represent (and we have no reason to doubt) that they expended considerable time and effort collecting signatures from their neighbors during the cold winter months of December 2003 and January 2004, we cannot say that they incurred "extensive financial expenditures in reasonable reliance on the prior law to the extent that application of the law in effect at the time of decision would create manifest injustice." Scholtz, supra, 427 A.2d at 919; see also Donahue v. District of Columbia Bd. of Psychology, 562 A.2d 116, 123 (D.C.1989) (where petitioner was completing training in a field "related to psychology" at the time the Council revised the District's licensing laws to require a person to have a "degree in psychology" to practice as a psychologist, the denial of petitioner's license application was upheld, because "petitioner's reliance interest is not of sufficient magnitude to warrant protection against application of the `unfair impact' of the new law").
[18] Enacted as section 101(o) of the Act, D.C.Code § 25-340 provides in pertinent part that "[n]o class A or B license shall be issued in or transferred into Ward 4; . . . . This section shall not apply to any application for a new or transferred license pending on [September 30, 2004]."
[19] Although we have noted previously that an agency's unreasonable delay in taking required action may constitute a "denial" permitting judicial review, see Citizens Ass'n of Georgetown, Inc. v. Washington, 291 A.2d 699, 705 n. 15 (D.C. 1972), we have never before treated a delay in approval of a license application as a denial of the application for the purpose of determining whether that application was pending at the time a license moratorium went into effect. Cf. Georgetown Univ. Hospital v. Department of Employment Servs., 659 A.2d 832, 834 (D.C.1995) (emphasizing that statute permitted administrative delay to be treated as a denial "for purposes of appeal" only). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537235/ | 979 A.2d 925 (2009)
In re ADOPTION OF S.B., a Minor,
Appeal of Y.N., Appellant.
No. 1864 WDA 2008
Superior Court of Pennsylvania.
Argued June 10, 2009.
Filed August 14, 2009.
*926 Andrew D. Glasgow, Pittsburgh, for appellant.
Jennifer A. Staley, Pittsburgh, for appellee.
Lisa M. Colautti, Pittsburgh, for CYF, Participating Party.
Laura A. Maines, Pittsburgh, for G., K. and G., S., Participating Party.
BEFORE: MUSMANNO, DONOHUE and SHOGAN, JJ.
OPINION BY MUSMANNO, J.:
¶ 1 Y.N., the biological paternal aunt of S.B. (d/o/b 6/3/97), appeals from the Order of the Orphans' Court denying her Petition to unseal S.B.'s adoption records due to Y.N.'s lack of standing. We affirm, albeit upon a different basis.
¶ 2 The Orphans' Court set forth the underlying facts and procedural history of this case as follows:
This case involves the five-year journey of a child through the child welfare system. On June 18, 2003, the Office of Children Youth and Families (CYF) obtained an emergency custody order for S.B. CYF filed a [P]etition for dependency and on July 30, 2003, [the Orphans' Court] adjudicated the child dependent and ordered that S.B. remain in foster care. [S.B. was placed into foster care with the Appellees in the instant case (hereinafter "adoptive parents")]. On August 16, 2004, after the child had been in care for fifteen months and [his biological] parents had made little or no progress toward remedying the conditions that led to the child's removal and placement, the permanency goal was changed to adoption. Subsequently, on July 1, 2005, [the Orphans' Court] terminated the parental rights of the biological parents of S.B.
After parental rights were terminated, on July 20, 2005, nearly two years after S.B. was adjudicated dependent and nearly a year after the permanency goal was changed to adoption, [Y.N.] presented an [E]mergency [P]etition for special relief, requesting that S.B. be placed with her. Upon presentation, the [Emergency P]etition was scheduled for a hearing on September 7, 2005. On September 7, 2005, after a brief hearing and arguments of counsel, [the Orphans' Court] denied the [Emergency P]etition. Specifically, [the Orphans' Court] found that [S.B.] had been in his pre-adoptive foster home[, i.e., with the adoptive parents,] for nearly two years, that he had never resided with [Y.N.] and was bonded to his foster parents, and that remaining in the home of the foster parents was in the child's best interests.
On September 19, 2005, [Y.N.] filed an appeal of the September 7, 2005 order [denying her Emergency Petition]. The adoption of S.B. was finalized on September *927 20, 2005. On September 26, 2005, [the Orphans' Court] entered an order directing counsel for [Y.N.] to file a concise statement of matters complained of on appeal [pursuant to Pennsylvania Rule of Appellate Procedure 1925(b)]. On December 13, 2005[,] [the Orphans' Court] filed an [O]pinion and requested dismissal of the appeal for failure of [Y.N.] to file a 1925(b) statement. On April 19, 2006[,] the Superior Court entered an order dismissing the appeal.
On September 6, 2005[,] CYF filed a[P]etition for adoption on behalf of S.B. On September 20, 2005, [the Orphans' Court] entered an adoption decree wherein S.B. became the adopted child of [the adoptive parents]. On September 10, 2008, more than three years after this adoption, [Y.N.] presented a[P]etition to unseal [S.B.'s adoption] record[, alleging that the adoptive parents, who are Turkish citizens residing in the United States, had committed a fraud upon the Orphans' Court during the adoption process by misrepresenting their immigration status]. Upon presentation of the [P]etition, a hearing was scheduled for October 20, 2008.
On October 20, 2008, after the hearing on the [P]etition to unseal [S.B.'s adoption] record, [the Orphans' Court] found that [Y.N.] lacked the necessary standing to intervene and to request that the adoption record of S.B. be unsealed. Accordingly, [the Orphans' Court] dismissed [Y.N.'s P]etition. This [timely] appeal follows.
Orphans' Court Opinion, 1/8/09, at 1-3 (footnotes omitted).
¶ 3 On appeal, Y.N. raises the following claims for our review:
I. Whether the [Orphans'] Court misapprehended and/or misapplied the law concerning standing for parties trying to unseal an adoption record[?]
II. Whether the [Orphans'] Court reached an erroneous legal conclusion that Y.N. does not have legal standing to petition the [Orphans'] Court to unseal S.B.'s adoption record[?]
Brief for Appellant at 6.[1]
¶ 4 Our standard of review of Y.N.'s claims is as follows:
We accord the findings of an Orphans' Court, sitting without a jury, the same weight and effect as the verdict of a jury; we will not disturb those findings absent manifest error; as an appellate court we can modify an Orphans' Court decree only if the findings upon which the decree rests are not supported by competent or adequate evidence or if there has been an error of law, an abuse of discretion, or a capricious disbelief of competent evidence.
In re Long, 745 A.2d 673, 674 (Pa.Super.2000) (citation and brackets omitted).
¶ 5 Y.N. contends that the Orphans' Court misapprehended and/or misapplied the law concerning standing for parties trying to unseal an adoption record. See Brief for Appellant at 15-20. Y.N. argues, inter alia, that the Orphans' Court improperly relied upon the wrong subsection of section 2905 of the Adoption Act,[2] governing the impounding of proceedings and access to adoption records, in concluding that Y.N. did not have standing. Id. at 16-17.
¶ 6 Specifically, Y.N. maintains that in its Opinion, the Orphans' Court relied *928 upon 23 Pa.C.S.A. § 2905(b)[3] in determining that "in order for [Y.N.] to have access to sealed records in adoption proceedings, she would have to be a party to the proceedings, an adoptive parent, or a legal guardian of the adoptee." See Brief for Appellant 15-16 (citing Orphans' Court Opinion, 1/8/09, at 4).[4] Based on the fact that Y.N. was not a party to the original dependency case or the adoption case and was not an adoptive parent or legal guardian of S.B., the Orphans' Court concluded that Y.N. had failed to demonstrate that she had standing to unseal S.B.'s adoption records under section 2905. Orphans' Court Opinion, 1/8/09, at 4.
¶ 7 According to Y.N., the Orphans' Court erred in applying section 2905(b), as that subsection, which pertains to supplying limited information to an adoptee about his or her natural parents, is irrelevant to the instant case since neither S.B. nor Y.N. is seeking such information. Brief for Appellant at 16. Y.N. maintains that the relevant provision is 23 Pa.C.S.A. § 2905(a).[5] Brief for Appellant at 17. We agree that the Orphans' Court should have applied section 2905(a).[6]
¶ 8 Section 2905(a) of title 23 provides that records relating to adoption shall be withheld from inspection "except on an order of court granted upon cause shown[.]" Id. (emphasis added); In re Adoption of B.E.W.G. and S-L.W.G., 355 Pa.Super. 554, 513 A.2d 1061, 1065 (1986) (holding that where father who killed his wife had relinquished his children for adoption prior to his conviction, the maternal grandparents of the children, who had legal custody at the time of the adoption, had standing to petition to unseal the *929 adoption records; this Court vacated the Orphans' Court's Order that held the grandparents lacked standing and directed that on remand, the Orphans' Court determine whether the grandparents had shown "cause" under section 2905(a) to unseal the records). Y.N. correctly points out that section 2905(a), unlike section 2905(b), provides no limitations as to who can petition the Orphans' Court to unseal an adoption record; it requires only "cause shown[.]" Brief for Appellant at 17; see In re E.K., 53 D. & C.4th 384, 389 (Pa.Com.Pl.Northampton Cty.2001) (observing that "[s]ection 2905(a) does not preclude non-adoptees from petitioning for unsealing. The legislature recognized that circumstances may arise where good cause could be shown by others.").
¶ 9 The Adoption Act does not provide examples of what qualifies as "cause shown" under section 2905(a). Further, this Court has previously recognized the scarcity of case law guidance regarding the application of section 2905. In re Long, 745 A.2d at 675. In In re Long, this Court remanded to the Orphans' Court an adoptee's Petition to unseal her adoption records for medical reasons (seeking the disclosure of the identity and medical histories of her biological parents for the purpose of treating her legitimate medical issues) to determine whether she had shown cause sufficient to justify release of the information under section 2905(a). In re Long, 745 A.2d at 675. The Court, however, provided the following guidance as to the application of section 2905(a):
We are certain the legislature wrestled long and hard with this complex area before enacting the statute.... The adoptee must show there is good cause[[7]] for unsealing; given the overriding privacy concerns of the adoption process and this statute, we believe this must be shown by clear and convincing evidence. Unsealing these important records is not to be lightly undertaken. The court must consider the ramifications to those specifically affected by that unsealing, including the adoptive and biological parents and their families, as well as the impact on the integrity of the adoption process in general. Only if the adoptee's need for the information clearly outweighs the considerations behind the statute may the records be unsealed.
In re Long, 745 A.2d at 675 (footnote and emphasis added). As the above language indicates, courts apply a very stringent standard in determining whether a petitioner, even an adoptee herself, should be allowed to open sealed adoption records.
¶ 10 Although the Orphans' Court here failed to apply section 2905(a) and rule on whether Y.N. demonstrated cause sufficient to justify unsealing S.B.'s adoption records, we conclude that Y.N. did not show the requisite cause.[8]
¶ 11 Y.N. asserts that the Orphans' Court granted the adoption of S.B. to the adoptive parents based on misrepresentations *930 that they allegedly made to the court during the adoption proceedings. See Brief for Appellant at 7-8, 11-12. Specifically, Y.N. contends that "[m]ost likely, [the adoptive parents] assured the [Orphans'] Court that they would be issued `green cards' (a U.S. permanent resident card) in the near future." Id. at 11 (emphasis added). According to Y.N., "[m]ost likely, [the adoptive parents] failed to inform the [Orphans'] Court that their visas to stay in the U.S. had expired six years earlier on December 31, 1999." Id. (emphasis omitted). Y.N. further sets forth in her appellate brief several other alleged misrepresentations that she speculates the adoptive parents "most likely" made to the Orphans' Court.[9]See id. at 11-12.
¶ 12 Y.N. seeks to unseal S.B.'s adoption records to substantiate the above-mentioned allegations and asserts that the Orphans' Court "would not [have] permit[ted] the adoption[ ] if it knew all of the facts surrounding [the adoptive parents'] very uncertain rights to stay in the United States." Id. at 12. Y.N. states that if S.B.'s adoption records are unsealed and she discovers evidence of fraud upon investigation, she intends to petition the Orphans' Court to vacate S.B.'s adoption; Y.N. indicates that she would thereafter petition to adopt S.B. Id. at 8.
¶ 13 The adoptive parents counter that they legally resided in the United States at all times relevant to the proceedings before the Orphans' Court. Brief for Appellees at 4. The adoptive parents maintain that they entered the United States legally and that at the time of the adoption proceedings in 2005, they had pending a petition that would grant them permanent residence in the United States. Id. at 3-4. According to the adoptive parents, no final order has been issued regarding their immigration status to date. Id. at 4.
¶ 14 Upon our thorough review of the record, we determine that Y.N. has failed to show good cause to unseal S.B.'s adoption records by clear and convincing evidence. See In re Long, 745 A.2d at 675. The requisite cause under section 2905(a) is certainly more than speculative allegations of fraud[10] and requests to open sealed records to conduct a fishing expedition. See In re E.K., 53 D. & C.4th at 389-90 (holding that cause to unseal adoption records was shown by clear and convincing evidence where the adult petitioner sought the identity of his full brother, who was previously placed for adoption by their natural parents, based on the fact that petitioner's only hope for a cure for his terminal cancer was a bone marrow transplant and petitioner's brother provided the best hope for compatible marrow, and *931 thus, petitioner's best hope for life).[11]
¶ 15 At the October 20, 2008 hearing on Y.N.'s Petition to unseal S.B.'s adoption records, the Orphans' Court heard argument from Y.N.'s attorney and his allegations of the fraud that the adoptive parents had purportedly committed on the court. See N.T., 10/20/08, at 6-7, 11-12. At this hearing, the attorney for CYF stated that even if the Orphans' Court addressed the merits of Y.N.'s allegations of fraud, "CYF would be ready and willing to show that the adoption that took place before th[e Orphans'] Court contained no fraud and that it was fully investigated and should be held sacrosanct."[12]Id. at 10. Also, although the Orphans' Court did not invoke the "cause shown" language under section 2905(a) at the hearing when denying Y.N.'s Petition to unseal the records (and largely analyzed the Petition under a standing analysis), a review of the Notes of Testimony reveals that the court did not find that the adoptive parents had committed a fraud on the court. See id. at 12-18.
¶ 16 In reaching our conclusion, we find that the following facts are also persuasive: Y.N. petitioned to unseal the records three years after S.B.'s adoption; S.B. has resided with his adoptive parents for over six years; the Orphans' Court considered Y.N.'s Emergency Petition to intervene prior to S.B.'s adoption and determined that it would not be in S.B.'s best interests to be placed with Y.N. (and this Court dismissed Y.N.'s appeal); Y.N. never filed a petition to adopt S.B. despite being afforded the opportunity to do so; and Y.N. has never had legal or physical custody of S.B.
¶ 17 Based on the foregoing, we conclude that Y.N. has failed to show the requisite cause to unseal S.B.'s adoption records under section 2905(a) of the Adoption Act, and the Orphans' Court thus properly denied Y.N.'s Petition.
¶ 18 Order affirmed.
NOTES
[1] Since Y.N.'s claims are closely interrelated, we will address them simultaneously.
[2] See 23 Pa.C.S.A. § 2905.
[3] Section 2905(b) provides as follows:
(b) PETITION TO COURT FOR LIMITED INFORMATION.Upon petition by any adoptee at least 18 years of age or, if less than 18, his adoptive parent or legal guardian to the court in the judicial district in which the permanent records relating to the adoption have been impounded, the court shall furnish to the adoptee as much information concerning the adoptee's natural parents as will not endanger the anonymity of the natural parents. The information shall first be reviewed, in camera, by the court to insure that no information is revealed which would endanger the anonymity of the natural parents. The court shall, upon motion of the adoptee, examine the entire record to determine if any additional information can safely be revealed without endangering the anonymity of the natural parents.
23 Pa.C.S.A. § 2905(b) (emphasis added).
[4] We note that in its Opinion, the Orphans' Court cited generally to 23 Pa.C.S.A. § 2905 following the above-mentioned sentence referenced by Y.N.; the court did not specifically cite to subsection (b).
[5] Section 2905(a) provides as follows:
(a) GENERAL RULE.All petitions, exhibits, reports, notes of testimony, decrees, and other papers pertaining to any proceeding under this part or former statutes relating to adoption shall be kept in the files of the court as a permanent record thereof and withheld from inspection except on an order of court granted upon cause shown or except as otherwise provided in this section. In the case of an adult adoptee who is assuming a name under section 2904 (relating to name of adoptee), an order of court is not required for the court to forward to the Pennsylvania State Police documentation in accordance with 54 Pa.C.S. § 702 (relating to change by order of court). Any report required to be filed under sections 2530 (relating to home study and preplacement report), 2531 (relating to report of intention to adopt) and 2535 (relating to investigation) shall be made available to parties to an adoption proceeding only after all identifying names and addresses in the report have been extirpated by the court.
23 Pa.C.S.A. § 2905(a).
[6] Although the Orphans' Court did not explicitly state that it based its conclusion that Y.N. lacked standing on subsection (b) of section 2905, it is clear that it did not apply subsection (a), the appropriate provision.
[7] We note that although the In re Long Court uses the language "good cause[,]" section 2905(a) requires "cause shown[.]" See In re B.E.W.G., 513 A.2d at 1065 (suggesting that "cause shown" may be a lower standard than "good cause"). Our review of the limited case law in this area, however, reveals no significant discrepancy between the above-mentioned standards, and that the two are used interchangeably.
[8] It is well-settled that this Court may affirm on any valid basis. See Evans v. Sodexho, 946 A.2d 733, 740, n. 7 (Pa.Super.2008). Accordingly, we address Y.N.'s claims under section 2905(a), and do not affirm on the basis of the Orphans' Court's determination that Y.N. lacked standing.
[9] We note that in support of the above-mentioned allegations of fraud, Y.N. attached as exhibits to her Petition to unseal S.B.'s adoption records several documents regarding removal/deportation proceedings that the Department of Homeland Security apparently initiated against S.B.'s adoptive parents in December 2007, which Y.N. obtained via a request for information under the Freedom of Information Act. See Petition to Unseal Record, 10/20/2008, Exhibits A-E; see also Brief for Appellant at 8 n. 2. Significantly, however, all of these documents post-date the adoptive parents' adoption of S.B. in September 2005. Only one of these documents references a time period prior to the 2005 adoption, providing, inter alia, as follows: "You [i.e., S.B.'s adoptive father] failed to maintain status or to comply with the conditions of your change of status in that on 12/31/1999 your IAP-66 expired." Petition to Unseal Record, 10/20/2008, Exhibit C.
[10] Although we have carefully reviewed all of the documents attached to Y.N.'s Petition to unseal S.B.'s adoption records, none of these documents indicate that S.B.'s adoptive parents had committed a fraud upon the Orphans' Court at any point during the adoption proceedings.
[11] We further note that in the two Superior Court cases discussed above in which this Court remanded to the Orphans' Court to determine whether the petitioners had demonstrated cause sufficient to open the respective adoption records, see In re Long, supra and In re B.E.W.G., supra, the petitioners therein had established a much stronger showing of good cause than Y.N. has in the instant case.
[12] Indeed, in a "Homestudy" report filed by an Adoption Caseworker on behalf of CYF prior to S.B.'s adoption, the Caseworker noted that S.B.'s adoptive father specifically alerted him as to the adoptive parents' immigration status prior to their adoption of S.B. See Homestudy, 9/6/05, at 1-2. Specifically, the Caseworker stated as follows:
[The adoptive father] used his computer and logged on to the internet and showed this [C]aseworker how he is able to track the progress of his family's application for citizenship on the U.S. Citizenship and Immigration Services website. [The adoptive father] believes that his family will be issued green cards in approximately December 2005.
Id. (emphasis added). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/212565/ | [DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
MARCH 17, 2011
No. 10-12615
JOHN LEY
________________________ CLERK
D. C. Docket No. 2:08-cv-00681-CEH-DNF
OCEAN BANK,
a Florida state banking corporation,
Plaintiff-Counter-
Defendant-Appellee,
versus
FIRST FLORIDA BANK,
a Florida state banking corporation,
Defendant-Counter-
Claimant-Appellant.
ROYAL PALM BANK OF FLORIDA,
a Florida state banking corporation,
Defendant-Counter-
Claimant.
________________________
No. 10-12616
________________________
D. C. Docket No. 2:08-cv-00681-CEH-DNF
OCEAN BANK,
a Florida state banking corporation,
Plaintiff-Counter-
Defendant-Appellee,
versus
FIRST FLORIDA BANK,
a Florida state banking corporation,
Defendant-Counter-
Claimant,
ROYAL PALM BANK OF FLORIDA,
a Florida state banking corporation,
Defendant-Counter-
Claimant-Appellant.
________________________
Appeals from the United States District Court
for the Middle District of Florida
_________________________
(March 17, 2011)
Before MARCUS and ANDERSON, Circuit Judges, and ALBRITTON,* District
Judge.
PER CURIAM:
_______________
*Honorable William Harold Albritton III, United States Senior District Judge for the Middle
District of Alabama, sitting by designation.
2
After oral argument, and careful consideration, we conclude that the
judgment of the district court is due to be affirmed, although perhaps upon grounds
somewhat different from those relied upon by the district court.
Most importantly, we conclude that the parties’ Participation Agreements
confer priority payment rights to Ocean Bank, and that these rights apply to the
distribution of proceeds from the sale of the property by the participating banks
following their repossession thereof. The Participation Agreements expressly
provide in Section 8C that principal payments—“either during the term of the Loan
or during any post-maturity period” (emphasis added)—shall be subject to Ocean
Bank’s priority rights. The position that Ocean Bank retains its priority rights even
after the property is repossessed by foreclosure is bolstered by paragraph 9(C) of
the same Participation Agreements, which provides: “[T]he proceeds of all
collateral directly securing payment of the Loan . . . shall be applied to the full
payment of the Loan as provided in Section 8 above.”
Even if there were some ambiguity with respect to the foregoing
Participation Agreements, the record evidence of the parties’ conduct provides
overwhelming proof that the parties understood that the priority rights of Ocean
Bank continued past repossession and applied to the proceeds of the sale of the
3
property.1 The Appellants argue that the record contains disputed issues of
material fact, but their argument fails for lack of evidence. The deposition
testimony to which the Appellants cite neither denies that Ocean Bank maintained
its priority after a foreclosure, nor denies that the other two banks confirmed this
understanding to Ocean Bank. The stricken affidavits upon which Appellants
would like to rely were properly rejected as conclusory by the district court, and
likewise provide no grounds for reversal.
Appellants also argue that no equitable lien could arise on the property
unless the Appellant banks owed a debt to Ocean Bank.2 However, Appellants cite
no cases for the proposition that parties who are competing for priority must owe
debts to one another before any one of them may claim a lien on the collateral. A
debt was clearly owed to Ocean Bank as the unpaid lender in the underlying
transaction, just as a debt was owed to the Appellant banks. The fact that the
property was collateral for the loan makes it proper for Ocean Bank to claim an
equitable lien. Accordingly, Appellants have no good argument against the
1
Any issues with respect to whether or not Ocean Bank had the right to sell the
repossessed property are moot. Appellants raised the issue only with respect to whether the oral
agreement relied upon by the district court allowed for a sale, and we do not rely upon this oral
agreement.
2
Appellants’ argument that no equitable lien could arise without a written
agreement is moot because we find that the written Participation Agreements provided the basis
for a lien.
4
imposition of the lien.
Because we do not rely on the district court’s theory that there was a new
oral agreement, Appellants’ arguments that the relief exceeded the pleadings and
that there was no consideration to support the formation of a new agreement are
moot.
For the foregoing reasons, the judgment of the district court is
AFFIRMED.
5 | 01-03-2023 | 03-17-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1537241/ | 27 B.R. 26 (1982)
In the Matter of James Edward CECKO, Debtor.
Margie EZZO and Shani Jean Ezzo, Plaintiffs,
v.
James Edward CECKO, Defendant.
Bankruptcy No. B80-1648-Y, Adv. No. 81-0056.
United States Bankruptcy Court, N.D. Ohio.
November 9, 1982.
Anthony N. Gemma, Youngstown, Ohio, for plaintiffs.
Thomas E. Zena, Youngstown, Ohio, for defendant.
JAMES H. WILLIAMS, Bankruptcy Judge.
Plaintiffs filed this action seeking a determination that certain damages resulting from an attack by debtor's dog are within the "willful and malicious injury" exception to discharge created by 11 U.S.C. § 523(a)(6). Defendant has moved the court alternatively for summary judgment and judgment on the pleadings, arguing that his conduct was, at most, an act of negligence or reckless disregard of his duty toward plaintiffs, and that such conduct cannot sustain a finding of nondischargeability. As none of the facts alleged in the instant complaint are contested by defendant for purposes of his motion, the court will treat said motion as one for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure as incorporated Rule 712(b) of the Rules of Bankruptcy Procedure.
I
The complaint filed in this matter contains the following factual allegations. On or about July 28, 1976, plaintiff Shani Jean Ezzo, a minor child of plaintiff Margie Ezzo, was attacked by defendant's dog, a female Doberman Pinscher with known vicious propensities. This incident occurred at plaintiffs' residence, and Shani Jean Ezzo suffered extensive facial injuries which necessitated medical treatment, including plastic surgery. It is further alleged that Shani Jean Ezzo has suffered permanent disfigurement and that plaintiffs expect to incur substantial expenses for future medical treatment of said injuries.
II
In considering defendant's motion for judgment on the pleadings, all of the above facts are to be taken as true. See generally 2A Moore's Federal Practice para. 12.15 (2d ed. 1982). The question presented is whether defendant's involvement in this unfortunate incident is sufficient to support a finding of nondischargeability under 11 U.S.C. § 523(a)(6), which provides:
(a) A discharge under section 727, 1141, or 1328(b) of this title does not discharge an individual debtor from any debt
* * * * * *
*27 (6) for willful and malicious injury by the debtor to another entity or to the property of another entity. * * *
Defendant argues that any actionable claim which plaintiffs may have against him would be based upon a theory of negligence and is therefore dischargeable as not within the quoted exception.
The legislative history to Section 523(a)(6) suggests that a specific intent to injure is required before the exception will apply:
Under this paragraph, "willful" means deliberate or intentional. To the extent that Tinker v. Colwell, 139 [193] U.S. 473 [24 S.Ct. 505, 48 L.Ed. 754] (1902), held that a looser standard is intended, and to the extent that other cases have relied on Tinker to apply "reckless disregard" standard, they are overruled.
House Report No. 95-595, 95th Cong., 1st Sess. (1977) 365, U.S.Code Cong. & Admin. News 1978, pp. 5787, 6320.
Plaintiffs maintain that the keeping or harboring of a clearly vicious animal supports a finding of intentional injury within the meaning of the statute, citing various cases decided under Section 17a(8) of the Bankruptcy Act of 1898. See, e.g., Beam v. Karaim, Co.Ct., 47 N.Y.S.2d 193 (1944); Yackel v. Nys, 258 A.D. 318, 16 N.Y.S.2d 545 (1939). However, the cited cases appear to be progeny of Tinker v. Colwell, supra, and are thus overruled by the enactment of Section 523(a)(6).
While an owner may have to answer for the consequences of the conduct of a pet based upon the fundamental tort concepts of foreseeability and/or strict liability, it does not necessarily follow that a debt arising from such a claim is nondischargeable under present law. The vast majority of decisions which have found an exception to discharge under Section 523(a)(6) have involved intentional torts (such as assault and battery), and it is well-recognized that a deliberate or intentional act is required under that section. See, e.g., In re Adams, 21 B.R. 301, 9 B.C.D. 318 (Bkrtcy.N.D.Ohio 1982); In re White, 18 B.R. 246, 8 B.C.D. 1093 (Bkrtcy.E.D.Va.1982); In re Stanfield, 14 B.R. 180, 8 B.C.D. 170, 5 C.B.C.2d 229 (Bkrtcy.N.D.Ohio 1981); In re Bryson, 3 B.R. 593, 6 B.C.D. 199 (Bkrtcy.N.D.Ill.1980); 3 Collier on Bankruptcy para. 523.16[1] (15th ed. 1982).
In a cogent analysis of the previously quoted legislative history, one court has concluded that a finding of specific hatred or ill will is not a necessary element of malice under Section 523(a)(6), but that same court applied the exception only upon a finding of specific intent to do harm:
Debtor's act of intentionally bringing a gun when he had just been involved in an altercation compounded by his reaction to Mr. Craycraft's having been shot is sufficient evidence for this court to hold that the debtor willfully intended to cause harm to Mr. Craycraft and is responsible for all the injurious consequences flowing therefrom.
In re Adams, 21 B.R. 301, 9 B.C.D. at 320. The total absence of intent to injure in the case at bar mandates a finding in favor of defendant.
This court is aware of one dog bite case in which the court came to a contrary conclusion. See In re Rines, 18 B.R. 666, 8 B.C.D. 1205 (Bkrtcy.M.D.Ga.1982). While Rines presents facts which are strikingly similar to the instant case, the court specifically declined to give effect to the definition of "willful" which is found in the legislative history to Section 523(a)(6). This judicial district and many others have elected to honor the intent of Congress as expressed in the legislative history, and the court respectfully declines to follow the Rines case as authority.
III
An examination of the pleadings in this matter reveals no allegation of fact which would suggest that defendant intended to cause injury to plaintiff Shani Jean Ezzo. For this reason, defendant must prevail on his motion for judgment on the pleadings, and the relief requested in said motion will be granted by order of this court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2336265/ | 72 F.Supp.2d 893 (1999)
NORTHLAKE MARKETING & SUPPLY, INC., et al., Plaintiffs,
v.
GLAVERBEL, S.A., et al., Defendants.
No. 92 C 2732.
United States District Court, N.D. Illinois, Eastern Division.
June 10, 1999.
Order Entering Judgment June 25, 1999.
*894 *895 *896 Anthony S. DiVincenzo of Campbell and DiVincenzo, and John C. Brezina of Brezina and Ehrlich, for Plaintiffs Northlake Marketing & Supply Inc., Samuel E. May, and James Hamilton., for Plaintiff.
Blake Lee Harrop and John Claiborne Koski of Sonnenschein, Nath & Rosenthal, George H. Spencer of Spencer, Frank & Schneider, and Jerold I. Schneider of Arter & Hadden, for Defendants Glaverbel S.A., Fosbel, Inc., and Foseco, Inc., for Defendant.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
SHADUR, Senior District Judge.
Over the protracted length of this litigation[1] this Court has found every claim advanced and every defense asserted by Northlake Marketing & Supply, Inc. ("Northlake") and its principals James Hamilton ("Hamilton") and Samuel May ("May") to be devoid of merit. They have taken an unsuccessful appeal to the Court of Appeals for the Federal Circuit from a host of this Court's orders (the memorandum opinion and order and permanent injunction order each dated November 13, 1997; the memorandum opinion and order and supplement, both dated March 11, 1997; the memorandum opinion and order dated December 16, 1996; the memorandum opinion and order dated August 29, 1995; and the memorandum opinion and order dated August 4, 1994), with that Court having rejected all of those claims in a per curiam one-sentence judgment order entered November 13, 1998 (unpublished, but available as 1998 WL 796051).
With Glaverbel S.A. ("Glaverbel") and Fosbel, Inc. ("Fosbel") having prevailed on the merits of their patent infringement counterclaim, the only issue remaining before the litigation at long last terminates is the quantification of the damages recoverable for that infringement. This Court has conducted the trial on that subject, only to find the issuance of its ultimate ruling delayed substantially by the lapse of many months before the litigants tendered their respective proposed findings of fact and conclusions of law.
Those submissions have now been made, and what follows are this Court's Findings of Fact ("Findings") and Conclusions of Law ("Conclusions") in accordance with Fed.R.Civ.P. ("Rule") 52(a). To the extent (if any) that the Findings as stated may be deemed conclusions of law, they shall also be considered Conclusions. In the same way, to the extent (if any) that matters later expressed as Conclusions may be deemed findings of fact, they shall also be considered Findings. In both of those respects, see Miller v. Fenton, 474 U.S. 104, 113-14, 106 S.Ct. 445, 88 L.Ed.2d 405 (1985).
Findings of Fact
Parties and Background
1. Northlake Marketing was formed as a partnership in 1984 and incorporated as Northlake Marketing & Supply, Inc. in 1985. In 1995 Hamilton, one of the founders and a current owner of Northlake, formed Northlake Industries, Inc. as a separate company, and he is the sole owner of that company. In 1988 May, also one of the founders and a current owner of Northlake, formed N & E Refractories as a separate company, and he is the sole owner of that company. May left Northlake at the end of 1994 but did not relinquish his ownership position or his position as an officer-director. For convenience these Findings and Conclusions will also use "Northlake" as a singular collective noun to refer to the corporation and the two individual counterdefendants.
*897 2. Glaverbel S.A. ("Glaverbel") is a Belgian corporation that was the successor by merger of two firms, each of which dated back to the 1930s. Glaverbel is the owner of the United States patents involved in this action. Fosbel, Inc. ("Fosbel") is a joint venture based in Cleveland, Ohio, 49% of which joint venture is owned by Glaverbel and the other 51% of which is owned by the other joint venturer. Fosbel is the exclusive licensee of the GlaverbelFosbel patents in the United States.
3. This Court has previously determined that the two Glaverbel United States patents involved in this action Nos. 4,792,468 ("'468 Patent") and 4,920,084 ("'084 Patent")are "not invalid," were not procured by inequitable conduct and were infringed by Northlake. This Court has accordingly issued a permanent injunction that terminates on expiration of the two Glaverbel patents. What remains is a determination of the monetary relief to which Glaverbel and Fosbel are entitled. They seek (1) an award of "lost profits" for some of the Northlake activity and (2) a "reasonable royalty" for the remainder of the Northlake activity, together with (3) prejudgment interest, (4) enhanced damages under 35 U.S.C. § 284[2] and (5) a determination that this is an "exceptional case" such as to call for an award of attorneys' fees under Section 285.
4. Glaverbel-Fosbel's '468 and '084 Patents are two of their four United States Patents involved in their litigation with Northlake and relating to the repair of industrial furnaces, a process referred to as "ceramic welding." In non-legal terms that process involves forming a coherent refractory mass on a "target" (e.g., a furnace wall) by projecting a mixture of particles of an oxidizable substance and particles of a refractory substance against the target. When the oxidizable substance burns exothermically (i.e., gives off heat) at the wall, it welds the refractory particles to the wall, thus repairing the furnace wall. Finding 5 describes the four patents in non-legal terms.
5. Glaverbel's now-expired United States Patent No. 3,684,560 ("'560 Patent") refers to ceramic welding where the average size of the oxidizable particles is less than 50 microns (a micron is one one-millionth of a meter). Glaverbel's United States Patent No. 4,489,022 ("'022 Patent") refers to an improvement in ceramic welding where both silicon particles and aluminum particles are present, as the oxidizable materials, in certain amounts and proportions. Glaverbel's '468 and '084 Patents refer to an improvement in the granulometry of the refractory particles. Granulometry refers to the quantity of particles at various different sizes, and also may be referred to as the particle size distribution. According to the two patents in suit, the "size range spread factor" (a coined term that can be used as a representation of the granulometry) must be at least 1.2.
6. One use of the process of the '468 and '084 Patents is in repairing the silica brick walls of a coke oven. In a coke oven the process of converting coal into coke may take from 12 to 20 hours, during which time the oven operates at a range of 1200~to 2000. During the trial this Court observed a videotape (DX 104)[3] and heard an explanation of the ceramic welding process.
Lost Profits Analysis
7. Four factors (known as the Panduit factors, see Conclusion 5) are considered (if and when present) in a lost profits analysis. Those factors are (a) a demand for the patented product or method, (b) the absence of acceptable noninfringing substitutes, (c) the manufacturing and *898 marketing capability of the patent owner (or its licensee) to exploit the demand and (d) the amount of profit that the patent owner would have made on the infringing sales.
1. Demand for the Patented Product
8. Northlake explained that the annual rate of growth in the ceramic welding industry from 1986 to 1996 was probably 35% or 40%, while in some years the market was actually doubling (DX 140 at 223-24 to 224-9).[4] Northlake further explained that the environmental trend has been to shut down coke plants because they give off large quantities of environmentally damaging emissions, so that many plants have closed down and more are closing down. That trend has created a drastic need to repair the remaining coke plants. Because the alternative of rebricking is so expensive, Northlake described the resulting demand for ceramic welding as a "gold mine" (DX 140 at 246-9 to 246-24). Because coke plants are no longer being built in the United States, that has contributed to the creation of the "gold mine" (DX 140 at 527-3 to 527-22).
9. Northlake's discovery answers in this case indicated that it had documents concerning its own sales projections, market share and the size of the ceramic welding market, but those documents were not produced in response to the Glaverbel-Fosbel discovery requests (DX 149).
10. Based on Northlake's own testimony, its failure to produce its documents referred to in Finding 9, its infringing sales and the Fosbel sales, this Court finds that there was a substantial demand for coke oven repair using the patented ceramic welding technology.
2. Absence of Acceptable Noninfringing Substitutes
11. Alternative techniques for coke oven repair include gunning, rebricking, lava flame and harsh press silica dusting. Findings 12 to 18 describe them and compare them with ceramic welding.
12. Gunning is the application of a water-based cement bonded refractory material through a gunning machine, which mixes the water and the cement based powder, spreading it onto the hot silica refractory. As Glaverbel-Fosbel witness John Bacon ("Bacon") testified (Tr. 293) and this Court finds:
Q. What is the expected life of a gunning repair?
A. Very short. It can be as short as a week or two. Sometimes it last [sic] as long as six months.
Q. What is the purpose of a short term repair such as gunning?
A. It's a quick fix. We can get it up and back into service quickly. Then we can get around to doing a proper ceramic welding repair a little later.
13. Rebricking is a major repair to a coke oven wall, involving the replacement of bricks that make up the oven wall. In an even more major rebricking job, an entire oven wall can be replaced. To accomplish rebricking the oven has to be taken out of service, the burners must be turned off and the area being repaired has to be cooled down so that the workers can lay bricks physically. Then after the repair is made and the oven reheated, the silica brick goes through various silica transformations that can crack the new brick. As Northlake explained, cooling down the ovens sometimes takes two to three weeks, and reheating the ovens can take three months (DX 141 at 99).
14. Lava flame is a flame spraying process.
15. Harsh press silica dusting is a method by which silica powder is sprayed into the oven to fill cracks and holes and *899 seal the oven (DX 141 at 141). It is not a long-term fix at all.
16. By contrast, ceramic welding can extend the life of the oven lining for years. Fosbel advertises that the life of its oven repair is in excess of two years. In fact the repairs typically last two to four years, with some oven repairs having been in place for 10 years. As an additional advantage, in ceramic welding the repairs are performed from outside the oven, so that all ovens can remain in service except the oven under repair, and all ovens (including the oven under repair) remain at operating temperatures. As Northlake agreed, not having to cool down the ovens is one of the things that make ceramic welding unique (DX 141 at 97). Importantly, among the various furnace repair techniques only ceramic welding and rebricking have a bona fide life expectancy of two to four years. Finally, the Glaverbel-Fosbel ceramic welding process is certified under ISO 9000, which is an international quality certification.
17. Fosbel never lost a ceramic welding bid to any of the other furnace repair techniques. No Fosbel customer ever indicated that any of the other repair techniques would be an acceptable substitute for ceramic welding. Northlake agreed that it did not compete with companies that rebrick ovens (DX 141 at 98), and it never lost any work to companies that do silica dusting (DX 141 at 158).
18. Based on the differences in the methods of making the repairs, the times that the furnaces must be taken out of service and the expected longevity of the repairs, this Court concludes that none of the non-ceramic welding repair methods has benefits comparable to those of the patented ceramic welding technique. Hence none of them is an acceptable noninfringing substitute.
19. Glaverbel-Fosbel's ceramic welding competitors for coke oven repair in the United States have included Northlake (a/ k/a Exo-Ram), United Refractories, Fuse Tech and Certek. Certek competed during the period 1989 through 1991, having approximately 13% of the total market, and was thereafter acquired by Fosbel. Collectively the competitors (including Northlake but excluding Certek) accounted for less than 10% of the ceramic welding business. While Northlake's share was about 2% of the ceramic welding market, Fosbel's share was about 80% before the Certek acquisition and about 92% thereafter.
20. No direct evidence was presented during the trial as to the details of the ceramic welding powder used by the competitors (other than Northlake) listed in Finding 19. Conclusions 7 to 9 set out the reasons why on the evidence of record those competitors also did not provide "acceptable" alternatives. As the predicate for those Conclusions, this Court finds that the history of ceramic welding started with the invention of the '560 Patent, progressing to the invention of the '022 Patent and then to the inventions of the '468 and '084 Patents. Northlake sought to invalidate the two later patents (those now in suit) on the theory that the invention was "on sale" for more than one year before the filing dates of their applications, in alleged contravention of Section 102(b). In response to Northlake's summary judgment motion, Glaverbel-Fosbel submitted substantial evidence from the inventors explaining the history of their research to discover the improvement that became the basis of the '468 and '084 Patents. This Court's August 29, 1995 memorandum opinion and order provides a summary and timetable of the Glaverbel experimentation leading up to the invention of the '468 and '084 Patents (1995 WL 534290, at *4-*6). Because all of Northlake's invalidity challenges failed, on the present record the formulation of the '468 and '084 Patents is a novel and non-obvious improvement that provided material benefits over the prior ceramic welding powders.
21. There is circumstantial evidence of the absence of any acceptable alternative that the ceramic welding techniques of the competitors (other than Northlake) were *900 not acceptable noninfringing alternatives because they did not have the advantages that formed the basis of the invention of the '468 and '084 Patents. If on the other hand they had the novel and non-obvious attributes of the invention of the '468 and '084 Patents, then those competitors (like Northlake) would have infringed. That circumstantial evidence of the absence of any acceptable alternative is corroborated by Northlake's failure to change to a noninfringing formulation during the nine years of its dispute with Glaverbel-Fosbel. Such a change to a size range spread factor of less than 1.2 would have been relatively straightforward (even some of the samples tested by Zvosec had a size range spread factor of less than 1.2), so that the absence of change supports the inference (and hence the finding) that there was a meaningful benefit or advantage to using powder with the size range spread factor of at least 1.2.
22. In addition, Northlake's antitrust claim (statements in which may be used against Northlake under Fed.R.Evid. 801(d)(2)(A) even though disputed by Glaverbel-Fosbel) includes the allegation of Glaverbel-Fosbel's ceramic welding monopoly poweran assertion that means the absence of acceptable ceramic welding substitutes.
23. Based on Findings 11 to 22, this Court finds that there were no acceptable noninfringing substitutes of any kind either non-ceramic methods or noninfringing ceramic welding for the Glaverbel-Fosbel patented ceramic welding.
3. Manufacturing and Marketing Capability To Exploit the Demand
24. According to Northlake, there are between 30 and 33 coke plants in the United States (DX 141 at 134). Northlake's evidence at the time of the March 1992 trial in the Indiana case between Glaverbel-Fosbel and Northlake showed that Glaverbel-Fosbel was servicing at least 23 or 24 accounts, United Refractories was servicing one or two, Lava Flame was not servicing any accounts and Northlake was servicing one account (DX 149 at 102 and 105).
25. Glaverbel-Fosbel knew the customers for ceramic welding repair at least as early as 1988, the issue date of the first of the two patents now in suit (DX 117 at 6 to 7 and Tab 5). Because you can't hide a coke oven, everybody having any relationship to the industry knew where all of the coke ovens were, and Glaverbel-Fosbel had understandably identified those customers. As for Northlake, even though it had only one customer as of 1992, during the 1989-96 period it had provided ceramic welding materials and services to 10 customers (DX 117 at 7).
26. As Finding 19 reflects, less than 10% of the ceramic welding furnace repair business went to Glaverbel-Fosbel competitors (other than Certek, which was acquired by Fosbel in 1991). Glaverbel-Fosbel had a procedure in place to handle an increase in market share of 10 to 20%, including hiring and training additional crews, transferring people among crews, scheduling the rotation and maintenance of equipment and providing for the necessary lead time to purchase additional equipment. In addition, Glaverbel-Fosbel's expert took into consideration the capital cost of additional equipment.
27. This Court finds that Glaverbel-Fosbel did have the manufacturing and marketing capacity both to make the ceramic welding sales that were made by Northlake and to provide the ceramic welding services that were provided by Northlake.
4. Profits the Patent Owner Would Have Made
28. Glaverbel-Fosbel is claiming lost profits on Northlake's sales to four customers. Fosbel had called on those customers before Northlake entered the ceramic welding market, and in some cases it had actually provided them with ceramic welding services before Northlake's entry into that market (DX 117 at 10).
*901 29. Glaverbel-Fosbel's expert Dr. Lewis Koppel explained his lost profits calculations. Among the variables in those calculations was the size of the crew on a particular job. For example, Northlake frequently used only a single person ceramic welding crew (where the customer provided the additional crew members), while Glaverbel-Fosbel recommended a three person crew. Dr. Koppel's initial calculations proceeded on the assumption that Glaverbel-Fosbel would have been able to provide a three person crew at the Glaverbel-Fosbel price even in those instances where Northlake provided a single person crew at a lower price, or even where Northlake provided a three person crew at a lower per-crewmember price. To assist in evaluating the financial impact of alternatives to that assumption, Dr. Koppel prepared a supplemental report (DX 148): a grid summarizing the lost profits (and reasonable royalty) calculations under different assumptions. Those different assumptions include things such as Glaverbel-Fosbel price vis-a-vis Northlake price, a three-person crew vis-a-vis a one-person crew and whether or not there were acceptable noninfringing alternatives. In addition, the fourth column of DX 148 is based upon Glaverbel-Fosbel's ratable or relative market share.
30. These Findings are based on the assumptions (less favorable to Glaverbel-Fosbel than those in Dr. Koppel's initial calculations) that Glaverbel-Fosbel would have made the sales at the Northlake price and with the Northlake crew-member size. It was agreed during the trial that Glaverbel-Fosbel's proposed findings and conclusions would be based on the right-hand column 4 of DX 148, with Glaverbel-Fosbel reserving the right to file a memorandum supporting the use of any other sets of assumptions. They have done so, and these Findings have already accepted one such set by confirming that there were no acceptable noninfringing alternatives to Glaverbel-Fosbel's patented ceramic welding. Although Glaverbel-Fosbel have also made a strong legal case for the added acceptance of Dr. Koppel's initial assumptions referred to in Finding 29, these Findings reflect a more conservative (that is, lower) damages award predicated on the revised calculations in DX 148. In the interest of providing a complete record in the event that Glaverbel-Fosbel were to take an appeal or cross-appeal, footnotes to appropriate Findings will be included to set out what the damages figures would be if Dr. Koppel's initial assumptions had been fully accepted instead.
31. Northlake has not challenged any of Glaverbel-Fosbel's specific calculations as such (thus Northlake did not argue that its actual sales records reflected a number different from that used by Glaverbel-Fosbel's expert). Instead Northlake disputes the underlying factual assumptions. It is therefore unnecessary to make specific findings on the unchallenged items such as the total amount of ceramic welding material that Northlake actually sold or the total number of crew days for which Northlake actually charged its customers.
32. This Court fully credits the report and testimony of Glaverbel-Fosbel's expert Dr. Koppel, whose analysis included a number of conservative (and valid) components for example, that Fosbel would have to purchase additional machines in order to make the sales for which lost profits are sought, even though its witness Bacon testified that additional machines were in fact available. In addition, Dr. Koppel made a relative market share reduction by reducing the Northlake sales numbers ratably to take into account the sales during the three year period (1989-91) that Certek was in the market before it was acquired by Glaverbel-Fosbel. Dr. Koppel also determined the incremental costs (those that would have increased if Glaverbel-Fosbel had made the additional sales) associated with the lost profits analysis. Examples are the cost of additional ceramic welding powder and the cost of additional direct labor involved in providing the ceramic welding repair service, as contrasted with general overhead costs (items that do not increase because of *902 increased sales, such as rent and the cost of new product development). Finally, Dr. Koppel has properly accounted for some costs that are partially incremental.
33. As for the time period for which Glaverbel-Fosbel are entitled to recover damages, see Conclusion 2. Based on the foregoing Findings, this Court finds that Glaverbel-Fosbel's lost profits amount to $694,231.[5]
Reasonable Royalty Analysis
34. Glaverbel-Fosbel also seek a reasonable royalty on Northlake's sales to its remaining customers. Such a reasonable royalty is determined based upon a hypothetical negotiation between the patent owner and the infringer, at the time the infringement began, with both parties to the negotiation assuming that the patent is valid and would be infringed but for the license. Courts consider a variety of factors (known as the Georgia-Pacific factors, see Conclusion 15) as part of the reasonable royalty analysis.
35. There is an existing license between Glaverbel and Fosbel that initially called for a 10% royalty, a figure later reduced to 9%. In a 1995-96 independent audit that license was found to represent an "arms' length transaction" (DX 117 at 15). This Court rejects both 9% and 10% as a reasonable royalty as of the time that Northlake's infringement began on December 20, 1988, the issue date of the '468 Patent not only because of the time differential involved between the negotiation date of the actual license and the theoretical negotiation date of the hypothetical Northlake license, but also (and importantly) because in addition to receiving a royalty, Glaverbel received a share of profits by reason of its approximately ½ ownership position in Fosbel (a financial benefit that Glaverbel would not of course have derived from Northlake sales under the hypothetical Northlake license).
36. According to Northlake's testimony in its unsuccessful antitrust claim against Glaverbel-Fosbel in the Indiana case, Northlake had a projected gross profit of 40%, a figure that may have dropped to the 30%-plus range in the mid-1990s (DX 140 at 221 22). Northlake's net profit would have been at least in the mid-teen percentage range if Northlake had not sustained its legal expenses in its dispute with Glaverbel-Fosbel (id. at 222-23).
37. If Northlake had taken a license at the beginning of 1989, it would not have sustained the legal expenses from its dispute with Glaverbel-Fosbel and also would not have had the distractions resulting from such litigation. Instead it would have had the opportunity to develop its business further, which would have increased its revenue without increasing its fixed overhead costs. Moreover, at least as early as 1987 each of Northlake's three principals at the time (Hamilton, May and Frank Zlamal ("Zlamal")) was earning in excess of $100,000 (DX 140 at 537-23 through 538-11). This Court concludes that if Northlake had taken a license its net profit would have exceeded the midteen percentages without any need to make any change in its manner of operation.
38. This Court credits the Koppel report and explanation and finds that a reasonable royalty under all the circumstances was Dr. Koppel's original 14% figure, as adjusted to 13.1% to correct a fractional error (see Finding 39). Other than purportedly challenging Dr. Koppel's report on cross-examination (a challenge that this Court finds to have been unpersuasive), Northlake presented no evidence as to the numerical amount of a reasonable royalty.
39. According to the alternative calculation in DX 148, at a 14% royalty rate and using the actual Northlake revenue figures the reasonable royalty payable to Glaverbel-Fosbel for the Northlake use of the patented inventions would have been *903 $105,552. Because Dr. Koppel's testimony revealed a fractional error in that figure, this Court finds the reasonable royalty rate would have been 13.1% rather than 14% (Tr. 485), for a reasonable royalty calculation of $98,767.[6]
Prejudgment Interest
40. Although Northlake disputes the appropriateness of any prejudgment interest award, the parties have agreed that if prejudgment interest is in fact awarded, the rate should be prime plus 1%. Prejudgment interest should ordinarily be awarded in patent cases under Section 284, absent some justification such as where the patent owner is responsible for undue delay in prosecuting a lawsuit for withholding such an award (General Motors Corp. v. Devex Corp., 461 U.S. 648, 654-57, 103 S.Ct. 2058, 76 L.Ed.2d 211 (1983)).
41. Northlake has offered no evidence upon which a denial of prejudgment interest could be predicated, arguing instead that it had a good faith belief of patent invalidity. And Northlake's further position in its June 7, 1999 Response to the Glaverbel-Fosbel submission that prejudgment interest should not be awarded because "Glaverbel delayed filing this infringement action for about 8 years" is totally unpersuasive. It was after all Northlake's ultimately rejected contention that the enforcement of the patents at issue violated the antitrust laws that effectively forced any further efforts along those lines (hence forcing the delay) until that groundless antitrust claim was dispatched. Northlake cannot complain of such a self-inflicted wound. Because the purpose of awarding prejudgment interest is to compensate the patent owner, not to punish the infringer, factors such as asserted good faith on the part of the infringer and such as the untenable argument regarding delay are irrelevant to a prejudgment interest analysis.
42. Here the record reflects no reason not to award prejudgment interest. Prejudgment interest was calculated by Dr. Koppel at the prime rate, then recalculated at prime plus 1% compounded quarterly. Because the total damage award under the preceding Findings is the sum of lost profits plus a reasonable royalty ($694,231 plus $98,767 or a total of $792,998), prejudgment interest on that amount through August 1, 1998 was $489,866. According to the reported figures in the Wall Street Journal, of which this Court takes judicial notice, the prime rate since 1998 has been 7.75%. Additional prejudgment interest at 8.75% is awarded on the base of $792,998, compounded quarterly from August 1, 1998 to the date of entry of judgment in accordance with these Findings and Conclusions.
Allocation Among Northlake Parties
43. Northlake suggests that May should not share liability for the period beginning January 1, 1995, when he ceased to work through Northlake marketing. As Finding 1 reflects, Northlake Industries, Inc. was formed by Hamilton in 1995. But all billing was still made by Northlake Marketing, and all checks were deposited into the Northlake Marketing bank account and were reflected in the Northlake Marketing tax returns. There is no question that Northlake Marketing and Hamilton are jointly and severally liable on the entire judgment, while May is jointly and severally liable on all aspects of liability through December 1994. Hence the only issue as to possible allocation of liability is whether May is also liable for the infringement that occurred after January 1, 1995.
44. During the relevant time period through and including the grant of the permanent injunction in this case in 1997, both May and Hamilton were officers and directors, and each was a 44% shareholder, of Northlake Marketing. Northlake Marketing's practice was that every owner was an officer and board member there were no officers or board members who were not owners. Northlake Marketing's 1989 federal income tax return showed that its liabilities exceeded its assets, and the liabilities *904 continued to exceed the assets thereafter.
45. Northlake failed to establish the legal effect of May's claimed resignation on his status with the corporation, for there was no amendment to Northlake's by-laws eliminating the requirement that all shareholders were officers and directors. Nor did Northlake's corporate record book (DX 109) even reflect May's claimed resignation or any acceptance of such claimed resignation by Northlake.
46. If Northlake had prevailed on its antitrust claims, either in this Court or on appeal from the adverse decision in the Indiana case, May as a 44% owner stood to reap a substantial gain. Furthermore, May's activities on behalf of Northlake at least through 1994, including his initial work from 1984 through 1988, were part and parcel of putting Northlake into the infringing position in which it found itself.
47. All of Northlake, May and Hamilton have been found liable for infringement. None of them has provided this Court with a sufficient factual and legal basis for allocation of responsibility. Accordingly all three of those parties are jointly and severally liable for the entire award in this case.[7]
Enhanced Damages Pursuant to Section 284
48. Glaverbel-Fosbel seek an award of enhanced damages. For that purpose this Court considers the issues of (a) willful infringement and (b) bad faith conduct during litigation.
1. Willful Infringement
49. Northlake seeks to defend against enhanced damages on the theory that there was no willful infringement because it had subjective good faith beliefs (a) that its ceramic welding powder came first, so that the patents were invalid, and (b) that the invention had been on sale by Glaverbel-Fosbel itself more than one year prior to the filing date of the patent applications, thereby invalidating the patents on an alternate basis. Because the acceptance of a subjective belief, however unfounded or unreasonable, as the basis for defeating a claim for willful infringement could entirely eviscerate the concept of willfulness, an objective standard must be used instead. And that finding is not changed by Northlake's June 7, 1999 Response that seeks to recast its defense in a manner that makes no difference on the issue of its willfulness.
50. On the subject of Northlake's willfulness vel non, the oral opinion of its counsel John Brezina ("Brezina") was provided in a discovery answer and was read into the record. But there is no evidence (a) that Brezina ever made an independent investigation into the facts or (b) that Brezina ever attempted to verify the facts or (c) importantly in terms of whether Northlake could reasonably rely on such an opinion of counsel, that Northlake ever provided Brezina with any documents (as opposed to oral information) about its alleged prior powder.
51. Northlake's previously rejected contention that its initial refractory powder had a size range spread factor of more than 1.2, thus invalidating the patent claims, must be examined for the purpose of considering enhanced damages. In that regard Northlake received its technical information from Zlamal and former Fosbel employee Mickey Whisman ("Whisman"), but from no other source (DX 141 at 7-8, 128). During the 1986-87 time frame Northlake received a sample of Fosbel ceramic welding powder and had that analyzed (DX 140 at 107-09).[8] During the *905 period from 1984 through 1988 Northlake performed literally hundreds of experiments varying the components and percentages of ingredients used in its ceramic welding process. But with all of that trialand-error activity, Northlake had no knowledge whatever of the size range spread factor of its powders at the time of its use (DX 141 at 13-14). There is no evidence that anyone acting on Northlake's behalf attempted at any time before trial to obtain verification from its supplier Harbison-Walker as to the size range spread factor of the two different products used by Northlake, the originally employed Flintgrain 1604 or the smaller Calcined Quartz (the other product to which it shifted by early 1988). To the contrary, in response to Requests for Admissions Northlake agreed that it had no documents that specifically identified the size range spread factor of any refractory particles sold by Harbison-Walker (DX 123 at 1, 2). Northlake admittedly had "no concern about particle size" (DX 140 at 411).
52. As Finding 51 reflects, the proofs adduced by Northlake during the liability (validity) phase of the trial also did not indicate any effort to obtain size range spread factor information from Harbison-Walker. Indeed, when the Harbison-Walker witness Nale appeared at trial and produced a document, and when Glaverbel-Fosbel then objected to its use because it had not been previously produced in discovery, Northlake argued that it had just received the document. Nor is there any evidence that Northlake sought to depose Harbison-Walker or to subpoena documents or to take any steps, other than to rely on oral testimony and purported recollection, to support its contention as to the details of its prior ceramic welding material.
53. This Court finds, based upon the foregoing, that there could not be a competent opinion of counsel, and certainly not an opinion on which Northlake (knowing its counsel's total lack of knowledge of the critical relevant facts) could reasonably rely, that the prior Northlake powder had a size range spread factor of at least 1.2. This Court further finds that, given the Northlake changes in its formulation percentages and the vagaries of the amounts of ingredients it used, coupled with its knowledge that its counsel was unaware of all such matters, there could not have been an objective good faith reliance on its part on any opinion of counsel.
54. Northlake's second branch of its attempted advice of counsel defense is the alleged prior commercial (i.e., public) use of the powder by Glaverbel-Fosbel, which allegedly triggered the on-sale bar of Section 102(b) to invalidate the Glaverbel patents. Brezina's asserted opinion in that regard was based on documents produced by Glaverbel-Fosbel during the Indiana case under a protective order (DX 119) that restricted its use to that lawsuit. That being the case, reliance on that document would appear to be improper as a matter of public policy. But even if that were not so, Brezina's oral opinion was no better than cursory and conclusory, and was not worthy of reliance, for it clearly did not include any investigation into the issue of experimental use, which is a universally understood and critical exception to the on-sale defense to patent validity. Brezina, an experienced patent lawyer, had to be well aware that a competent opinion of counsel would at a minimum have addressed that exception to the on-sale defense and would have advised that further investigation was necessary.
55. Moreover, Northlake's advice of counsel defense must be considered in the context of the Indiana case and the prior Belgian litigation among the parties. Glaverbel and Fosbel sued Northlake and its principals for infringement of the '560 and '022 Patents in August 1988 in the Indiana Court in Civil Action No. H88 383. Northlake counterclaimed, asserting patent invalidity, patent noninfringement, patent misuse, unfair competition and antitrust violations by Glaverbel and Fosbel and inequitable conduct by Glaverbel. Then in November 1989 Northlake sought reexamination of the '560 and '022 Patents *906 pursuant to Section 302, a statutory provision that permits new prior art to be brought to the attention of the Examiner. On September 3, 1991 the United States Patent and Trademark Office ("PTO") confirmed the patentability of three claims of the '560 Patent (which originally had 22 claims), and on April 16, 1991 the PTO confirmed the patentability of all original 14 claims of the '022 Patent plus 14 new claims.
56. Before trial on the '560 and '022 Patents, the Indiana Court granted Northlake's motion for summary judgment of noninfringement. Trial in the Indiana Court then proceeded on Northlake's counterclaims. At the conclusion of Northlake's proofs in March 1992, the Indiana Court ruled in response to a Glaverbel-Fosbel Rule 52(c) motion that Northlake had not established (1) invalidity of the '560 and '022 Patents or (2) inequitable conduct by Glaverbel or (3) antitrust violations or unfair competition by Glaverbel or Fosbel. On January 23, 1995 the United States Court of Appeals for the Federal Circuit (a) affirmed the decision of the Indiana Court as it related to validity, lack of inequitable conduct, lack of antitrust violation and lack of unfair competition, (b) vacated in part the summary judgment decision as it related to infringement and (c) remanded the matter to the Indiana Court. Thus Northlake was not able to make out a prima facie case on any of its allegations during the Indiana Court trial.
57. In January 1989 Glaverbel sued Northlake in Belgium on three Belgian patents, the first two of which corresponded to the '560 and '022 Patents and the third of which corresponded to both the '468 and '084 Patents. In February 1995 the Belgian court found in favor of Glaverbel and against Northlake on the validity and infringement of the three Belgian patents and made a partial award of 2 million Belgian francs against Northlake. Northlake has not paid any part of the Belgian judgment.
58. Any prudent business person, in deciding objectively whether to rely on any advice of counsel (importantly in determining if such advice were indeed competent), should take into account the consistent inability to make out a prima facie case on the various theories that had been advanced in the Indiana case. Moreover, a series of adverse summary judgment decisions in this Court, where Northlake (despite the benefit of affidavits submitted in opposition to summary judgment) was not able to make out a prima facie case on any of its theories, would have confirmed to the prudent business person that it was engaged in nothing more than blind reliance on its counsel's unsupported speculation.
59. Northlake's second patent invalidity theory in this Court (see Finding 48(b)) was that the published prior art, particularly the powder of Example VII of Glaverbel-Fosbel's own '022 Patent, had a size range spread factor of at least 1.2 and thus invalidated the claims of the two patents now in suit. For one thing, when Northlake lost that issue in early 1995 in the Belgian litigation, a prudent business person would not have continued its infringement, or at a minimum would have sought a supplementary opinion of counsel as to the impact of the adverse Belgian decision. But independently of Northlake's lack of success on that issue in Belgium, the proofs presented to this Court also did not amount to a prima facie case of invalidity. As noted in this Court's November 13, 1997 opinion (986 F.Supp. 471, 476), Northlake did not explain which claims of the patents were actually alleged to be invalid on this basis. In fact Northlake's expert Dr. Nash testified that his theory did not apply to every claim of the '468 Patent or the '084 Patent. Furthermore, the '022 Patent had been considered by the PTO in evaluating, and in not finding invalid, the '468 and '084 Patents (DX 101 and DX 102 at 1 of each exhibit under "References Cited").
60. Based on the total absence of proof on the details of Northlake's own prior *907 powders, an equally total absence of proof that the prior Glaverbel-Fosbel powder was anything but experimental, and the fundamental shortcomings of Northlake's purported remaining proofs on patent invalidity, the Court finds that this has not been a close case and that Northlake cannot claim good faith reliance on any assertedly competent advice of counsel.
2. Conduct During Litigation
61. It is undisputed that even after being sued in Belgium in 1989, and with knowledge at least since 1990 of the corresponding '468 and '084 Patents indeed, even after an adverse judgment in the Belgian litigation in February 1995 Northlake made no effort simply to change the size range spread factor of its refractory powder to avoid further infringement, until Northlake's activities were enjoined by this Court in late 1997.
62. Moreover, Northlake's litigation conduct here, as noted in the docket entries (cited "Dkt. ") of which this Court takes judicial notice, reflects a continued pattern of arbitrary and intransigent conduct. For one thing, there was no basis to include additional defendant Foseco in the suit to begin with in response to the Foseco motion to dismiss (Dkt.36, 37) Northlake proceeded with the deposition of Anthony Money of Foseco and thereafter, rather than submitting a dismissal with prejudice, required this Court to rule on the Foseco motion (Dkt.56). In addition, Northlake sued Glaverbel in this action for a declaration of invalidity of the '022 Patent even while Northlake's challenge to that patent was on appeal from the Indiana Courtthus engaging in the improper splitting of a claim. In response to a motion to dismiss as to the '022 Patent (Dkt.26, 27), Northlake filed its opposition (Dkt.57) but presented no valid legal grounds for maintaining a challenge to the '022 Patent in this action, triggering this Court's opinion granting the motion and dismissing as to the '022 Patent (Dkt.59).
63. Another unreasonably proffered aspect of the present action was Northlake's allegation of Glaverbel-Fosbel antitrust violations and unfair competition. Having lost its antitrust claims at trial in Indiana in March 1992, Northlake had no basis for Northlake to reassert those claims in this Court in April 1992.[9] Thus Northlake had no proper basis to oppose as it did (Dkt.61) Fosbel's motion in this Court to dismiss as to all events occurring before the end of the March 1992 Indiana trial (Dkt.42, 43). And because the conduct alleged to violate the antitrust laws was no different before that 1992 date than after that date, there was equally no basis for Northlake to oppose the motion to dismiss all of its antitrust claims. Then after this Court dismissed the remainder of the Northlake antitrust and unfair competition claim (Dkt.82), there was no basis for Northlake to argue that it did not understand the ruling and seek reconsideration, resulting in further briefing and a further opinion by this Court (Dkt.126).
64. As to Northlake's inequitable conduct allegations (Count III), which this Court dismissed on summary judgment on March 11, 1997 (958 F.Supp. 373), they were based on an impermissibly stretched reading of Ninth Circuit law a reading that was contrary to the express and controlling ruling of the United States Court of Appeals for the Federal Circuit. This Court similarly found Northlake's noninfringement claim (Count I) to be based on an improper argument, for Northlake was simultaneously contending that its powder had come first and thus met the language of the patent claims. Finally, Northlake's laches argument was equally improper, for Northlake conceded the absence of harm, *908 one of the two requirements for a laches defense.
65. In addition to all of that substantive misconduct, Northlake repeatedly failed to cooperate in discovery in this action, forcing the filing of several discovery motions by Glaverbel-Fosbel. It appears that some documents were never produced. Further, there was no justification for Northlake's position that a new entity, Northlake Industries, was involved after May had left Northlake Marketing, because as found earlier all business continued to be carried out in the name of the original Northlake Marketing. Those aspects of Northlake's conduct ultimately compelled this Court to enter an order excluding any documents that Northlake had not produced during discovery. As stated earlier, despite that order Northlake attempted to use a nonproduced Harbison-Walker document at trial.
66. Northlake used certain Fosbel documents,[10] produced under a protective order in the Indiana case, to support its summary judgment motion charging that the Glaverbel patents were invalid for allegedly violating the on-sale bar. Even though that protective order prohibited use of the documents other than in the Indiana litigation (DX 119), Glaverbel-Fosbel did not raise the issue initially because the documents were part of a Northlake claim of fraud and Glaverbel-Fosbel did not want to be accused of attempting to cover up the purported fraud. With no on-sale bar having been found, Glaverbel-Fosbel may now appropriately object to Northlake's tactics in that respect. Similar tactics were repeated during the damages phase of the trial, with Northlake attempting to rely on another exhibit (PX 66) that had been produced in the Indiana case under the same restrictions.
67. After this Court had denied Northlake's summary judgment motion urging the invalidity of the '468 and '084 Patents for violation of the on-sale bar, Northlake took no discovery from the inventors and no further discovery from either Glaverbel or Fosbel, notwithstanding this Court's ruling in the summary judgment opinion that there were defects or gaps in the Northlake proofs. Accordingly, after the close of discovery this Court granted the Glaverbel-Fosbel motion asserting that the patents were not invalid on the basis of the on-sale bar.
68. This Court does not have to address the applicability or inapplicability of Rule 11 or 28 U.S.C. § 1927 as such to determine that the Northlake litigation conduct was not in good faith for purposes of Section 284. It is significant in the context of the overall litigation that Northlake took almost no discovery. It appears that only Anthony Money of Foseco was deposed on the question of the propriety of Foseco being a party, while only Charles Zvosec of Fosbel was deposed on the question of the 20 samples no other testimony of Glaverbel-Fosbel personnel, nor any Glaverbel-Fosbel responses to interrogatories, nor any Glaverbel-Fosbel responses to requests for admissions were used at either trial in this Court. Northlake consistently could not make out a prima facie case either on summary judgment issues or at trial: It offered an expert witness who apparently had not studied all the patent claims, it had no witness to explain its patent invalidity theories as to all patent claims, and it had no witness to explain the specific patent claims for which its anticipation (Section 102) or obviousness (Section 103) defenses purportedly applied.
69. Based on the totality of Findings 49 through 68 and comparable subsidiary findings in the earlier Findings, this Court finds that the Northlake infringement has been willful, that this litigation was conducted in bad faith and that Northlake's extrajudicial conduct in not changing its ceramic welding powder after repeated adverse decisions amounts to bad faith conduct as that term has been interpreted under Section 284.
*909 Attorneys' Fees Under Section 285
70. Glaverbel-Fosbel also seek an award of attorneys' fees under Section 285. As Conclusions 30 and 31 reflect, the caselaw teaches that an attorneys' fees award requires a finding of an "exceptional case" and that such a finding can properly be based on either willful infringement or bad faith conduct. Where both of those factors are present (as is true here), the basis for an "exceptional case" finding becomes even stronger.
71. In light of the prior Findings of willful infringement and bad faith conduct, further aggravated by the fact that Northlake consistently could not make a prima facie case either at the summary judgment stages or at trial, this Court exercises its discretion and finds this to be a truly exceptional case justifying an award of attorneys' fees.
Conclusions of Law
Jurisdiction
1. This Court's prior conclusions as to jurisdiction continue to apply during the proceedings leading to these Findings and Conclusions.
Damages General
2. Under Section 284 a patent owner is entitled to damages "adequate to compensate for infringement but in no event less than a reasonable royalty, for the use made of the invention by the infringer, together with interest and costs as fixed by the Court." Among the different elements of damages for which the patent owner may recover such compensation are (1) lost profits on sales that the patent owner lost as a result of the infringement (State Indus., Inc. v. Mor-Flo Indus., Inc., 883 F.2d 1573, 1577 (Fed.Cir.1989)) and (2) a reasonable royalty on infringing sales even if the patent owner would not have obtained those sales (see Bio-Rad Labs., Inc. v. Nicolet Instrument Corp., 739 F.2d 604, 616-17 (Fed.Cir.1984)). As for the time period for which Glaverbel-Fosbel are entitled to recover damages, this Court has already held that their counterclaim (because it is a compulsory counterclaim under Rule 13(a)) dates back to the filing of their Answer by virtue of Rule 15(c)(2)(958 F.Supp. at 376 (1997); accord, 6 Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d § 1430, at 228 (2d ed.1990)). Despite this Court's invitation in its 1997 opinion, Northlake has offered nothing to support the notion that the Section 286 reference to "the filing of the ...counterclaim" should be read in terms of the file stamp date rather than the effective date mandated by Rule 15(c)(2), while Glaverbel-Fosbel have cited one early case whose holding conforms to the more normal (and more sensible) reading that gives full effect to Rule 15(c)(2) indeed, if Northlake's position were accepted, a situation could arise in which a later-tendered compulsory counterclaim could be filed but could confer no relief at all on the injured patentee. All of that being so, the six-year limitations period specified in Section 286 does encompass the entire period of the Northlake infringement addressed in these Findings and Conclusions.[11]
3. Damages need to be proved only by a preponderance of the evidence, and the patent owner's burden of proof is not absolute but rather one of reasonable probability. This Court is free to use its discretion in choosing a method for calculating damages as long as the measure of damages is just and reasonable (Kori Corp. v. Wilco Marsh Buggies & Draglines, Inc., 761 F.2d 649, 653-54 (Fed.Cir. 1985).) Because the computation of damages is not always amenable to precise determination, it is acceptable if the evidence shows the extent of damages as a *910 matter of just and reasonable inferences, even though the result is only approximate (Paper Converting Mach. Co. v. Magna-Graphics Corp., 745 F.2d 11, 22 (Fed.Cir. 1984)). Any doubt as to the correctness of a damages award is to be resolved against the infringer (State Indus., 883 F.2d at 1577). If the patent owner is able to establish a reasonable probability that it would have made only some of the infringer's sales but for the infringement, the damages award may be in the amount of lost profits to the extent so established plus a reasonable royalty for the remainder of the sales (id.).
Damages Lost Profits
4. It is unnecessary to prove lost profits with absolute certainty. It suffices to prove a reasonable probability that Glaverbel-Fosbel would have made the sales of the ceramic welding powder and would have provided the ceramic welding services (one of the two patents is for the powder and the other for the method of repair). There is no need to negate all possibilities that a purchaser might have bought a different product or might have forgone the purchase altogether (State Indus., id.).
5. Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978), cited with approval in various Federal Circuit cases (see, e.g., Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1545 (Fed.Cir.1995) (en banc)), identifies four factors to be considered (if and when present) in a lost profits analysis. Those four factors are (a) a demand for the patented product or method, (b) the absence of acceptable noninfringing substitutes, (c) the manufacturing and marketing capability of the patent owner to exploit the demand and (d) the amount of profit the patent owner would have made on the infringing sales. Under the Panduit-taught analysis, evidence of those four factors permits a court to draw the reasonable inference that the lost profits claimed were in fact caused by infringing sales, thus establishing the patentee's prima facie case of "but for" causation.
6. Here the demand for the patented invention was established, among other things, by the infringers' sales and the infringers' sales projections that were presented in the Indiana case and were part of DX 140 and DX 141. This Court concludes that there was a demand for the patented invention.
7. There are no acceptable non-infringing substitute methods for ceramic welding. None of the other techniques or methods has the considerable advantages of the patented invention. In addition, even ceramic welding as practiced by other competitors was not a substitute for the patented process and powder. In that respect, because the other competitors' ceramic welding powders lack the attributes of the patented invention, they are not acceptable alternatives (TWM Mfg. Co. v. Dura Corp., 789 F.2d 895, 901 (Fed.Cir. 1986)). Mere existence of such a competing alternative does not make it an acceptable substitute (id.). Hence a court should apply a two-supplier market approach when products other than those of the infringer lack the advantages of the patented invention (Kalman v. Berlyn Corp., 914 F.2d 1473, 1484 (Fed.Cir.1990); Uniroyal, Inc. v. Rudkin-Wiley Corp., 939 F.2d 1540, 1545-46 (Fed.Cir.1991)). Under that approach the damage calculation should be based on the premise that Glaverbel-Fosbel would have made all of the Northlake sales, not just a ratable or relative market share portion of those sales.
8. If the ceramic welding powders of the competitors other than Northlake did not in fact infringe on the patents in suit, they did not provide the benefits or advantages of the patented invention. For damage calculation purposes the question is not whether those powders were competing products, but rather whether there were acceptable substitutes (see, e.g., Minco, Inc. v. Combustion Eng'g, Inc., 95 F.3d 1109, 1119 (Fed.Cir.1996) (per curiam)). Moreover, Panduit, 575 F.2d at 1160-62 teaches that the argument of "acceptable substitutes" must be viewed as of limited *911 influence where the infringer knowingly made and sold the patented product for years while ignoring the claimed "substitute" (Stryker Corp. v. Intermedics Orthopedics, Inc., 96 F.3d 1409, 1418 (Fed.Cir. 1996)). Here Northlake continued with its infringing powder for nine years (December 1988 through 1997), rather than making the purportedly simple change to a refractory powder having a size range spread factor of less than 1.2.
9. Finally, the issue of assertedly acceptable noninfringing ceramic welding alternatives may be considered in the context of the Northlake antitrust claims that Glaverbel-Fosbel have assertedly monopolized the ceramic welding repair market. But that would mean that Glaverbel-Fosbel must have monopoly power (which is not presumed in the patent-antitrust interface). To look at the converse of that possibility, Abbott Labs. v. Brennan, 952 F.2d 1346, 1355 (Fed.Cir.1991) has quoted Justice O'Connor's concurrence in Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 37 n. 7, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984) (emphasis added):[12]
A common misconception has been that a patent or copyright, a high market share, or a unique product that competitors are not able to offer suffices to demonstrate market power. While each of these three factors might help to give market power to a seller, it is also possible that a seller in these situations will have no market power: for example, a patent holder has no market power in any relevant sense if there are close substitutes for the patented product.
It follows as a logical matter that if a patentee does possess market power (monopoly power), there cannot be close substitutes for the patented product. And Northlake has indeed stated (it has actually conceded in its pleading, albeit while looking in a different direction) that there is monopoly power, a concession that can be used against Northlake under Fed. R.Evid. 801(d)(2)(A).
10. Accordingly the lost profits analysis applies to all of the sales made by Northlake to its customers with whom Fosbel had any contact before the Northlake infringement. That analysis applies without any ratable reduction to take into account any noninfringing ceramic welding.
11. Based upon the undisputed testimony, Glaverbel-Fosbel had the marketing and manufacturing capability for a 10% to 20% increase in sales, and Glaverbel-Fosbel's expert Dr. Koppel took the cost of new machinery into consideration in his calculations. Glaverbel-Fosbel had the full marketing capability to have made all of the sales that Northlake made, if Northlake had in fact not made them.
12. Panduit's fourth factor calls for a calculation of the amount of the additional, or incremental, profit that Glaverbel-Fosbel would have made if Northlake had not infringed. That calculation is made by (1) determining the amount of additional sales Glaverbel-Fosbel would have made and (2) subtracting from it the additional costs Glaverbel-Fosbel would have incurred in order to make the additional sales. That incremental profit approach is well established in patent damages cases (Paper Converting, 745 F.2d at 22).
13. This Court has approved Dr. Koppel's expert report with the modifications reflected in the Findings. It concludes that the lost profits award for Glaverbel-Fosbel is $694,231 (see Finding 33).[13]
DamagesReasonable Royalty
14. "Reasonable royalty" is the amount that a willing licensee would pay, and a willing licensor would accept, before the commencement of the infringement (Section 284; Hanson v. Alpine Valley Ski *912 Area, Inc., 718 F.2d 1075, 1079 (Fed.Cir. 1983)).
15. Georgia-Pacific Corp. v. United States Plywood Corp., 318 F.Supp. 1116 (S.D.N.Y.1970), cited in such cases as Rite-Hite, sets forth the factors generally to be considered (if and when present) in a reasonable royalty analysis. Dr. Koppel's report correctly analyzes the first fourteen factors, and that analysis is accepted by this Court. And the fifteenth factor, about which Dr. Koppel testified, is the amount upon which a licensor (such as the patentee) and a licensee (such as the infringer) would have agreed if both had been reasonable in trying to reach a voluntary agreement that is, the amount that a prudent licensee who desired, as a business proposition, to obtain a license to manufacture and sell a particular article embodying the patented invention would have been willing to pay as a royalty and yet be able to make a reasonable profit, and that would have been acceptable by a prudent patentee who was willing to grant a license (Georgia-Pacific, 318 F.Supp. at 1120).
16. Any reasonable royalty adequate to compensate Glaverbel-Fosbel for any infringing sales made by Northlake for which Glaverbel-Fosbel is not awarded lost profits should take into account the incremental profit margin for Glaverbel-Fosbel at the time infringement began (Rite-Hite, 56 F.3d at 1554). Here Northlake's infringement began when the '468 Patent issued on December 20, 1988. Hence the period of time closest to that date for which a statistically valid royalty rate can be computed is 1989, when the Glaverbel-Fosbel incremental profit margin was 16.2%. Next that incremental profit margin is adjusted for relative market share, and Glaverbel-Fosbel had 85.69% of the coke oven repair business in 1989. On that basis a reasonable royalty rate would be in the range of 16.2% × 85.69% or 13.9%, a figure reduced to 13.1% to adjust for a fractional error (see Finding 39).
17. Northlake's net profit was in the mid-teen percentage range (without taking legal fees in its dispute with Glaverbel-Fosbel into account). But in addition to the substantial salaries paid to Northlake's three principals, once Zlamal left Northlake in July 1989 he received continued compensation calculated at $2,200 per month plus six additional installments of $10,000 each (DX 140 at 227-4 to 227-15).
18. This Court concludes that taking into account Northlake's gross profit in the 30% to 40% range and its net profit in the mid-teen percentage range, plus the substantial compensation paid to its principals, 13.1% is indeed a reasonable royalty rate. This Court concludes that the reasonable royalty payable for the infringement is $98,767 (see Finding 39).[14]
Prejudgment Interest
19. Awards of prejudgment interest are the rule, not the exception (Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1574 (Fed.Cir.1996), citing General Motors Corp. v. Devex Corp.). As Finding 41 states, the purpose of prejudgment interest is not to punish the infringer but to compensate the patent owner for its losses. Because an award of prejudgment interest is the rule, and because Northlake has proffered no evidence to justify an exception, this Court concludes that an award of prejudgment interest is proper.
20. Based on Findings 33 and 39, the total damages award (the lost profits portion plus the reasonable royalty portion) is $694,231 plus $98,767 or $792,998.
21. Northlake does not dispute that the prejudgment interest rate should be the prime rate plus 1%. Dr. Koppel calculated the damages (lost profits and reasonable royalty) by using that rate, compounded on a quarterly basis. With the adjustments reflected in Finding 42, the prejudgment interest calculated through August 1, 1998 was $489,866. This Court awards that *913 amount of prejudgment interest through August 1, 1998. It also awards additional prejudgment interest at 8.75% compounded quarterly from August 1, 1998 to the date of entry of an order of judgment pursuant to these Findings and Conclusions.
Allocation of Liability
22. There is no justification for an allocation of liability among the Northlake parties. Despite the fact that May resigned from Northlake as of the beginning of 1995, it would be inequitable for him to abdicate his responsibilities as an officer-director, and thus to create a potential for avoiding further liability, after his years of contributing to the position in which Northlake found itself and his years of taking a substantial salary, yet to remain in a position in which he sought to reap benefits from any potential success of Northlake (in its antitrust claims). At a minimum, to avoid further liability for continued infringement May should have tendered his stock (or had the corporation cancel his stock) at the same time that he purportedly resigned his position as a Northlake officer and director.
23. As Northlake acknowledged, its liabilities exceeded its assets from 1989 to the present. Even though the technical knowhow of the company was considered a valuable trade secret by Northlake, May used some of that technical knowhow in his new business without any payment to Northlake. Northlake has not paid any part of the Belgian judgment, or even the taxable costs awarded by the Federal Circuit in Northlake's unsuccessful appeal. It thus appears to this Court that Northlake has continued its infringing activities merely on the chance that it might recoup on its antitrust claims, but with neither the ability nor the intent to meet its legitimate financial obligations.
24. On balance, it would be inequitable to allow May to escape even partial liability for the damages award here, even though it is true that about 15% of the award, based on the proportion of Northlake sales in the years 1995 through 1997 to the total Northlake sales for 1998 through 1997, is attributable to those post-1994 years. For the reasons already stated, no allocation is appropriate.
Enhanced Damages
25. Under Section 284 a court may increase the damages up to three times the amount found or assessed by the factfinder. Any award of enhanced damages requires a showing of either willful infringement or bad faith (Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1460-61 (Fed.Cir.1998) (en banc)). As with Section 285 awards of attorneys' fees in "exceptional cases," where as here both of those factors are present the case for enhanced damages becomes even stronger.
26. Any infringer has the obligation to avoid infringement once it has knowledge of the patent. Several factors to be considered on the issue of willfulness are explained in Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed.Cir.1992),[15] and the single most important factor is whether or not there was reliance on a competent opinion of counsel. Other factors include (but are not limited to) whether evidence of infringement (or the magnitude of infringement) was concealed, evidence of copying, closeness of the case, duration of the infringement, remedial action by the infringer (if any) and the infringer's motivation for harm.
27. There is an affirmative duty to obtain validity and infringement opinions (Great Northern Corp. v. Davis Core & Pad Co., 782 F.2d 159, 166-67 (Fed.Cir.1986)). Any such opinion must be sufficiently thorough to support the reasonableness of a client's reliance on the opinion (Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed.Cir.1992)), because the required showing is one of justifiable reliance on the opinion (see Datascope v. SMEC, Inc., 879 F.2d 820, 828 (Fed.Cir. *914 1989)). Hence a cursory or conclusory opinion does not suffice (Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed.Cir.1983); Kori Corp., 761 F.2d at 656), and oral opinions are not favored (Minnesota Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1580 (Fed.Cir. 1992)). When the situation here is judged against those legal requirements, this Court concludes that Northlake did not receive a competent opinion of counsel upon which a prudent business person could reasonably rely.
28. This Conclusion addresses the remaining factors for enhanced damages separately. There was a failure by Northlake to cooperate appropriately in discovery (cf. Russell Box Co. v. Grant Paper Box Co., 203 F.2d 177, 183 (1st Cir.1953)), its challenge to validity was not of substantial quality (cf. Delta-X Corp. v. Baker Hughes Prod. Tools, Inc., 984 F.2d 410, 413 (Fed.Cir.1993) (same requirement as to a challenge to infringement)), it did not discontinue its infringing activities or find a noninfringing alternative during the pendency of this suit, even after a series of adverse rulings (Read, 970 F.2d at 827), and it demonstrated a motivation to harm Glaverbel-Fosbel. For example, Northlake received technical information from former Fosbel employee Whisman (DX 141 at 8-1 to 8-6 and at 128-2 to 128-14) and had access to Fosbel pricing to the same customers where Northlake was bidding for work (id. at 11-17 to 11-19, 13-12 to 13-20; 14-18 to 14-23; 24-18 to 24-22 and 26-18 to 26-25). Northlake's corporate minute book (DX 109) contains no references, at any time from 1988 to the present, to the Glaverbel-Fosbel claims, to Northlake's alleged defense, to the present litigation or to the claimed opinion of counsel.
29. Based on all of the foregoing, this Court concludes both that the infringement was willful and that Northlake acted in bad faith. It therefore awards additional enhanced damages of twice the amount of the actual damages award. Prejudgment interest will not be applied to the enhanced damages portion of the judgment.
Attorneys' Fees and Costs
30. Any determination of whether a case is "exceptional" so as to be eligible for an award of attorneys' fees under Section 285 is a two-step process. First the court must determine if the case is exceptional and then, if the answer is affirmative, it must decide whether an award of such fees is appropriate (Cybor Corp., 138 F.3d at 1460).
31. Exceptional circumstances (the first step) may be found if there was misconduct during litigation, vexatious or unjustified litigation or a frivolous suit (Bayer Aktiengesellschaft v. Duphar Int'l Research B.V., 738 F.2d 1237, 1242 (Fed. Cir.1984)). Willful infringement alone will suffice to support a finding of an "exceptional case" for an award of attorneys' fees, though it does not mandate such relief (Cybor Corp., 138 F.3d at 1461).
32. As already found and concluded, here there was both willful infringement and bad faith conduct. There was no basis for Northlake to commence the present suit encompassing all of the issues it sought to advance, and there was no basis for it to continue infringement (or continue with the suit) in the face of successive adverse summary judgment or exclusionary rulings. This Court concludes that Glaverbel-Fosbel have demonstrated by clear and convincing evidence that this is indeed an exceptional case within the meaning of the statute.
3. Having made that "exceptional case" determination, this Court exercises its discretion in favor of awarding attorney fees to Glaverbel-Fosbel. In that respect counsel for the parties are ordered to proceed in accordance with this District Court's General Rules ("GR") 46 and 47. Under Budinich v. Becton Dickinson & Co., 486 U.S. 196, 108 S.Ct. 1717, 100 L.Ed.2d 178 (1988) the pendency of proceedings looking to such an award does not *915 affect the finality of the substantive judgment to be entered at an early date.
34. Finally, this Court awards taxable costs in favor of Glaverbel-Fosbel and against Northlake.
* * * * * *
It is hereby ordered that judgment shall be entered on June 25, 1999 in favor of Glaverbel S.A. and Fosbel, Inc. and against Northlake Marketing & Supply, Inc., James Hamilton and Samuel May, jointly and severally, in the following amount:
1. $792,998, representing the sum of lost profits and a reasonable royalty; plus
2. prejudgment interest on that sum to and including that date of judgment;[16] plus
3. enhanced damages in the sum of $1,585,996 (2 × $792,998), without prejudgment interest.
In accordance with the Findings and Conclusions, Glaverbel, S.A. and Fosbel, Inc. shall also be awarded their reasonable attorneys' fees (to be determined in accordance with GR 46 and 47) and are hereby awarded their taxable costs.
JUDGMENT ORDER
This Court's lengthy June 10, 1999 Findings of Fact and Conclusions of Law ended by anticipating the entry of a judgment order on June 25, 1999, with counsel for the parties being directed to have previously submitted a statement as to the agreed amount of that judgment (if agreement were possible). Counsel have indeed since succeeded in reaching an "Agree[ment] as to arithmetic only," with "All other objections reserved" (a copy of their calculations is attached to this judgment order). In accordance with that agreement, it is ordered that judgment be entered in favor of Glaverbel S.A. and Fosbel, Inc. and against Northlake Marketing & Supply, Inc., James Hamilton and Samuel May, jointly and severally, in the sum of $2,992,918.
NOTES
[1] This is by a substantial margin the oldest pending case on this Court's calendar only one other multifaceted patent case comes within hailing distance.
[2] All further citations to Title 35 provisions will simply take the form "Section ," employing the numbering within Title 35.
[3] "DX" refers to the Glaverbel-Fosbel exhibits and "PX" refers to Northlake's exhibits. Where numbers such as "223-24" or "224-9" appear in reference to a DX (see, e.g., the Finding 8 text at n. 4), they refer to the page and line citations in a documentary exhibit.
[4] DX 140 and DX 141 are excerpts from testimony by May and Hamilton, respectively, primarily from depositions and from trial testimony in the case between the parties ("Indiana case") in the United States District Court for the Northern District of Indiana ("Indiana Court").
[5] On the added assumption referred to in the last sentence of Finding 30, that figure would have been $863,219.
[6] On the added assumption referred to in the last sentence of Finding 30, that figure would have been $88,611 (reduced from the DX 148 figure of $94,699).
[7] According to the portion of Dr. Koppel's report (DX 117) that allocates liability over the several years involved, only about 15% of the total liability was incurred after January 1, 1995 in any event.
[8] This evidence comes from DX 140 and 141, testimony during the period when Northlake was pursuing its antitrust claims against Glaverbel-Fosbel. To some extent Northlake sought to retreat from that position during the damages trial, suggesting that it did not receive technical information from Whisman and that the test of the Fosbel powder occurred later. But this Court discredits that attempted disavowal in favor of accepting the earlier testimony.
[9] If Northlake's appeal from the Indiana decision had been successful, the antitrust claims would have been remanded and complete relief would have been available in Indiana. If on the other hand the Northlake appeal proved unsuccessful, that would have completely disposed of the Northlake claim. In either event the matter plainly did not belong in this District Court.
[10] This was the "grid" or data of 20 "samples."
[11] Glaverbel-Fosbel's Objections to Northlake's Proposed Conclusion 12 sets out additional grounds for reaching the same conclusion. This Conclusion's silence as to the express adoption of those additional grounds should not be mistaken as any adverse reflection on (let alone a rejection of) those grounds, which may indeed provide sound and independent bases for the result reached here.
[12] This Court's memorandum opinion and order dismissing Northlake's antitrust claims quoted from the same case (see 861 F.Supp. 653, 663 (N.D.Ill.1994)).
[13] See Finding 33 n. 5 for a potential alternative figure for that element of the damages award.
[14] See Finding 39 n. 6 for a potential alternative figure for that element of the damages award.
[15] Read has been overtaken by Markman as to the handling of claim interpretation, but that of course has no impact on the principle stated in the text.
[16] In that respect counsel for Glaverbel-Fosbel are ordered promptly to calculate, and to submit to Northlake's counsel for prompt review, the amount of prejudgment interest from August 1, 1998 to the contemplated June 25 judgment date (and hence the total amount of prejudgment interest), and then counsel for the parties are ordered to submit a statement as to the agreed amount (or if not agreed, statements as to the parties' respective calculations and the basis therefor) to this Court's chambers on or before June 21, 1999. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537439/ | 142 B.R. 1 (1992)
UNITED STATES of America, ex rel. Kenneth L. MARCUS, Plaintiff,
v.
NBI, INC., Defendant.
Civ. A. No. 89-1605 (RCL).
United States District Court, District of Columbia.
February 20, 1992.
Errata Order May 12, 1992.
David H. Shapiro, Kator, Scott & Heller, Washington, D.C., for Marcus.
James E. Nesland, Ireland, Stapelton, Pryor & Pascoe, P.C., Denver, Colo., Thomas A. Guidoboni, John T. Brennan, Jr., Bonner & O'Connell, Washington, D.C., for NBI, Inc.
Michael F. Hertz, Polly A. Dammann, Michael C. Theis, Civil Div., U.S. Dept. of Justice, Washington, D.C., for the U.S.
MEMORANDUM OPINION AND ORDER
LAMBERTH, District Judge.
The current action arises out of an action brought by plaintiff relator Kenneth L. Marcus pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. § 3730. The parties to the qui tam action reached a settlement agreement on October 31, 1991 and United States received a payment from defendant NBI, Inc. in accordance with the terms of that agreement on November 12, 1991. The case now comes before the *2 court on plaintiff relator's application pursuant to § 3730(c)(2)[1] for an award against defendant of reasonable attorneys' fees, costs and expenses incurred by relator in connection with the now-settled qui tam False Claims Act case.
Defendant contends that relator's application for attorneys' fees, costs and expenses is barred by force of the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a)(1). For reasons discussed below, relator's application is granted.
BACKGROUND
This is an action brought pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. § 3730(b), by Kenneth L. Marcus (relator). On December 19, 1989, the United States of America, elected to intervene and proceed with the action as provided for in 31 U.S.C. § 3730(b)(4). The United States alleged in this action that NBI failed to disclose commercial price discounts as it was required to do under a contract with The General Services Administration (GSA). NBI entered into a multiple award schedule contract with GSA for the sale of computers and computer services. The contract required NBI to disclose any discounts granted to commercial customers during the course of performance of the contract over and above the discount negotiated with GSA. Kenneth Marcus, who is a former NBI employee, informed GSA that NBI had entered into an agreement with a commercial customer that included a discount exceeding the discounts disclosed to GSA during negotiations of the contract. In the Second Amended Complaint the United States alleged that NBI knowingly presented false claims for payment when the company submitted invoices that were inflated by reason of NBI's failure to inform GSA of the reduction in price given to national account customers during the term of the contract.
On February 6, 1991, NBI filed a petition in the United States Bankruptcy Court for the District of Colorado seeking protection from creditors under Chapter 11 of the Bankruptcy Code. On March 18, 1991, NBI filed a Notice of Automatic Stay in this action. In June, the United States and NBI entered into an agreement to settle this matter. The agreement was approved by the Bankruptcy Court on June 12, 1991. On July 3, 1991 the parties filed a stipulation to dismiss this action. In addition, relator Kenneth Marcus filed, on July 3, 1991, an application, pursuant to 31 U.S.C. § 3730(d), for costs expenses and fees against NBI. This Court dismissed the action pursuant to the agreement of the parties on October 31, 1991. On November 12, 1991, the United States received a payment from NBI in accordance with the terms of the settlement agreement. The only matter still pending is relator's application for attorneys' fees, costs and expenses.
ANALYSIS
The application currently before the court presents three issues. First, whether the entry of a money judgment by a district court pursuant to the qui tam provisions of the False Claims Act, 31 U.S.C. § 3730, is barred by the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a). Second, whether any exception found to apply to the United States in a petition for a money judgment applies with equal force to a private citizen relator in a qui tam action. Third, whether the attorneys' fees, costs and expenses claimed are reasonable.
A. The Effect of the Automatic Stay on the Entry of a Money Judgment
Defendant NBI, Inc. contends that the filing of a petition in bankruptcy stays the entry of a money judgment against a debtor. Response of Defendant NBI, Inc. to Relator's Motion for Severance and Objection to Relator's Application for an Award of Reasonable Attorney's Fees, Costs and Expenses (hereinafter NBI Response) at 1. The Bankruptcy Code states that the filing *3 of a bankruptcy petition operates as a stay to any action against the debtor that "was or could have been commenced before" the filing of the petition "or to recover a claim against the debtor that arose before" the filing of the petition. 11 U.S.C. § 362(a)(1). Defendant argues that because plaintiff "has not petitioned the Bankruptcy Court for relief from the stay order," his application is thus barred. NBI Response at 3. Defendant concludes, then, that the application by plaintiff for attorneys' fees, costs and expenses is thus barred. This court disagrees.
This conclusion reached by defendant overlooks an exception contained in the same section of the Bankruptcy Code as the automatic stay provision, § 362(b)(4). Section 362(b)(4) states that "continuation[s] of . . . action[s] or proceeding[s] by . . . governmental units to enforce . . . police or regulatory power[s]" are not automatically stayed by § 362(a). 11 U.S.C. § 362(b)(4). The United States Court of Appeals for the Eighth Circuit has interpreted § 362(b)(4) to allow an action to proceed where a "governmental unit is suing a debtor to prevent or stop violation of fraud . . . laws, or attempting to fix damages for violation of such a law." In re Commonwealth Companies Inc., 913 F.2d 518, 522 (1990). Here, the Court was relying on legislative history for establishing Congressional intent.[2]
The Commonwealth court stressed that it was not Congress' intent to extend the § 362(b)(4) exception to include "governmental actions that would result in a pecuniary advantage to the government" with respect to other creditors. Id. at 523. Relying, again, on legislative history, the court found that Congress did not extend the § 362(b)(4) exception to include enforcement of money judgments because it did not want to interfere directly with the bankruptcy court's control over the assets of an estate so as to give the governmental unit "preferential treatment to detriment of all other creditors."[3]Id. See also Missouri v. Bankruptcy Court, 647 F.2d 768 (8th Cir.1981) (Where § 362(b)(4) was held inapplicable to the "enforcement of state laws . . . because the laws `directly conflict[ed] with the control of the property . . . by the bankruptcy court.'"); In re Berry Estates, 812 F.2d 67 (2nd Cir.1987) (Because no harm to other creditors, action to recover excess rents retained by landlord was held to be within the § 362(b)(4) exception).
Thus, when a governmental proceeding will not conflict with the bankruptcy court's control of the property of the debtor and will not otherwise create a pecuniary advantage for the government, the proceeding will be excepted from the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a), by means of § 362(b)(4) of the Code, provided the proceeding is pursuant to the police or regulatory powers of that governmental unit.
In the instant case, the plaintiff seeks that the court merely "fix the amount" of the attorneys' fees, costs and expenses. Plaintiff seeks no pecuniary advantage over any other creditors and will receive no enforcement rights as a result of this judgment. Thus, since the bankruptcy court's control over defendant's property will not *4 be infringed upon in the slightest and since the plaintiff's application for attorneys' fees, costs and expenses can be characterized without difficulty as "attempting to fix damages for violation of [a fraud] law," and thus qualify as pursuant to the "police power" of the government, § 362(b)(4) applies.
B. Application of § 362(b)(4) Exception to Private Plaintiffs
Having established that an application for reasonable attorneys' fees, costs and expenses falls within the exception provided in § 362(b)(4) of the Bankruptcy Code, the question that remains is whether the exception afforded the government under this provision extends to the private citizen qui tam relator. This question is answered first by looking to the plain language of the provision which excepts the "continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power." 11 U.S.C. § 362(b)(4). If it can be called anything, an application for reasonable attorneys' fees, costs and expenses can be called a "continuation" of the proceeding from which they were incurred. Further, since in the present case the plaintiff's request for attorneys' fees, costs and expenses under § 3730(d)(1) is an integral part of a False Claims Act qui tam suit otherwise exempt from the automatic stay provision of the Bankruptcy Code, it follows that relator's request is also exempt from the automatic stay.
In summary, a governmental action to fix reasonable attorneys' fees, costs and expenses falls within the § 362(b)(4) exception to the automatic stay provision of the Bankruptcy Code, 11 U.S.C. § 362(a), provided the action is pursuant to the police or regulatory powers of that governmental unit. In addition, when an action is brought by a private plaintiff, the action is excepted from the automatic stay so long as the action is a "continuation" of and integral to a proceeding that is excepted from the automatic stay. For these reasons, this Court finds for the relator in granting the application for reasonable attorneys' fees, costs and expenses in connection with this case.
C. Reasonableness of the Fees Claimed
NBI argues that the attorneys' fees claimed are excessive and unreasonable. The court does not agree. Recovery of attorneys' fees and costs are an additional, allowable recovery to the relator's share of the money recovered by the United States, and the statute requires award of such fees and costs as are "reasonable." 31 U.S.C. § 3730(c)(2). Defendant has made several blunderbuss objections, but has failed to parse the time and hours to demonstrate that any particular work was duplicative or unreasonable. Defendant argues the relator's counsel should not be compensated for any work after the Justice Department entered the case. The statutory scheme does not so provide,[4] and indeed it is apparent to the court that the vigorous, continued efforts of relator's counsel likely had some impact on the final outcome here.
Defendant's argument that relator's counsel may not obtain 1991 billing rates as an adjustment for delay in payment must also be rejected since this is a contingent fee case. Additionally, it does not appear to the court that any work here was truly fractionable from the claim on which relator prevailed; although he may not have succeeded on particular legal theories, they appear to be part and parcel of one ultimately successful claim that the defendant was defrauding the United States.
Finally, although Robert Seldon originally undertook relator's representation and investigated relator's claims, it is undisputed that he was consulting with David Shapiro about the matter. When Mr. Seldon's firm declined to file suitin this contingent fee caseMr. Shapiro took over. There is no apparent duplication of any effort. Both counsel appear to have worked together *5 cooperatively, and through their joint efforts, they ultimately obtained a substantial recovery.
Accordingly, the court finds that the attorneys' fees, expenses and costs sought by relator are reasonable, and judgment shall be entered against defendant NBI, Inc., in favor of Kenneth L. Marcus, for the total sum of $50,244.64 (of which $49,176 is for attorneys' fees and $1068.64 is for costs and expenses).
SO ORDERED.
ERRATA
On February 20, 1992, the court issued a memorandum opinion and order which was filed on February 20, 1992. In that opinion and order, this court granted the qui tam relator, in a Federal Tort Claims Act qui tam suit, reasonable attorneys' fees, costs, and expenses pursuant to 31 U.S.C. § 3730(c)(2) (1982). The grant of reasonable attorneys' fees, costs, and expenses should have been made pursuant to 31 U.S.C. § 3730(d)(1) (1988). In consideration of the foregoing, it is corrected as stated above.
ORDERED, that the court's February 20, 1992, order is corrected as stated above.
SO ORDERED.
NOTES
[1] This provision provides that the relator "may also receive an amount for reasonable expenses the court finds to have been necessarily incurred and costs awarded against defendant." 31 U.S.C. § 3730(c)(2).
[2] The Committee Reports on the Bankruptcy Reform Act of 1978 yield the following:
Paragraph [§ 362(b)](4) excepts commencement or continuation of actions and proceedings by governmental units to enforce police or regulatory powers. Thus, where a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay.
S.Rep. No. 989, 95th Cong., 2d Sess. 52, reprinted in 1978 U.S.Code Cong. & Admin.News 5787, 5838; H.R.Rep. No. 595, 95th Cong., 2d Sess. 343 (1977), reprinted in 1978 U.S.Code Cong. & Admin.News 5963, 6299 (emphasis added).
[3] The Committee Reports stated the following:
Since the assets of the debtor are in the possession and control of the bankruptcy court, and since they constitute a fund out of which all creditors entitled to share, enforcement by a governmental unit of a money judgement would give it preferential treatment to the detriment of all other creditors.
S.Rep. No. 989 at 52; H.R.Rep. No. 595 at 343, 1978 U.S.Code Cong. & Admin.News 5838, 6299.
[4] The statute provides "[t]he person may also receive an amount for reasonable expenses the court finds to have been necessarily incurred and costs awarded against the defendant." 31 U.S.C. § 3730(c)(2). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537253/ | 979 A.2d 522 (2009)
117 Conn.App. 211
David S. LaBOSSIERE
v.
Catherine A. JONES.
Nos. 29259, 29460, 29865, 30190.
Appellate Court of Connecticut.
Argued May 18, 2009.
Decided September 22, 2009.
*525 Norma Pierce Arel, for the appellant (plaintiff).
Steven H. St. Clair, with whom, on the brief, was Claudia S. Weiss, Danielson, for the appellee (defendant).
FLYNN, C.J., and ALVORD and PETERS, Js.
PETERS, J.
A decision to award counsel fees in a marital dissolution dispute ordinarily is based on an appraisal of the respective financial ability of each party to pay his or her own fees. See General Statutes § 46b-62;[1]Koizim v. Koizim, 181 Conn. 492, 500-501, 435 A.2d 1030 (1980). Where, however, "a party has engaged in egregious litigation misconduct that has required the other party to expend significant amounts of money for attorney's fees, and where the court determines, in its discretion, that the misconduct has not been addressed adequately by other orders of the court, the court has discretion to award attorney's fees to compensate for the harm caused by that misconduct, irrespective of whether the other party has ample liquid assets and of whether the lack of such an award would undermine the court's other financial orders." Ramin v. Ramin, 281 Conn. 324, 357, 915 A.2d 790 (2007); see also General Statutes § 46b-87.[2] In this case, the trial court, because of a former husband's repeated alimony arrearages and his deliberate failure to comply with a documentary subpoena, found that he had wilfully failed to honor his alimony obligations to his former wife, held him in contempt and ordered him to pay her attorney's fees, both for the contempt proceeding and to defend against his subsequent appeals from that proceeding. We affirm the judgments of the trial court.
On August 19, 1998, the court, Hon. Michael P. Conway, judge trial referee, in a judgment incorporating a contemporaneous written settlement agreement of the parties, dissolved the marriage between the plaintiff, David S. LaBossiere, and the defendant, Catherine A. Jones. The judgment obligated the plaintiff to pay the defendant weekly alimony of $400 until she died or remarried and, as additional alimony, required him to reimburse her for her dental and chiropractic expenses. In 2002, after the accrual of an alimony arrearage of $27,600 that the parties agreed to resolve by having the plaintiff remodel the defendant's residence, the trial court, Dannehy, J., reduced the plaintiff's future alimony obligation to $300 a week.
The present litigation arises out of a motion for contempt filed by the defendant on March 7, 2007, in which she claimed an alimony arrearage of $2400. In support of her efforts to demonstrate that the plaintiff had the financial means to pay this arrearage, the defendant served two subpoenas duces tecum on the plaintiff, first *526 on August 6, 2007, and again on August 15, 2007, ordering him to produce various documents listed in an attached schedule A. Because the plaintiff appeared at a rescheduled deposition, on August 22, 2007, without producing any of the listed documentation, the defendant filed a motion for counsel fees and sanctions. At a rescheduled deposition, on September 12, 2007, the only financial document tendered by the plaintiff was an affidavit stating that his income was "unknown."
After a short calendar hearing held by the trial court, Riley, J., on September 17, 2007, to address the plaintiff's failure to produce the documents listed in schedule A, the parties entered into a written stipulation with respect to the defendant's motion for counsel fees and sanctions. The stipulation stated: "[The] [d]efendant's motion for counsel fees [and] sanctions shall be granted such that [the] plaintiff shall be precluded from offering any evidence [or] exhibits other than those . . . produced at the depositions on [August 22, 2007] and [September 12, 2007] in accordance with schedule A of the re-notice of deposition dated [August 15, 2007] attached hereto, other than cancelled checks showing alimony payments to the defendant. The issues of counsel fees and costs may be addressed at the [September 19, 2007] hearing." The plaintiff has not challenged the enforceability of this stipulation.
Two days later, on September 19, 2007, the court conducted a hearing on the defendant's motion for contempt and for attorney's fees. Without disputing the amount of the alimony arrearage, the plaintiff testified that he was paying the alimony as best he could but that his business was down and he had financial obligations to others. He argued that, for these reasons, his failure to pay the alimony arrearage was not wilful. He also questioned the reasonableness of the amount of the attorney's fees sought by the defendant. The court was unpersuaded by the plaintiff's professed lack of knowledge about his own income, found that he had considerable assets and deplored "his failure to produce the documentation requested [by the defendant]." It ordered the plaintiff to pay the $5000 arrearage to which the parties had stipulated within thirty days or face incarceration. It also held him in contempt for his wilful failure to obey prior court orders and awarded the defendant $4825 in attorney's fees and costs. On October 9, 2007, the plaintiff filed his first appeal, AC 29259, to challenge the validity of this judgment. Other appeals have ensued.
Before we address the merits of the plaintiff's claims in his four appeals, we must observe that the plaintiff has significantly impaired our ability to undertake a comprehensive review of the trial court judgments that he asks us to reverse. The rules of practice impose on the appellant the responsibility for providing an adequate record for review. See Practice Book § 64-1. The plaintiff has, however, failed to provide either memoranda of decision or signed transcripts to document any of the rulings with which he takes issue. Although the court file contains some unsigned transcripts that we may consult; see In re Francisco R., 111 Conn.App. 529, 531, 959 A.2d 1079 (2008); the plaintiff bears the responsibility for any gaps in the record.
I
The plaintiff's first appeal, AC 29259, challenges the September 19, 2007 judgment of the trial court on two grounds. He maintains that the court's finding that he had wilfully failed to pay the alimony arrearage of $5000 that he owed the defendant was erroneous because the court did *527 not permit him fully to explain the financial circumstances that accounted for his delinquency. He also maintains that the court improperly awarded the defendant attorney's fees and costs in the amount of $4825 without conducting an evidentiary hearing. We are not persuaded by either argument.
A
The plaintiff's principal contention is that the court improperly found that his failure to pay the alimony arrearage was wilful because, in his view, the court did not permit him fully to present evidence of his impoverished financial circumstances. Because the plaintiff does not deny that the underlying alimony order was sufficiently clear and unambiguous to support a judgment of contempt, we must "determine whether the trial court abused its discretion in issuing . . . a judgment of contempt, which includes a review of the trial court's determination of whether the violation was wilful or excused by a good faith dispute or misunderstanding." In re Leah S., 284 Conn. 685, 694, 935 A.2d 1021 (2007).
The plaintiff's argument references the parties' stipulation, two days before the court hearing, that "[the] plaintiff shall be precluded from offering any evidence [or] exhibits other than those . . . produced at the depositions on [August 22, 2007] and [September 12, 2007] in accordance with schedule A of the re-notice of deposition dated [August 15, 2007] attached hereto, other than cancelled checks showing alimony payments to the defendant." According to the plaintiff, the parties intended this stipulation to govern only the defendant's right to recover attorney's fees and did not mean it to have any relevance to the defendant's claim that the plaintiff's arrearage in alimony payments was wilful.
The defendant argues, in response, that the court properly based its finding of wilfulness on the plaintiff's lack of candor with the court and on his abuse of the discovery process. The record bears this out. The court stated that its review of the court file had disclosed a history of wilful violations of court orders. The court expressed its incredulity at the plaintiff's statement, in his affidavit, that he had no knowledge of his present income. It expressly rejected his excuses for his failure to comply with the defendant's subpoenas.
There is, however, a more fundamental flaw in the plaintiff's argument. The record discloses that there was considerable argument at trial about the scope of the stipulation for schedule A preclusion. Indeed, the court sustained several of the defendant's objections to documentary evidence covered by schedule A that had not been produced at the deposition. As best we can tell, however, the plaintiff never alerted the court to his present claim that the schedule A stipulation was irrelevant to the court's inquiry into the wilfulness of his delay in making alimony payments.[3] The plaintiff has not substantiated this *528 claim of evidentiary error. See Practice Book § 67-4(3). We note as well that, although the court, in accordance with the stipulation, excluded some evidence that the plaintiff would have liked to have presented, the court permitted the plaintiff to offer other significant evidence to show why, in his view, his failure to pay the alimony arrearage was not wilful.
On this state of the record, the plaintiff has failed to show that the trial court abused its discretion in applying the stipulation for schedule A preclusion to the contempt motion as well as to the motion for sanction and counsel fees.
B
The plaintiff's second claim in the first appeal is that the court improperly granted the defendant's motion for attorney's fees for $4825 without conducting a hearing on the matter. In response, the defendant observes that the award was proper because, at the September 19, 2007 hearing, the court addressed the subject of attorney's fees without objection from the plaintiff to this award. We agree with the defendant.
The parties had stipulated that the plaintiff's alimony arrearage was $5000 and that the issue of attorney's fees would be addressed at the September 19, 2007 hearing. Thereafter, at the hearing, the plaintiff testified that he was aware that the defendant was requesting attorney's fees and costs. The plaintiff did not request any further hearing, did not ask the court to undertake an inquiry into the comparative financial situation of the parties and raised no question about the calculation of the amount of fees claimed by the defendant.
"Our law for awarding attorney's fees in contempt proceedings is clear. General Statutes § 46b-87 provides that the court may award attorney's fees to the prevailing party in a contempt proceeding. The award of attorney's fees in contempt proceedings is within the discretion of the court. . . . In making its determination, the court is allowed to rely on its familiarity with the complexity of the legal issues involved. Indeed, it is expected that the court will bring its experience and legal expertise to the determination of the reasonableness of attorney's fees. . . . Moreover, because the award of attorney's fees pursuant to § 46b-87 is punitive, rather than compensatory, the court properly may consider the defendant's behavior as an additional factor in determining both the necessity of awarding attorney's fees and the proper amount of any award." (Citation omitted; internal quotation marks omitted.) Gil v. Gil, 110 Conn.App. 798, 806-807, 956 A.2d 593 (2008).
The plaintiff has failed to cite any legal authority for the proposition that he was entitled to a hearing on attorney's fees beyond the hearing that took place on September 19, 2007. In fact, as noted, the plaintiff did not seek the opportunity to present evidence in opposition to the defendant's request for attorney's fees. Even if we assume, without deciding, that a hearing is required on a party's motion for attorney's fees, the plaintiff has not presented any basis on which the hearing that was held should be deemed inadequate to meet such a requirement. We conclude, therefore, that the court did not abuse its discretion by awarding attorney's fees following the September 19, 2007 hearing.
In sum, we are not persuaded that the court improperly found the plaintiff in contempt for his failure to pay the alimony arrearage that he concededly owed to the defendant. We are similarly unpersuaded that the court improperly awarded attorney's fees in the amount of $4825 to the *529 defendant. In AC 29259, we therefore affirm the judgment rendered by the trial court on September 19, 2007.
II
In response to the plaintiff's appeal from the September 19, 2007 judgment of the trial court, the defendant filed a motion for attorney's fees and costs to defend herself against the appeal. On November 26, 2007, after a hearing at which the court heard evidence about the financial circumstances of the parties, the court awarded the defendant attorney's fees of $7500.
The plaintiff's second appeal, AC 29460, challenges the validity of this award of attorney's fees on two grounds. He maintains that, in making this award, the court improperly (1) relied on the schedule A stipulation to exclude evidence that he proffered with respect to the parties' relative financial ability to pay their own fees and costs pursuant to General Statutes §§ 46b-62 and 46b-82 and (2) awarded attorney's fees to the defendant without conducting an evidentiary hearing to ascertain the parties' relative financial abilities to pay. We are not persuaded by either claim.
A
At the hearing held on November 26, 2007, much of the testimony presented by the parties concerned two motions filed by the defendant that were distinct from her motion for attorney's fees. Those motions alleged that the plaintiff was again in contempt for failing to pay his periodic alimony obligations to the defendant. In the discussion of those motions, the court, over the objection of the plaintiff, referred to the parties' stipulation with respect to schedule A documents as precluding the plaintiff "from offering any evidence [or] exhibits other than those items produced at the deposition on September 22 and September 12." Ultimately, the court postponed a decision on the merits of the contempt motions. Only then did the court consider the merits of the defendant's motion for attorney's fees. It never again mentioned the stipulation.
The plaintiff's complaint that the court improperly applied the schedule A stipulation in making its attorney's fees award founders on his failure to identify any such ruling by the court. The discussion he cites had nothing to do with attorney's fees. He has not called to our attention anything else in the November 26, 2007, transcript to sustain his claim. If the court indeed made the evidentiary ruling with which the plaintiff takes issue, the rules of practice imposed on him the burden of including in his brief or appendix a verbatim statement of his objection at trial and the ground on which the evidence was held to be admissible. See Practice Book § 67-4(3). On the present state of the record, the plaintiff's claim warrants no further review. See Sakon v. Glastonbury, 111 Conn.App. 242, 258, 958 A.2d 801 (2008), cert. denied, 290 Conn. 916, 965 A.2d 554 (2009).
B
The plaintiff's alternate claim challenges the validity of the award of attorney's fees on the ground that the court did not conduct an evidentiary hearing to ascertain the parties' relative financial abilities to pay. As noted, we review an award of attorney's fees under the abuse of discretion standard of review. "This standard applies to the amount of fees awarded . . . and also to the trial court's determination of the factual predicate justifying the award. . . . Under the abuse of discretion standard of review, [w]e will make every reasonable presumption in favor of upholding the trial court's ruling, *530 and only upset it for a manifest abuse of discretion. . . . [Thus, our] review of such rulings is limited to the questions of whether the trial court correctly applied the law and reasonably could have reached the conclusion that it did." (Citations omitted; internal quotation marks omitted.) Schoonmaker v. Lawrence Brunoli, Inc., 265 Conn. 210, 252-53, 828 A.2d 64 (2003).
In advancing his claim of impropriety in the award in this case, the plaintiff asserts that, "[i]n the case at hand, no hearing was held nor was any testimony given regarding attorney fees." The record does not bear this contention out. The court heard considerable testimony about the defendant's financial circumstances. This court has held that "[i]f an award of attorney's fees was sought in the underlying proceeding from which the appeal is being taken, the ruling on that earlier application may substantially control the result on the later application for attorney's fees on appeal." (Internal quotation marks omitted.) Durkin v. Durkin, 43 Conn.App. 659, 664, 685 A.2d 344 (1996). In other words, "where there has been a hearing on financial issues at the time of trial, the trial court may be deemed to have sufficient information to award counsel fees to defend an appeal." Id. Here, the court had adequate information on which to base its award of attorney's fees.
Furthermore, the court found that the plaintiff had a history of egregious litigation misconduct and based its award of attorney's fees on his behavior, in reliance, inter alia, on Ramin v. Ramin, supra, 281 Conn. at 357, 915 A.2d 790.[4] The plaintiff has not challenged the court's finding in this regard and has not addressed its significance on appeal.
Because the record at trial does not support either of the reasons advanced by the plaintiff for setting aside the court's award of attorney's fees to the defendant, he cannot prevail in his second appeal. In AC 29460, we therefore affirm the judgment rendered by the court on November 26, 2007.
III
During the pendency of the plaintiff's first two appeals, the defendant filed two additional motions for attorney's fees. On December 17, 2007, she filed a motion for attorney's fees and costs to defend herself against the plaintiff's second appeal. On January 11, 2008, she filed a motion for contempt alleging further wilful arrearages in the plaintiff's weekly alimony obligations. After hearings held on February 19 and 21, 2008, and further briefing, the court rendered a judgment on March 28, 2008, ordering the plaintiff to pay the defendant $500 for attorney's fees with respect to her contempt motion and $3000 for attorney's fees for her defense of the plaintiff's second appeal. The plaintiff's third appeal, AC 29865, challenges the validity of this judgment.[5]
The plaintiff's appeal raises two issues. The plaintiff claims that the court improperly (1) failed to credit evidence of lack of wilfulness in finding that he had wilfully failed to make timely alimony payments and (2) acted without evidence of each parties' relative ability to pay his or her own fees in finding that the defendant was *531 entitled to counsel fees. We are not persuaded by either claim.
A
The court based its judgment holding the plaintiff in contempt for wilfully failing to pay alimony on a timely basis on current financial affidavits from both parties, on copies of the plaintiff's cancelled alimony checks, on postmarks on several related envelopes and on the plaintiff's history of delay in making alimony payments. It awarded the defendant $500 in attorney's fees.
The plaintiff asserts, on appeal, that the court's award was improper because the court did not sufficiently credit his testimony, and that of his secretary, that it was the secretary who was responsible for a delay in mailing two alimony payments to the defendant. The plaintiff maintains that this testimony definitively established that his delinquency was not wilful and that he, therefore, should not have been held in contempt.[6]
It is undisputed that a judgment of civil contempt is improper if "the contemnor, through no fault of his own, was unable to obey the court's order." (Internal quotation marks omitted.) In re Leah S., supra, 284 Conn. at 692, 935 A.2d 1021. Accordingly, "a court may not find a person in contempt without considering the circumstances surrounding the violation to determine whether such violation was wilful." Wilson v. Wilson, 38 Conn. App. 263, 275-76, 661 A.2d 621 (1995). It is, however, equally undisputed that, if a finding of wilful misconduct is based on a court's determination of the credibility of relevant testimony at trial, we will overturn it only if the record demonstrates a manifest abuse of discretion. "[T]he trial judge is the sole arbiter of the credibility of the witnesses and the weight to be given specific testimony and, therefore, is free to accept or reject, in whole or in part, the testimony offered by either party." (Internal quotation marks omitted.) DiVito v. DiVito, 77 Conn.App. 124, 138, 822 A.2d 294, cert. denied, 264 Conn. 921, 828 A.2d 617 (2003).
We are unpersuaded by the plaintiff's argument that the court abused its discretion in declining to attach definitive weight to the testimony of the plaintiff's secretary that she was responsible for mailing alimony checks to the defendant and that, only on two occasions, she had inadvertently failed to do so. The plaintiff might have asked the court to explain its reasoning by filing a motion for articulation pursuant to Practice Book § 66-5. "[W]e will, in the absence of a motion for articulation, assume that the trial court acted properly." (Internal quotation marks omitted.) Berglass v. Berglass, 71 Conn.App. 771, 789, 804 A.2d 889 (2002).
We therefore affirm the court's award of $500 to the plaintiff for attorney's fees with respect to her contempt motion.
B
The plaintiff also challenges the court's award of counsel fees of $3000 to defend the second appeal without holding a hearing or taking testimony or other evidence regarding attorney's fees, pursuant *532 to §§ 46b-62 and 46b-82.[7] Our standard for review of the court's award is whether the court abused its discretion. Utz v. Utz, 112 Conn.App. 631, 641, 963 A.2d 1049, cert. denied, 291 Conn. 908, 969 A.2d 173 (2009). We are persuaded that the court did not abuse its discretion.
At the end of the hearing that began on February 19, 2008, and was continued on February 21, 2008, the court discussed the pending award of attorney's fees. The defendant had submitted an affidavit of attorney's fees on the latter day. The court informed the parties that "with regard to affidavit of counsel fees, this needs to either be agreed upon as to amount, or somebody would need to produce evidenceas to the basis for the attorney's fees. The court can't accept an affidavit by case law, unless it's an affidavit that's agreed upon . . . or not objected to." The court expressly noted that it was taking under advisement both the award of fees for the contempt and the award of the fees for the second appeal.
The plaintiff's appeal brief notes that, at the February 21, 2008 hearing, the court did not hear testimony or receive other evidence regarding attorney's fees, but it does not address the significance of the court's statement that it could accept an affidavit "unless objected to." The plaintiff has not called to our attention any request on his part for a further hearing on this subject or any objection that he raised against the affidavit of fees submitted by the defendant on the date of the hearing.
In Lambert v. Donahue, 78 Conn.App. 493, 827 A.2d 729 (2003), this court refused to consider the appeal of the plaintiff because, although the trial court ordered the plaintiff to pay attorney's fees, "the record [did] not reveal the court's reasoning, specifically, whether or to what extent it considered the [statutory] criteria. . . ." Id., at 509, 827 A.2d 729. The record in the present case is similarly deficient.
The plaintiff concedes that it is his burden to establish that the court's award of counsel fees was an abuse of discretion. On the record before us, the plaintiff has not made the requisite showing. In AC 29259, we affirm the judgment rendered by the court on March 28, 2008.
IV
On June 6, 2008, while the plaintiff's earlier appeals were pending, the defendant filed a motion for counsel fees to defend herself against the plaintiff's third appeal. In a judgment rendered after a hearing held on July 21, 2008, the court granted the defendant's motion and awarded her counsel fees of $3000. The plaintiff's fourth appeal, AC 30190, challenges the validity of that judgment.
At a hearing held on July 21, 2008, the court heard argument on two motions. The first was the defendant's motion for a protective order to limit the scope of a notice of deposition that had been filed by the plaintiff. The second was the defendant's motion for attorney's fees. The court denied the defendant's motion for a protective order but imposed certain substantive and temporal constraints on the *533 scope of the inquiry that it permitted the plaintiff to pursue.[8] Neither party has raised any issue with respect to the court's ruling.
The court then granted the defendant's motion for attorney's fees of $3000. It did so in reliance on financial affidavits previously filed by the parties because neither of them had complied with the requirements in the rules of practice and the court's standing orders that such affidavits be filed ten days before a hearing. The court also held that "we'll deal with the issue of substantiation of the attorney's fees by houran hourly fee at a later date insofar as it deals with the $3000." There is nothing in the record to indicate that any such further inquiry was ever pursued by the plaintiff.
The plaintiff's principal claim on appeal is that the court abused its discretion in denying his request that the deposition go forward before the court made a further fee award to the defendant. The court declined this request because "the premise of the deposition is to go back and search out other information and financial information" while "the appeal is dealing with different issues." It was reasonable for the court not to await a broad inquiry into the defendant's financial history before deciding whether the defendant presently needed financial assistance to defend herself against the plaintiff's pending appeal.[9] We know of no authority to the contrary, and the plaintiff has cited none.
The plaintiff also contends that the court abused its discretion by refusing to accept a financial affidavit that he tendered on the day of the hearing. Without contesting the fact that his filing was late, the plaintiff argues that the court discriminated against him because it accepted a late filed affidavit from the defendant. In fact, however, the defendant acquiesced in the court's reliance on the affidavit she had previously filed. The record, therefore, does not substantiate this claim.[10]
The plaintiff further argues that the court abused its discretion by awarding attorney's fees to the defendant without a proper evidentiary foundation either with respect to the comparative financial resources of the parties or with respect to the calculation of the amount of the fees. He has failed, however, to indicate when, if ever, he availed himself of the opportunity provided by the court to require the defendant to make the showings that he now claims to have been required.
The judgments are affirmed.
In this opinion the other judges concurred.
NOTES
[1] General Statutes § 46b-62 provides in relevant part: "In any proceeding seeking relief under the provisions of this chapter . . . the court may order either spouse . . . to pay the reasonable attorney's fees of the other in accordance with their respective financial abilities and the criteria set forth in section 46b-82.. . ."
[2] General Statutes § 46b-87 provides in relevant part: "When any person is found in contempt of an order of the Superior Court entered under section 46b-60 to 46b-62, inclusive, 46b-81 to 46b-83, inclusive, or 46b-86, the court may award to the petitioner a reasonable attorney's fee and the fees of the officer serving the contempt citation, such sums to be paid by the person found in contempt, provided if any such person is found not to be in contempt of such order, the court may award a reasonable attorney's fee to such person. . . ."
[3] Indeed, our examination of the transcript reveals that, on at least two occasions, exchanges between the plaintiff's attorney and the court make it clear that the plaintiff agreed that the stipulation was applicable to the hearing in its entirety. First, in a discussion about whether certain testimony was to be excluded, as the defendant maintained, the plaintiff's attorney stated: "But I think if you look at the order, it definitely specifies, in accordance with schedule A, the understanding was that these items on schedule Ahe couldn't produce anything else to try to back up why he hadn't paid. This is simply cross-examination on what she's already asked him." (Emphasis added.) After the conclusion of the presentation of testimony, the plaintiff's attorney stated: "Most of the evidence is not admissible because of the schedule A situation, but it's clear that [the plaintiff] has had financial problems."
[4] We note, additionally, that the plaintiff has not identified anything in the trial court record to show that he requested a further hearing on the amount of the fees sought by the defendant.
[5] This court granted the plaintiff's motion to consolidate his first three appeals.
[6] Although the plaintiff objected at trial that, in deciding whether his recent delays in paying alimony were wilful, the court should not consider evidence of prior delays in his fulfillment of his alimony obligations to the defendant, his appellate brief alludes to this claim without citation of relevant authorities. The claim is therefore deemed to have been abandoned. Grimm v. Grimm, 276 Conn. 377, 393, 886 A.2d 391 (2005), cert. denied, 547 U.S. 1148, 126 S.Ct. 2296, 164 L.Ed.2d 815 (2006).
[7] Although the plaintiff does not make clear whether, in addition to challenging the merits of the award of attorney's fees, he also challenges the amount of attorney's fees awarded, we note that, at the hearing on February 21, 2008, the court made the parties aware that it could not rely on the affidavit of fees to make its award unless the parties agreed to the affidavit or did not object to it. The defendant submitted an affidavit of attorney's fees on February 21, 2008, and the record reveals no objection by the plaintiff, nor any request for a hearing on the amount of attorney's fees.
[8] The plaintiff was allowed to ask the defendant questions about her purchase, transfer or sale of real property since August 19, 1998, and about money transfers of more than $10,000 to her children within the last seven years.
[9] Indeed, the breadth of the information sought in the plaintiff's notice of deposition underscores that the court's refusal to defer the hearing on attorney's fees was reasonable.
[10] The defendant's counsel stated: "It's virtually the same as the last one. She has more debt now, Your Honor. That's the only difference." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537495/ | 355 A.2d 400 (1976)
Vera M. LATHAM
v.
STATE of Rhode Island DEPARTMENT OF EDUCATION et al.
No. 74-20-Appeal.
Supreme Court of Rhode Island.
April 7, 1976.
Natale L. Urso, Westerly, Charles H. Eden, Providence, for plaintiff.
*401 Julius C. Michaelson, Atty. Gen., Coffey, McGovern & Novogroski, John G. Coffey, Jr., Providence, for defendants.
OPINION
DORIS, Justice.
This is an appeal from a Superior Court judgment dismissing the plaintiff's appeal from a decision of the Board of Regents for Education. The Board of Regents had upheld a decision of the Commissioner of Education in which he had upheld a decision of the North Kingstown School Committee not to renew the teaching contract of the plaintiff for the 1971-72 school year.
The cause was heard on an agreed statement of facts by a Superior Court justice, the pertinent portions of which are as follows: The town of North Kingstown had employed plaintiff, Vera M. Latham, as a nontenured teacher for the school year 1970-71. On or about February 24, 1971, the North Kingstown School Committee notified, plaintiff that her contract would not be renewed for the 1971-72 school year. The plaintiff then requested a hearing and a statement of causes pursuant to G.L. 1956 (1969 Reenactment) § 16-13-4. After hearing, the school committee reaffirmed its decision not to renew plaintiff's contract for the 1971-72 school year. Thereafter, plaintiff appealed to the Commissioner of Education who denied her appeal on September 28, 1971. The plaintiff then appealed to the Board of Regents which on May 3, 1973, denied the appeal. On August 16, 1973, plaintiff filed her appeal from the decision of the Board of Regents to the Superior Court.
After the appeal to the Superior Court, the North Kingstown School Committee intervened as a party defendant and filed a motion to dismiss the appeal on the ground that the appeal from the decision of the Board of Regents is governed by § 42-35-15(b), the Administrative Procedures Act, and that since it was filed more than 30 days following the decision of the Board of Regents, the Superior Court was without jurisdiction to hear the appeal.
The Superior Court justice citing Jacob v. Burke, 110 R.I. 661, 296 A.2d 456 (1972), ruled that any teacher, whether tenured or nontenured, after exhausting administrative review has an express right to judicial review in the Superior Court under the provisions of § 16-13-4.
The Superior Court justice then stated that since § 16-13-4 is not specifically exempt from the operation of chapter 35 of title 42 the appeal period set forth in § 42-35-15(b) is applicable in this case. The trial justice then concluded that plaintiff's appeal was not filed within the limit stated for appeal in § 42-35-15(b) and granted defendant's motion to dismiss the appeal.
The defendant contends that the provisions of the Administrative Procedures Act, including the 30-day period within which to appeal from agency decisions, is applicable to tenured and nontenured teachers notwithstanding that chapter 49 of title 16 is excluded from the application of the Administrative Procedures Act. He argues that in 1969 when the Legislature amended section 18 of the Administrative Procedures Act by providing that chapter 49 of title 16 would not be subject to the Act it did not exempt the Board of Regents itself from its provisions but only those functions of the Board that are governed by chapter 49. The defendant further argues that § 16-13-4, under which plaintiff's appeal to the Superior Court is filed is not specifically exempted by chapter 49 and, therefore, the 30-day appeal period set out in § 42-35-15(b) is applicable to plaintiff's appeal.
The plaintiff argues that § 16-49-12 (formerly § 16-49-15) expressly exempts decisions of the Board of Regents from judicial review under the Administrative Procedures Act and that under Jacob v. Burke, supra, all decisions of the Board of Regents are exempt from appeal under the Administrative Procedures Act, but that in *402 those cases involving tenured teachers dismissed for cause or nontenured teachers whose contracts are not renewed, there is an express right of appeal to the Superior Court under § 16-13-4. The plaintiff also argues that by reason of § 42-35-18(a) (17), chapter 49, title 16 creating the Board of Regents is specifically exempted from the provisions of the Administrative Procedures Act.
The trial justice correctly points out that in Jacob v. Burke, supra, we stated that an appeal of a tenured or nontenured teacher from a decision of the Board of Regents is properly governed by § 16-13-4, and also that as a precondition to taking such an appeal, plaintiff must have exhausted all available remedies within the particular administrative agency.
The trial justice, however, was of the opinion that such a procedure applies to all administrative agencies and is applicable to the instant controversy since § 16-13-4 does not set forth any time limits for the filing of an appeal. The Superior Court justice was of the opinion that if it was the intention of the Legislature to exempt chapter 13 of title 16 then it would have so stated specifically in § 42-35-18(a), and that if the provisions of the Administrative Procedures Act do not apply to § 16-13-4, as urged by plaintiff, then the statute lacks any definite period within which an appeal might be taken, which appeared to her to be a doubtful intention by the Legislature. The Superior Court justice ruled the Administrative Procedures Act, including the 30-day appeal period, applicable to the present controversy and granted defendant's motion to dismiss plaintiff's appeal.
In the case of Jacob v. Burke, supra, we pointed out that there were two different statutes governing appeals within the Department of Education. We stated that § 16-39-2 governed all appeals from local school committee decisions excepting those involving tenured or nontenured teachers which were governed by § 16-13-4.
In Jacob we stated:
"The plaintiff, on the other hand, correctly points out that said 1969 reorganization act, specifically § 16-49-15[*], expressly exempts decisions of the board of regents from judicial review under the provisions of the Administrative Procedures Act." (Emphasis added.) Id. at 668, 296 A.2d at 460.
We further said:
"Specifically, whereas the former `department of education' consisted of a commissioner of education and a board of education, the reorganized department consists of a commissioner of education and a board of regents. However, the effect of the reorganization was not to eliminate administrative review within the agency for teachers who have been dismissed for cause or whose contracts have not been renewed. Rather, the administrative review for such teachers is identical to that of any other person aggrieved. Having exhausted such administrative review, however, tenured teachers dismissed for cause, or nontenured teachers whose contracts are not renewed, unlike all other persons aggrieved by the decision of a local school board, have an express right to judicial review in the Superior Court." Id. at 670-71, 296 A.2d at 461.
We reaffirm what we pointed out in Jacob, that all decisions of the Board of Regents are exempt from judicial review under the provisions of the Administrative Procedures Act including those appeals of tenured and nontenured teachers under § 16-13-4. The trial justice therefore erred in holding that the Act applied to plaintiff's appeal, and that plaintiff's appeal was not filed within the time limits stated for appeal in § 42-35-15(b).
*403 Where there is no limit set forth in the statute as to the time for filing an appeal to the Superior Court as is the case here, the question remains as to the time when an appeal must be filed. We follow the generally accepted rule that, in the absence of any limitation fixed by statute, an appeal must be filed within a reasonable time otherwise the appeal will be denied because of laches. However, laches is not, like limitation, a mere matter of time, but is principally a question of the inequity of permitting the claim to be enforcedan inequity founded on some change in the condition or relation of the property or party involved. Here, we can perceive no reason why the doctrine of laches should be invoked and, therefore, hold that the time within which the plaintiff filed her appeal to the Superior Court is reasonable.
The defendant argues that plaintiff has no right of appeal to this court, contending that the only course of review available to a party aggrieved by the Superior Court decision in cases wherein that court is given original appellate jurisdiction under the provisions of § 16-13-4 is by way of petition for common law certiorari to this court.
In Schiavulli v. School Comm., 114 R.I. 443, 334 A.2d 416 (1975), we noted that in designating the Superior Court as the tribunal having original appellate jurisdiction in matters of dismissals or renewal of teachers' employment contracts, the Legislature has failed to provide a vehicle for review of the action taken in the Superior Court. We stated that lacking the statutory jurisdiction, we will exercise the revisory and appellate jurisdiction that we have over all inferior tribunals and issue a prerogative writ. We set forth that the procedure to be followed in cases of this kind wherein review is sought in this court of the action of the Superior Court in reviewing actions taken by the Board of Regents will be had by way of a petition for common law certiorari. Our decision in Schiavulli, however, was filed after the instant case had been filed in this court and in the circumstances of this case we will not fault plaintiff for failure to follow the rule and we will fashion our own writ. Schiavulli v. School Comm., supra; Hester v. Timothy, 108 R.I. 376, 275 A.2d 637 (1971).
Consequently, we will treat plaintiff's appeal as the equivalent of a writ of certiorari for the purpose of reviewing the Superior Court's action in dismissing plaintiff's appeal from the decision of the Board of Regents on the ground that the Superior Court was without jurisdiction to hear the appeal.
In the absence of specific statutory requirements, certiorari is addressed solely to the court's discretion which will not be exercised where there has been unreasonable and unexplained delay in seeking relief. Fournier v. Standard Wholesale Co., 108 R.I. 744, 279 A.2d 403 (1971); Mancini v. Superior Court, 77 R.I. 262, 75 A.2d 300 (1950). Here, in the circumstances of the case we can find no unreasonable delay on the part of the plaintiff.
Treating the proceeding herein as if it were certiorari, the judgment entered in the Superior Court is quashed, and the records in the case are ordered returned to the Superior Court with our decision endorsed thereon.
ROBERTS, C. J., did not participate.
NOTES
[*] Now § 16-49-12. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537255/ | 979 A.2d 1279 (2009)
2009 ME 98
The PORTLAND COMPANY
v.
The CITY OF PORTLAND.
Docket: Cum-08-684.
Supreme Judicial Court of Maine.
Argued: June 17, 2009.
Decided: September 3, 2009.
*1283 Deborah M. Mann, Esq. (orally), Natalie L. Burns, Esq., Jensen Baird Gardner & Henry, Portland, ME, for the City of Portland.
Michael D. Traister, Esq. (orally), Peter S. Plumb, Esq., Murray, Plumb & Murray, Portland, ME, for The Portland Company.
Panel: CLIFFORD, LEVY, SILVER, MEAD, and GORMAN, JJ.
SILVER, J.
[¶ 1] The City of Portland appeals, and the Portland Company cross-appeals, from several judgments of the Superior Court (Cumberland County, Delahanty, J.), following trial, on the Portland Company's complaint alleging an unconstitutional taking of its non-fee interest in three parcels of land owned by the City at the time of the taking. We hold that (1) the appeal was timely; (2) the court did not err in holding that the Portland Company had a property interest in these parcels; (3) there is no basis on which to reject the City's finding of exigent circumstances; (4) the takings are for a public use; (5) the court did not err in finding that the Portland Company waived its coercion claim; and (6) the Portland Company is not entitled to attorney fees.
I. BACKGROUND
[¶ 2] This appeal concerns three contiguous parcels of land, referred to by the parties as A-1, A-2, and A-3, located adjacent to the Ocean Gateway Marine Passenger Terminal at the eastern end of Commercial Street in Portland. The Portland Company asserts an interest, granted to it by deed in 1865, in certain railroad track rights over the three parcels. Pursuant to the 1865 deed, the Atlantic and St. Lawrence Railroad Company and the Grand Trunk Railroad Company granted the Portland Company, which owned adjacent land, the right to connect to railroad tracks over land owned by the Atlantic and St. Lawrence Railroad Company and leased by the Grand Trunk Railroad Company:
The said Grand Trunk Railroad Company also grants to the Portland Company and its assigns the right to maintain a connection from the works of the latter by one or two tracks with tracks of the Railroad Company leading to its station building in such manner as shall be suited *1284 to the convenience of both companies. And said Atlantic Company, if it shall be at any time in possession of the said railroad station grounds and buildings will in like manner grant to the Portland Company and its assigns the right to continue and maintain such connection.
[¶ 3] The Atlantic and St. Lawrence Railroad Company land came to be owned by the Canadian National Railway, which in 1988 brought an action against Phineas Sprague Sr., a successor-in-interest to the Portland Company, for trespass and nuisance. See Canadian Nat'l Ry. v. Sprague, 609 A.2d 1175, 1177 (Me.1992). Regarding the track rights at issue here, the referee who reviewed the case issued a report finding that the Portland Company and its successors-in-interest held an easement appurtenant to the land. The referee also found that, although the track rights were in abeyance, they had not been abandoned or extinguished. The Superior Court adopted the referee's report. Canadian Nat'l Ry. v. Sprague, CV 88-1420 (Me.Super. Ct., Cum. Cty., June 3, 1991) (Alexander, J.). We affirmed the judgment following Sprague's appeal from issues other than those raised in the present appeal. Canadian Nat'l Ry., 609 A.2d at 1176-79.
[¶ 4] In 1993, the Canadian National Railway transferred the property at issue to the City, with the exception of a small parcel that it had previously transferred to the Portland Water District. In 1996, the Portland Company, whose president and owner is Phineas Sprague Jr., repurchased the land owned by Phineas Sprague Sr.
[¶ 5] In 2002, the City's planning office completed a master plan to develop the eastern waterfront. The master plan focused on the development of the area adjacent to the Ocean Gateway Marine Passenger Terminal. The development at issue on parcels A-1, A-2, and A-3 is outlined and discussed in the master plan, including the extension of Hancock Street as a city street, the construction of parking garages, and other commercial development.
[¶ 6] In 2003, based on the provisions set forth in the master plan, the City issued a request for proposals for a parking garage and other development on parcel A-2. The development of this garage and other parking garages is part of an overall plan to increase the number of available garage parking spaces near the waterfront. The request for proposals required the developer to commit to a 600-car structured parking facility; to participate in the "Park & Shop" program; to operate with hours compatible with the Casco Bay Island Ferry schedule; to charge not more than 110% of the average rates charged by city-owned parking garages; to be available for snow-ban parking; and to allow for off-hours residential use.
[¶ 7] During 2004 and 2005, the City, seeking to extinguish the Portland Company's track rights, negotiated with the Portland Company for an exchange of the track rights for certain marina rights. They were unable to reach an agreement.
[¶ 8] In April 2005, the City accepted the proposal of Riverwalk, LLC for the development of parcel A-2. Riverwalk's proposal included a multi-story building with a combination of residential and commercial uses on parcel A-2, along with the construction of a parking garage on privately owned land on the opposite side of Fore Street, across from parcel A-2. Shortly after the City accepted Riverwalk's proposal, the Portland Company granted Riverwalk an option to purchase the track rights in an amount to be set by an appraiser, but not to exceed $2,000,000. In June 2005, the City offered $5002 for the release of the track rights, based on an appraisal obtained by the City. The City *1285 stated that it would pursue condemnation if the Portland Company would not agree to a sale, because time was of the essence. The Portland Company declined the City's offer. The Portland Company's appraiser valued the track rights at between $1,900,000 and $2,000,000.
[¶ 9] The City passed an order of condemnation in July 2005 to acquire the Portland Company's track rights and thereby extinguish them. The condemnation order's declaration of purpose states that the track rights are to be taken so that the land "can be used for the construction of a municipal road, to create public parking on a nearby lot and for economic development." The condemnation order's findings state that the "public exigency requires the immediate taking of the property interest" of the Portland Company.
[¶ 10] Parcel A-1 is a newly created city street known as the Hancock Street Extension. The condemnation order findings state that it would not be in the best interest of the public or the City to construct a railroad station on any of the City owned land and that, for safety, the City intends to prohibit rail crossings on the Hancock Street Extension.
[¶ 11] Parcel A-2 has since been transferred from the City to Riverwalk for the development of a condominium, retail space, and public space. The City and Riverwalk entered into a lease agreement for the parking garage pursuant to which the City agreed to rent half of the parking spaces and Riverwalk agreed that at the termination of the lease, residents of islands within the City would be placed at the head of any waiting list for individual monthly parking spaces.
[¶ 12] Parcel A-3 is to be used for economic development as buildings and an additional parking garage. The condemnation order findings further state that the Portland Company's track rights on parcel A-3 make it "impossible to market the City's property for economic development," and that the track rights also impede lending and prevent development. The condemnation order and subsequently issued certificate provide for damages of $5002.
[¶ 13] In July 2005, the Portland Company filed a verified complaint. The Portland Company alleged an unconstitutional taking, challenging the City's findings of public exigency and public use and appealing the City's award of damages. The Portland Company also asserted several other claims, including a claim that the City violated 23 M.R.S. § 154-B (2008)[1] by coercing the Portland Company to accept a less advantageous agreement with Riverwalk than the Portland Company otherwise could have obtained.
[¶ 14] Shortly after the Portland Company filed its complaint, the Portland Company and Riverwalk executed a memorandum of agreement pursuant to which Riverwalk agreed to pay the Portland Company $100,000 for the Portland Company's track rights in parcels A-1 and A-2, provided the City would agree to certain stipulations. In August 2005, the City and the Portland Company entered into a stipulation pursuant to which the City agreed not to use the Portland Company's release of the track rights to Riverwalk as evidence that the track rights are without *1286 value, and agreed not to use the agreement between the Portland Company and Riverwalk in defending against the Portland Company's challenge to the legality of the taking. The stipulation also provided that the Portland Company waived "any claim to receive damages or other payment or relief" with respect to parcels A-1 and A-2.
[¶ 15] The court held a three-day jury-waived trial in May 2007. In a judgment entered on September 13, 2007, the court found that the City took the Portland Company's rights in parcels A-1 and A-2 for a public use and demonstrated exigent circumstances. However, the court restored the Portland Company's rights in parcel A-3 because it found that the City did not demonstrate public exigency as to that parcel. In reaching this conclusion, the court found that development of parcel A-3 was not included in the immediate plan for development and that its projected use as a parking facility is not a change from its current use. The court also found that the City had not acted in bad faith with respect to parcel A-3.
[¶ 16] Four additional orders followed. On September 21, 2007, the court granted the Portland Company's cross-motion for summary judgment, holding that res judicata prevents relitigation of the referee's report, the adoption of which was affirmed in Canadian Nat'l Ry., 609 A.2d at 1176, regarding the nature of the Portland Company's property interest. On September 24, 2007, the court granted the City's motion in limine, holding that the Portland Company waived any claims regarding parcels A-1 and A-2 when it entered into the stipulation with the City. In that order, the court also held that the only remaining claim was for damages for the City's temporary taking of parcel A-3. On January 7, 2008, the court approved the parties' joint statement that the only remaining issue was the Portland Company's request for attorney fees. On November 14, 2008, the court found that the Portland Company was the overall prevailing party, but denied its request for attorney fees. The City appealed, and the Portland Company cross-appealed.
II. DISCUSSION
A. Timeliness of the Appeal
[¶ 17] The Portland Company argues that the City's appeal should be dismissed as untimely, pursuant to M.R. Civ. P. 54(b)(2) and M.R.App. P. 2(b)(3), 4(c). M.R. Civ. P. 54(b)(2) states in part:
In an action in which there is a claim for attorney fees, a judgment entered on all other claims shall be final as to those claims unless the court expressly finds that the claim for attorney fees is integral to the relief sought.
M.R.App. P. 2(b)(3) provides that the time within which an appeal may be taken is twenty-one days after entry of the judgment from which the appeal is taken. M.R.App. P. 4(c) provides that an appeal may be dismissed if an appellant fails to comply with the time limitations set forth in the Rules. The Portland Company argues that the appeal period began to run on January 7, 2008, because that was when the court entered an order approving the parties' joint statement that the only remaining issue was the Portland Company's request for attorney fees.
[¶ 18] We do not interpret M.R. Civ. P. 54(b)(2) to preclude the City's appeal, for two reasons. First, Rule 54(b)(2) provides that a final judgment, for purposes of appeal, is a judgment entered on all claims other than attorney fees, unless attorney fees are integral to the relief sought and the court makes an express finding to that effect. Therefore, a final judgment, pursuant to Rule 54(b)(2), must *1287 address claims other than attorney fees. The judgment entered on January 7, 2008, does not address any claims other than attorney fees; rather, it is a procedural order, entered upon a stipulation, to clarify that the one remaining issue was attorney fees, and to provide that it would be resolved based on the briefs rather than by a trial. That judgment therefore is not "a judgment entered on all other claims," and Rule 54(b)(2) does not apply. We also note that the Portland Company appropriately conceded that the prior judgment, entered on September 24, 2007, was not a final judgment because it states that the Portland Company's damages claim as to parcel A-3 remained to be decided.
[¶ 19] Second, it is clear from the court's November 14, 2008, judgment denying attorney fees that the claim for attorney fees is integral to the relief sought. In the November 14 judgment, the court notes that the Portland Company's claim for attorney fees is based on state and federal statutes, including 23 M.R.S. § 3029 (2008); 23 M.R.S. § 154 (2008); 42 U.S.C.S. § 1988 (2009); and 42 U.S.C.S. § 1983 (2002), and on allegations of tortious conduct and bad faith by the City. The court made the express finding that the City had not acted with egregious or tortious conduct, and ultimately rejected attorney fees on each of the grounds that the Portland Company had asserted. Although the court does not describe the Portland Company's attorney fee claims by using the term "integral to the relief sought," its express finding and its judgment make it clear that the court dealt with those claims as though they were integral. For purposes of M.R. Civ. P. 54(b)(2), the court made the requisite finding that the attorney fee claims were integral, and, for that reason, the prior judgments were not final.
B. Prior Litigation of the Portland Company's Property Interest
[¶ 20] The City argues that the court erred in holding that the doctrine of res judicata precludes the City from litigating the issue whether the Portland Company has an appurtenant easement or some other interest, or whether the Portland Company's interest has been extinguished. The City argues that the prior litigation does not resolve these issues.
[¶ 21] We review a grant of a summary judgment de novo, considering "the evidence in the light most favorable to the party against whom judgment has been granted to decide whether the parties' statements of material facts and the referenced record material reveal a genuine issue of material fact." Brawn v. Oral Surgery Assocs., 2003 ME 11, ¶ 15, 819 A.2d 1014, 1022 (quotation marks omitted). "We will affirm a grant of summary judgment if the record reflects that there is no genuine issue of material fact and the movant is entitled to a judgment as a matter of law." Burdzel v. Sobus, 2000 ME 84, ¶ 6, 750 A.2d 573, 575.
[¶ 22] We review de novo a determination that res judicata bars a particular litigation. Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 7, 940 A.2d 1097, 1099. Under the doctrine of res judicata, a party and its privies are barred from relitigating claims or issues that have already been decided. Id. ¶¶ 7-9, 940 A.2d at 1099-1100. "Issue preclusion, or collateral estoppel, prevents the relitigation of factual issues already decided if the identical issue was determined by a prior final judgment, and the party estopped had a fair opportunity and incentive to litigate the issue in a prior proceeding." Id. ¶ 9, 940 A.2d at 1100 (quotation marks omitted).
*1288 [¶ 23] The Portland Company is entitled to a summary judgment as a matter of law on this issue because the prior litigation determined that the Portland Company's predecessor-in-interest had an appurtenant easement that had not been extinguished or abandoned. The court did not err in concluding that the doctrine of res judicata precludes relitigation of that finding. Although the City argues that the extinguishment issue should not be considered barred by res judicata because it was decided only as of the time of the prior litigation, the only relevant event since then is the City's own eminent domain proceeding. The City cannot use its own eminent domain proceeding to argue that the Portland Company has no valid property interest.
C. The Portland Company's Constitutional Claims
[¶ 24] The City took the track rights pursuant to 23 M.R.S. §§ 3022, 3023 (2008); and 30-A M.R.S. § 3101 (2005);[2] and made findings as to both public exigency and public use. The Maine Constitution, article I, section 21, states: "Private property shall not be taken for public uses without just compensation; nor unless the public exigencies require it."
[¶ 25] We review directly the decision of the municipality in this appeal under M.R. Civ. P. 80B. See Nestle Waters N. Am., Inc. v. Town of Fryeburg, 2009 ME 30, 32, ¶ 967 A.2d 702, 712. We review a municipality's legislative finding of public exigency solely to determine whether there was abuse of the process by which the finding of public exigency was made:
A taking by eminent domain will not be reversed on appeal absent a showing that the power of eminent domain has been abused. Although a legislative determination that the taking was for a public purpose is a judicially reviewable decision, a finding of public exigency is not reviewable by the courts unless there was no rational basis to support a finding that an exigency existed.
Fuller v. Town of Searsport, 543 A.2d 361, 363 (Me.1988) (citation omitted). A finding of public exigency involves a determination that the taking was necessary; the property interest was taken only to the extent necessary; and the property is suitable for the particular public use for which it was taken. Dyer v. Dep't of Transp., 2008 ME 106, ¶ 19, 951 A.2d 821, 826-27. In an eminent domain action, a property owner has no constitutional right to have the question of public exigency judicially reviewed, except to determine whether the governmental authority acted in bad faith or abused its power. Id. ¶ 19, 951 A.2d at 827.
[¶ 26] The Portland Company challenges the City's finding of public exigency on three grounds, all of which we reject. The Portland Company's first argument relates to parcels A-1 and A-2. The Portland Company contends that the City abused its condemnation power by unduly pressuring the Portland Company into reaching an agreement with Riverwalk. This allegation, even if proved, would not form a valid basis for a challenge to a finding of public exigency. To pursue a claim for judicial review, the *1289 property owner must allege an abuse of the process by which the governmental entity determined that a public exigency exists. Id. ¶ 19, 951 A.2d at 826-27. The Portland Company makes no such allegation; rather, it alleges that the City abused the process by coercing the Portland Company to reach an agreement with Riverwalk. The Portland Company's coercion claim must be brought, if at all, pursuant to 23 M.R.S. § 154-B, rather than as a challenge to the finding of public exigency.
[¶ 27] The Portland Company's second challenge to the finding of public exigency relates to parcel A-1. The Portland Company argues that the City presented no evidence that it would not be safe to have railroad tracks cross the Hancock Street Extension, and the City did not perform any analysis as to whether there would be safety issues associated with a track crossing over that street. We reject this argument because it relates to the sufficiency of the evidence to support the finding of public exigency; it does not involve an allegation of abuse of the process by which the finding of public exigency was made. We do not review public exigency findings for sufficiency of the evidence. See Dyer, 2008 ME 106, ¶ 19, 951 A.2d at 826-27.
[¶ 28] The Portland Company's third challenge to the finding of public exigency relates to parcel A-3. The Portland Company argues that there is no public exigency with respect to that parcel because the City has no specific project planned for it, and because the City admitted that parcel A-3 would continue to be used for surface parking. We reject these arguments because they do not amount to an allegation of abuse, and therefore the Portland Company is not entitled to judicial review of the finding of public exigency with respect to parcel A-3. See id.
[¶ 29] We turn next to the Portland Company's challenge to the finding that all three parcels were taken for a public use. We review de novo the determination whether the use for which a taking is authorized is public or private, and we review for clear error the factual findings on which the determination is based. Blanchard v. Dep't of Transp., 2002 ME 96, ¶ 26, 798 A.2d 1119, 1126. "As a general rule, property is devoted to a public use only when the general public, or some portion of it (as opposed to particular individuals), in its organized capacity and upon occasion to do so, has a right to demand and share in the use." Id., 2002 ME 96, ¶ 29, 798 A.2d at 1126. To pass constitutional muster, the use for which the property is taken must at the time of the taking be a public use, "not only in a theoretical aspect, but rather in actuality, practicality and effectiveness, under circumstances required by public exigency." Brown v. Warchalowski, 471 A.2d 1026, 1029-30 (Me.1984). The public must have the right to use the property without relying on the "grace of any private party." Blanchard, 2002 ME 96, ¶ 29, 798 A.2d at 1126.
[¶ 30] The Portland Company's track rights were taken so that they could be extinguished in furtherance of a single, integrated plan for the development of transportation infrastructure and economic development near the Ocean Gateway Marine Passenger Terminal. Significant portions of the planned development are for public access and use, including a public street, a parking garage, and other public space. Although the dominant purpose of a taking must be for a public use, a taking is not unconstitutional on the sole basis that a private party will also benefit from the taking. See Crommett v. City of Portland, 150 Me. 217, 236, 107 A.2d 841, 852 (1954). We have upheld a taking when *1290 use was not equal for all members of the public. Blanchard, 2002 ME 96, ¶ 33, 798 A.2d at 1127. The Portland Company's interest in all three parcels was taken for a public use, in spite of the benefit to Riverwalk.
D. The Portland Company's Coercion Claim
[¶ 31] The Portland Company argues that the court erred in determining that the Portland Company, through its stipulation with the City, waived its claim that the City engaged in illegal coercion, in violation of 23 M.R.S. § 154-B, as to parcels A-1 and A-2. The Portland Company argues that the stipulation explicitly preserves the company's right to challenge the legality of the taking, and that it may do so pursuant to section 154-B. We review the interpretation of a contract de novo. Cheung v. Wu, 2007 ME 22, ¶ 24, 919 A.2d 619, 624. By entering into the stipulation, the Portland Company agreed to relinquish all rights to "damages or other payment or relief." The Portland Company therefore unambiguously waived its right to seek any relief pursuant to section 154-B with respect to parcels A-1 and A-2.
E. Attorney Fees and Costs
[¶ 32] We review the denial of attorney fees for an abuse of discretion. Wandishin v. Wandishin, 2009 ME 73, ¶ 16, 976 A.2d 949, 953; Ellis v. Ellis, 2008 ME 191, ¶ 26, 962 A.2d 328, 335. The Portland Company argues that it is entitled to attorney fees pursuant to 23 M.R. § S. 154; 23 M.R.S. § 3029; and 42 U.S.C.S. § 1988. It also asserts several non-statutory bases for an award of attorney fees. The court did not abuse its discretion in denying attorney fees. We review the court's determination of the prevailing party, for purposes of determining costs, for clear error. Runnells v. Quinn, 2006 ME 7, ¶ 15, 890 A.2d 713, 717. Because we hold that all three parcels were condemned based on a public exigency and for a public purpose, and the Portland Company is not otherwise entitled to relief, the Portland Company is not the prevailing party and is not entitled to costs.
The entry is:
Judgment entered on September 13, 2007, vacated as to parcel A-3 and remanded for entry of judgment affirming the City's condemnation of parcel A-3. In all other respects, judgment dated September 13, 2007, affirmed. Remaining orders affirmed. Remanded for further action consistent with this opinion.
NOTES
[1] Title 23 M.R.S. § 154-B (2008) states: "In no event shall the [Department of Transportation] either advance the time of condemnation, or defer negotiations or condemnation or take any other action coercive in nature, in order to compel an agreement on the price to be paid for property or property rights." Section 154-B applies to the acquisition of property by municipalities, pursuant to 23 M.R.S. § 3029 (2008).
[2] Title 30-A M.R.S. § 3101 has since been amended. P.L.2005, ch. 642, § 4 (effective Aug. 23, 2006) (codified at 30-A M.R.S. § 3101 (2008)). The City also cited to 30-A M.R.S.A. § 5253 (1996), which was repealed in 2001. P.L.2001, ch. 669, § 2 (effective July 25, 2002) (codified at 30-A M.R.S. §§ 5251-5261 (2008)). The City asserts that the citation to section 5253 was a typographical error, and that the correct citation would have been to 30-A M.R.S. § 5223 (2005). Section 5223 has since been amended. P.L.2007, ch. 413, § 3 (effective Sept. 20, 2007). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537257/ | 979 A.2d 287 (2009)
187 Md. App. 647
Barrington D. HENRY
v.
GATEWAY, INC., et al.
No. 0537 September Term, 2008.
Court of Special Appeals of Maryland.
August 31, 2009.
*288 Barrington D. Henry, Pro Se.
Mary Albrecht Jordan & David Daneman (Bishop, Daneman & Simpson, LLC, on the brief), Baltimore, MD, for Appellee.
Panel: MEREDITH, ZARNOCH, and WILLIAM W. WENNER (Retired, Specially Assigned), JJ.
ZARNOCH, Judge.
The central issue in this case is whether, in the absence of a controlling decision by the U.S. Supreme Court and in the face of divided federal precedent, a Maryland court is bound to apply a contractual choice-of-law clause that has the effect of *289 interpreting federal law in a manner inconsistent with a decision of the Court of Appeals of Maryland. We conclude that it would be contrary to the fundamental policy of this State, as embodied in Article 2 of the Maryland Declaration of Rights[1] and in Pope v. State, 284 Md. 309, 396 A.2d 1054 (1979), for a Maryland court to apply a choice-of-law provision that conflicts with an interpretation of federal law by the State's highest court. For this reason and others set forth below, we must reverse the decision of the Circuit Court for St. Mary's County in this case and remand for further proceedings.
This question arises in litigation of humble origin. Dissatisfied with the Gateway computer he purchased at Best Buy, appellant Barrington D. Henry, pro se, filed suit in December 2007 in the circuit court. Naming appellees Gateway, Inc. and Best Buy Co., Inc. as defendants, Henry's four-count pro se complaint asserted three state law claims: 1) breach of express warranty; 2) breach of implied warranty; 3) violation of the Maryland Consumer Protection law, Md.Code (1975, 2005 Repl. Vol.), Commercial Law Article, §§ 13-101 et seq., and one federal claim, a violation on the Magnuson-Moss Warranty Act (MMWA), 15 U.S.C. § 2301 et seq. Each count sought a judgment of $377.98, which was the computer's purchase price, and $30,000 in consequential damages.
Appellees filed a Motion to Dismiss with Prejudice and to Compel Arbitration, accompanied by exhibits and two affidavits. Among other things, they contended that the One Year Limited Warranty Agreement they said Henry received when he purchased the computer was governed by South Dakota law and required him to arbitrate his dispute. This included his federal MMWA claim, which, they said, was subject to arbitration under the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1 et seq.
Henry opposed the motion and in a response, accompanied by documentary materials and his own affidavit, argued that the MMWA prevailed over the FAA and that he was not compelled to arbitrate his federal claim. He also contended that the arbitration provision in the Limited Warranty was a contract of adhesion, fraudulently induced, unconscionable, and the product of misrepresentation, and that the warranty accompanying the computer he purchased did not contain an arbitration provision. In his opposition, appellant also contended that it would be premature to grant appellee's motion before he obtained discovery.[2] In a supplementary opposition filed on the eve of the motions hearing, Henry asked the court to order discovery.[3]
*290 In their April 2008 response to appellant's opposition, appellees mentioned, for the first time, the Court of Appeals decision in Koons Ford of Baltimore, Inc. v. Lobach, 398 Md. 38, 919 A.2d 722 (2007), which held that the MMWA supersedes the FAA, so that a litigant advancing a federal warranty claim could not be forced to resolve his or her claim through binding arbitration. However, appellees asserted that the Koons Ford case was distinguishable and not controlling.
On April 18, 2008, the circuit court held a hearing on the motion, and appellant appeared to argue his own case and to respond to questions from the court. He did not mention the discovery issue. After argument, the circuit court judge indicated that she was "going to grant the motion to dismiss in light of the arbitration clause." With apparent reference to Henry's claims of fraud, unconscionability, and other challenges to the arbitration agreement, the circuit court judge said: "I don't find your allegations credible in light of the [Gateway] affidavits and the course of conduct that is ... the way of doing business that Gateway has." A week later, the court granted the appellees' motion to compel arbitration and dismissed Henry's claims with prejudice. This appeal followed.
QUESTIONS PRESENTED
In our view, the 11 questions appellant has raised in this appeal[4] can be reduced to two issues:
*291 1) Did the circuit court erred in rejecting appellant's state law defenses to the motion to compel arbitration without affording him a reasonable opportunity to engage in discovery? and
2) Did the circuit court erred in finding that appellant's federal MMWA claim was required to be submitted to arbitration?
We answer "yes" to both questions.
FACTS[5]
In August of 2006, Henry purchased a Gateway computer from Best Buy. Gateway assembles and sells computers under both the Gateway and eMachines names through "resellers" like Best Buy. These computers are sold subject to the terms of a Gateway One Year Limited Warranty Agreement (the "Agreement"), with the computers essentially nonfunctional without accepting the terms of the Agreement. A copy of this Agreement is placed in a conspicuous location inside of the computer's sealed box, so that the customer sees the Agreement when unpacking the box.[6]
The Agreement between appellant and Gateway contained the following provision:
THIS AGREEMENT APPLIES TO YOU UNLESS YOU NOTIFY GATEWAY IN WRITING THAT YOU DO NOT AGREE TO THIS AGREEMENT WITHIN 15 DAYS AFTER YOU RECEIVE THIS AGREEMENT AND YOU RETURN YOUR PRODUCT OR CANCEL SERVICES UNDER EITHER GATEWAY'S OR THE RESELLER'S RETURN POLICY, AS APPLICABLE. THIS AGREEMENT CONTAINS A DISPUTE RESOLUTION CLAUSE. PLEASE SEE SECTION 7 BELOW.
(Emphasis in original).
The Agreement also contained the following "DISPUTE RESOLUTION CLAUSE:"
7. DISPUTE RESOLUTION. You and Gateway agree that any Dispute between You and Gateway will be resolved exclusively and finally by arbitration administered by the National Arbitration Forum (NAF) ... The arbitration shall be held at any reasonable location near your residence by ... whichever method of presentation you choose. If you prevail in the arbitration of any Dispute with Gateway, Gateway will reimburse you for the fees paid to the NAF in connection with the arbitration.... You understand that, in the absence of this provision, you would have had a right to litigate disputes through a court ... and that you have expressly and knowingly waived those rights and agreed to resolve any Disputes through binding *292 arbitration. This arbitration provision shall be governed by the Federal Arbitration Act, 9 U.S.C. Section 1, et seq....
(Emphasis in original.).
Also set forth in bold type in the agreement was the following statement:
THIS AGREEMENT AND ANY SALES THEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF SOUTH DAKOTA, WITHOUT REGARD TO CONFLICTS OF LAWS RULES.
A user purchasing an eMachine computer, who turns on the computer, is confronted with a series of clickable set-up screens that give the user the option of either accepting or rejecting two agreements. One of the required clickable screens contains an End User License Agreement for the Microsoft Windows operating system software and the Gateway One Year Limited Warranty Agreement, both of which must be accepted before the customer can use the computer. If a customer selects the "No, I don't accept" option on the clickable screen, the computer will not operate, and the customer can return the computer for a refund.
On July 26, 2007, appellant contacted Gateway Technical Support for assistance because the computer he purchased was freezing up. The technical support representative spent several hours on the phone with Henry, but was unable to fix the problem. Appellant contacted technical support again on July 29, 2007, but again, after several hours on the phone, the representative was unable to resolve the problem. The representative told appellant that his computer had a defective piece of hardware, and advised appellant to take his computer to Best Buy for additional trouble-shooting and repair. On July 30, 2007, Henry took his computer to Best Buy, where an employee determined that the computer was defective and advised him to contact Gateway. Best Buy also told him that if it completed any repairs, then appellant would have to pay all costs of those repairs and that Best Buy would not replace the product or refund the purchase price.
On August 28, 2007, while at Best Buy, Henry contacted Gateway again. According to appellant, Gateway advised him that the computer was still under warranty. He then requested that Gateway either replace the computer with a comparable product or refund the purchase price. Appellant claimed that Gateway refused to replace the computer or issue him a refund. This lawsuit followed. Additional facts will be discussed below.
DISCUSSION
1. Preliminary Matters
Appellees asserted, and the circuit court obviously agreed, that the arbitration requirement was governed by federal law, viz. the FAA. Although the Agreement recited that it was governed by the FAA, it did not (as is commonly the case) state that the transaction involved interstate commerce. See Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 442-43, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006); Koons Ford, supra, 398 Md. at 41, 919 A.2d 722. Nevertheless, in light of the broad reach of the FAA, which covers arbitration agreements in contracts evidencing a transaction "involving interstate commerce," 9 U.S.C. §§ 1-2; Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56, 123 S.Ct. 2037, 156 L.Ed.2d 46 (2003), and the fact that appellee has not challenged the Agreement on this ground, we conclude that the FAA would apply to this transaction, unless otherwise precluded by federal law.
*293 In addition, appellant has not challenged the circuit court decision on the ground that it did not stay his claims under 9 U.S.C. § 3. Although the issue of whether a court should stay rather than dismiss claims subject to arbitration under the FAA has divided federal courts, see Lloyd v. HOVENSA, LLC, 369 F.3d 263, 268-69 (3rd Cir.2004), there is authority that a dismissal with prejudice is permissible when all of the issues presented in the lawsuit are arbitrable. See Choice Hotels Int'l. Inc. v. BSR Tropicana Resort, Inc., 252 F.3d 707, 709-10 (4th Cir.2001); Green v. Ameritech Corp., 200 F.3d 967, 973 (6th Cir.2000). That appears to be what the circuit court found here. Because appellant does not raise the issue here, we express no view on the question.
2. Invalidity of Arbitration Agreement on State Law Grounds
The FAA provides that written arbitration agreements "shall be validly irrevocable and enforceable, save upon grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Thus, generally available contract defenses, such as fraud, duress, or unconscionability, may be asserted in court to invalidate an arbitration agreement. Shearson/Am. Express Inc. v. McMahon, 482 U.S. 220, 226, 107 S.Ct. 2332, 96 L.Ed.2d 185 (1987). A court may also consider "issues relating to the making and performance of the agreement to arbitrate," Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967).[7] The burden of demonstrating these defenses is on the party opposing arbitration, and these issues are often fact-intensive. See, e.g., Green Tree Fin. Corporation-Alabama v. Randolph, 531 U.S. 79, 92, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000); Rodriguez de Quijas v. Shearson/Am. Express, Inc., 490 U.S. 477, 483-84, 109 S.Ct. 1917, 104 L.Ed.2d 526 (1989).[8]
Here, there was no evidentiary hearing on Henry's defenses and no discovery merely a motion to dismiss and an opposition, both accompanied by affidavits and exhibits. Because the circuit court obviously considered some of those evidentiary materials, see pp. 289-90, 187 Md. App. 651-53, Maryland Rule 2-322(c) was triggered. This rule provides:
If, on a motion to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 2-501, and all parties shall be given *294 reasonable opportunity to present all material made pertinent to such a motion by Rule 2-501.
The requirements of Maryland Rule 3-222(c) were the subject of a recent decision of the Court of Appeals, 120 W. Fayette St., LLLP v. Mayor of Baltimore, 407 Md. 253, 964 A.2d 662 (2009). There, the Court emphasized that when a court considers matters outside of the pleadings, and thus converts a motion to dismiss into a motion for summary judgment, the court must give the plaintiff a reasonable opportunity to present "additional" pertinent material, id. at 263, 964 A.2d 662, and must consider the facts in the light most favorable to the plaintiff, not the moving party. Id. at 264, 964 A.2d 662. Relying on federal authorities interpreting the similar requirement of Rule 12(b) of the Federal Rules of Civil Procedure, the Court said the circuit court judge erred as a matter of law when he considered matters outside the pleadings and failed to provide the plaintiff the opportunity to employ discovery in order to counter facts in the defendant's affidavit or to establish a factual basis for his actions against the defendant. Id.[9]
This is exactly what happened here. Although not labeled a motion to dismiss "for failure to state a claim," the appellees' motion clearly contemplated dismissal on the legal ground that the claims were subject to arbitration. The court expressly relied on appellees' affidavit and exhibits.[10] Yet appellant had no notice that this would transform the appellees' motion to dismiss into one for summary judgment. He may have submitted his own affidavits and exhibits in response to those initially filed by appellees. However, that does not make the requirements of Md. Rule 2-322(c) inapplicable. See Batson v. Powell, 912 F.Supp. 565, 571 (D.D.C.1996)(applying the mandatory conversion requirements of F.R. Civ. Proc. 12(b) when both parties submitted material outside the pleadings.). He did not waive his requests for discovery. Even though he may not have mentioned the issue at the motions hearing, it was preserved in two pretrial filings, including a written motion.[11] Moreover, Rule 2-322(a) imposes a mandatory duty on the circuit court judge, not the parties, to give the litigants a reasonable opportunity to present all materials, including the right to discovery. We conclude that the dictates of Rule 2-322(c) *295 were not followed.[12] Therefore, the dismissal of appellant's state law claims must be reversed, along with the order mandating such claims to arbitration.[13]
3. Arbitrability of the Federal MMWA Claim
The parties have devoted most of their attention on this appeal to appellant's federal claim under the MMWA. Appellant argues that the MMWA supersedes the FAA and thus, he cannot be compelled to arbitrate his federal claim. He finds support in the decision of the Court of Appeals of Maryland in Koons Ford, supra, as well as decisions of two U.S. District courts. See Shannon Karla, Recent Development: Koons Ford of Baltimore, Inc. v. Lobach, 23 Ohio St. J. on Disp. Resol. 421 n. 2 (2008) (collecting cases). Appellees point to decisions of two federal circuit courts, three U.S. district courts, and four state appellate courts holding that the FAA prevails over the MMWA. Id. In addition, they contend that because Henry's agreement with Gateway contains a choice-of-law clause that makes the law of South Dakota controlling, that State would adopt the view taken by a majority of federal courts, rather than Maryland's, and compel appellant to arbitrate his MMWA claim.
At the outset, we assume, without deciding, that when the agreement in question provided that it was to be governed by the "laws" of South Dakota, it intended to include interpretations of federal law by the courts of that state. See the Restatement (Second) of Conflict of Laws, § 187(1) and § 4.[14] The parties have not directed us to any South Dakota case on the issue of whether the MMWA does or does not supersede the FAA, nor to any decision of any federal court within the Eighth federal circuit (which includes *296 South Dakota) that speaks to this question. Moreover, our search has turned up no such case. And obviously there is no Supreme Court decision on the issue.
Appellees, however, rely on a 1994 decision of the Supreme Court of South Dakota, St. Cloud v. Leapley, 521 N.W.2d 118 (S.D.1994), indicating that it is "bound" by decisions of the federal appellate or district courts interpreting federal statutes. Id. at 122-23. In that case, the South Dakota appellate court adhered to a decision of the U.S. District Court for the District of South Dakota on the issue of who was an "Indian" for purposes of federal criminal jurisdiction. Id. Appellees contend that on the basis of St. Cloud, South Dakota's high court would simply do a headcount of the federal courts considering the MMWA/FAA issue and side with the majority.[15] However, in a later decision, State v. Greger, 559 N.W.2d 854, 859, n. 5 (S.D.1997), another case involving jurisdiction over Indians in criminal cases, the South Dakota Supreme Court said: "[W]e do not consider ourselves bound by a decision of the U.S. Court of Appeals for the Eighth Circuit interpreting federal law on the question." The Greger Court pointed to the Supreme Court's decision in ASARCO Inc. v. Kadish, 490 U.S. 605, 620, 109 S.Ct. 2037, 104 L.Ed.2d 696 (1989), for the proposition that state courts can render binding judgments over issues of federal law "that rest on their own interpretations of federal law." 559 N.W.2d at 859, n. 5. St. Cloud was relegated to a "but see" reference after ASARCO.[16]Id.
Maryland caselaw reflects the views of the majority of state courts on this question and echoes Greger. In Pope v. State, 284 Md. 309, 320, 396 A.2d 1054 (1979), the Court of Appeals citing Article 2 of the Maryland Declaration of Rights, said that "unlike decisions of the Supreme Court of the United States, decisions of federal circuit courts of appeals construing the federal constitution and acts of the Congress pursuant thereto, are not binding upon us." See also Degren v. State, 352 Md. 400, 414, n. 8, 722 A.2d 887 (1999); Lone v. Montgomery County, 85 Md.App. 477, 494, 584 A.2d 142 (1991).
Even if Greger and Pope did not appear to be consistent in their view of the impact of federal caselaw,[17] there is an overriding reason why the choice-of-law clause in the Gateway Agreement cannot *297 have the effect of precluding a Maryland court from applying the decision of our State's highest court in Koons Ford. It would be contrary to a "fundamental policy" of this State within the meaning of § 187(2)(b) of the Restatement (Second) of Conflict of Laws, viz., the requirements of Article 2 of the Maryland Declaration of Rights and of Pope v. State, supra, that "the Judges of this State ... shall be bound" by federal law as interpreted by the U.S. Supreme Court or the Maryland Court of Appeals, if there is no Supreme Court decision.[18]
Section 187 of the Restatement (Second) states:
(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.
(2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties choice, or
(b) the application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.
(3) In the absence of a contrary indication of intention, the reference is to the local law of the state of the chosen law.[19]
Embracing the rule set forth in the Restatement (Second), Maryland appellate courts have long recognized the ability of parties to specify in their contracts which state's law will apply. Jackson v. Pasadena Receivables, Inc., 398 Md. 611, 617, *298 921 A.2d 799 (2007). The Court of Appeals has required the existence of a "strong" public policy to override a choice-of-law clause in a contract, id. at 621, 921 A.2d 799, and has not hesitated to apply out-of-state law, even where it would trump an act of the General Assembly. Id. at 627, 921 A.2d 799.
However, it is difficult to think of a stronger or more fundamental public policy than one expressed in the State Constitution. Nor can we conceive of a more forceful statement of the duty of a state court than found in Article 2 of the Declaration of Rights. Unlike the oath for State office contained in Article I, § 9 of the Maryland Constitution, which requires a judge to "support" the laws of the State, Article 2 expressly mandates that "judges of this State" are "bound" by federal law, notwithstanding "anything in the Constitution of Laws of this State to the contrary."[20] Moreover, in the absence of a controlling decision of the U.S. Supreme Court, Maryland courts are to "decide federal questions the way they believe the Supreme Court would decide them," Donald Ziegler, Gazing at the Crystal Ball: Reflections on the Standards State Judges Should Use to Ascertain Federal Law, 40 Wm & Mary L.Rev. 1143, 1177 (1999), not the way some federal courts have. Pope, supra, 284 Md. at 320, 396 A.2d 1054. That is particularly true of a federal question like that presented in Koons Ford, which had divided courts around the country. To adopt appellees' position that a decision of Maryland's highest court on a federal question dissolves because of another state's opposing interpretation of federal law, or because of a headcount of federal appellate or district court decisions on the subject, would require Maryland courts to decide a federal question contrary to the way they believe the Supreme Court would have decided it. This would fly in the face of Article 2 of the Declaration of Rights. Thus, we conclude that embracing a decision of another state or a federal court disagreeing with Koons Ford, would, in the words of § 187(2)(b) of the Restatement (Second), "be contrary to a fundamental policy of [this] State."
There is little doubt that the other prerequisite of § 187(2)(b) is satisfied in this case. Maryland has a materially greater interest in the determination of the MMWA/FAA issue than South Dakota. That state has never decided the issue and its caselaw indicates no clear preference for following federal law in this area. However, because a Maryland court is bound by Article 2 of the Maryland Declaration of Rights to decide the federal law issue the way it believes the U.S. Supreme Court would have decided it, it has a materially greater interest than South Dakota in applying the Koons Ford decision.
In addition, even if we were required to consider the factors specified in § 188(2) of the Restatement to determine whether § 187(2)(b) has been satisfied, see n. 18, supra, they would favor the application of Maryland law (i.e. its interpretation of federal law) here. The place of contracting would be Maryland, since appellant purchased the computer in this State and, according to appellees, accepted the contract terms in Maryland by electronically agreeing to it in the Gateway End User License Agreement. The place of negotiation of the contract, to the extent there was any, was Maryland. The place of performance, in terms of payment of the purchase price and receipt of the computer, was Maryland. The location of the *299 subject matter of the contract, the computer, is in Maryland. And lastly, appellant's domicile is Maryland, as well as his residence. From the record, it appears that Gateway has a technical support center in South Dakota, although neither appellee is incorporated or headquartered there. In addition, Gateway's reseller, Best Buy, has a retail outlet in Maryland and both entities do business here.
For all of these reasons, § 187(2)(b) would dictate that Maryland law applies here and that the Koons Ford case controls the issue of whether appellant's MMWA claim survives arbitration.[21] Because appellant's federal claim cannot be forced to arbitration under the FAA, this case must be reversed and remanded for further proceedings consistent with this opinion.
JUDGMENT OF THE CIRCUIT COURT FOR ST. MARY'S COUNTY REVERSED AND CASE REMANDED FOR PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS TO BE PAID BY APPELLEES.
NOTES
[1] Article 2 provides:
The Constitution of the United States, and the Laws made, or which shall be made, in pursuance thereof, and all Treaties made, or which shall be made, under the authority of the United States, are, and shall be the Supreme Law of the State; and the Judges of this State, and all the People of this State, are, and shall be bound thereby; anything in the constitution or Law of this State to the contrary notwithstanding.
It mirrors the Supremacy Clause of the U.S. Constitution, Article VI, cl. 2.
[2] After challenging the imposition of arbitration fees, appellant said that he "will request [d]iscovery from defendant[s] on their unilateral imposition of arbitration." Later, in this filing, he requested the court "to receive evidence as to the unconsionability of the arbitration provision and the misrepresentation of the [two different] one year warranty agreements."
[3] On page 9, this filing included a "MOTION FOR DISCOVERY" that stated:
Plaintiff has [a] request for discovery in his opposition to defendant[s'] motion to dismiss and to compel arbitration. Plaintiff ask[s] that this court order discovery, if the evidence provided by the plaintiff does not suffice As to the date that this computer was manufacture[d] in 2004[,] [e]ven though facial [sic] it seems ... to be the product of E Machine mass production between January 2004 and July of 2004 prior to Gateway acquisition of E Machine products and was sold to the plaintiff two [2] years later. And [Plaintiff] seek[s] discovery [of] each and [every] document ... as it relates to the production, distribution and sale of [the] computer at issue.
[4] Appellant lists the following issues in his brief:
1. The circuit court erred considering that there exist [sic] an original E machine one year limited agreement that did not contained [sic] an arbitration provision and did not contained [sic] a dispute resolution, delivered at the time of purchase, in the sealed 2004 model original E machine brand computer, packaged and manufactured in 2004, but was shipped to and sold to appellant in 2006.
2. The circuit court erred considering that there is a factual dispute over whether appellant had ever received a copy of Gateway [aka] E Machine subsequent purported arbitration limited one year warranty agreement and the arbitration rules.
3. The circuit court erred by not permitting appellant['s] request for motion for Discovery of the disputes [of] material facts of the two different one year warranty agreement[s], considering that the appellant is entitled to discovery.
4. Is the Gateway [aka] E Machine subsequent purported arbitration agreement enforceable considering that appellant did not have a true notice or knowledge that he had entered a subsequent purported arbitration agreement that includes a binding provision?
5. Is the Gateway [aka] E Machine subsequent purported arbitration agreement enforceable considering the subsequent purported arbitration agreement is procedurally unconscionable and substantively unconscionable?
6. Is the Gateway [aka] E machine subsequent purported arbitration agreement enforceable considering that Gateway [aka] E Machine suppress [sic] material facts of the subsequent purported agreement excessive fees, renders the subsequent purported arbitration agreement substantively unconscionable?
7. The Circuit Court erred considering the C.F.R. 16 Section 700.8 prohibits and stated that ... A warrantor shall not indicate in any written warranty or service contract either directly or indirectly that the decision of the warrantor, service contractor, or any designated third party is final or binding in any dispute concerning the warranty or service contract.... Such [a] statement [is] deceptive since 110(d) of the Act gives state and federal courts jurisdiction over suits for breach of warranty and service contract.
8. The Circuit Court erred considering that the arbitration provision is used to effect the fraudulent scheme and itself is an element of the fraud, considering that Appelle[e] promise is a[sic] illusory and present intention not to perform a promise made, under the written warranty covered by the Magnuson-Moss Warranty Act.
9. Whether the drafting of the Magnuson-Moss Warranty Act was the intent of Congress to prohibit binding arbitration.
10. Whether in evaluating the FTC's implementing regulations, the courts should apply the "unreasonable interpretation" "or arbitrary or capricious."
11. Whether the FTC regulations that prohibit binding arbitration of MMWA claims are unreasonable or "arbitrary" and "capricious"
[5] Some recitation of alleged facts, particularly as to the terms of the arbitration agreement, is necessary to properly address the legal issues in this case. These are distilled from the various exhibits and affidavits submitted by the parties in the circuit court.
[6] In an affidavit, appellant asserted that the sealed computer package he received contained a one year warranty without an arbitration provision.
[7] In Prima Paint, the Supreme Court drew a line between a defense of fraud in the inducement of the contract, which should be considered by the arbitrator, and fraud in the inducement of the arbitration agreement, which may be heard by a court. 388 U.S. at 395, 87 S.Ct. 1801.
[8] In Rodriguez, the Supreme Court said that 9 U.S.C. § 2 allows courts to grant relief when the party opposing arbitration presents a "well-supported" claim of a defense such as fraud or overwhelming economic power. 490 U.S. at 483-87, 109 S.Ct. 1917. In Green Tree, the Court noted:
[W]e believe that where, as here, a party seeks to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive, that party bears the burden of showing the likelihood of incurring such costs. Randolph did not meet that burden. How detailed the showing of prohibitive expense must be before the party seeking arbitration must come forward with contrary evidence is a matter we need not discuss; for in this case neither during discovery nor when the case was presented on the merits was there any timely showing at all on the point.
531 U.S. at 92, 121 S.Ct. 513. (Emphasis added).
[9] Federal cases interpreting F.R. Civ. Proc. Rule 12(b) also indicate that when confronted with a case such as this one, the court must either disregard the submitted matter or give the parties notice that the motion is being converted into one for summary judgment and permit the parties to submit evidence accordingly. See, e.g., Nason v. Am. Canadian Tour, Ltd., 942 F.Supp. 220 (D.Vt.1996).
[10] It is apparent from the record, see pp. 653-54, 979 A.2d pp. 290-91, supra, that the court also made a credibility determination based on the submitted material. See Bagwell v. Peninsula Regional Med. Ctr., 106 Md.App. 470, 488, 665 A.2d 297 (1995)("In resolving a motion for summary judgment, the trial court may not determine the credibility of witnesses... Rather, the court must resolve all disputes of fact, along with all inferences that can be drawn from the evidence and pleadings in the record against the moving party.").
[11] In their brief, appellees state that they never received the motion for discovery that was included in appellant's supplementary opposition to the motion to dismiss and argue that it should not be considered by this Court. However, this filing contained a certificate of service, was accepted by the Clerk of Court, included in the record of this case, and presumably considered by the court. In addition, something more than a mere denial of receipt is necessary to rebut the presumption of service that arises from a certificate of service. Murnan v. Joseph J. Hock, Inc., 274 Md. 528, 531-32, 335 A.2d 104 (1975). Finally, appellant indicated his need for discovery in an earlier filing that apparently was received by appellees.
[12] Perhaps, appellees could have avoided the technical application of Rule 2-322(c) by not joining a motion to dismiss with a motion to compel arbitration. However, even in the latter case, with an evidentiary dispute such as that presented here, the case should not be disposed of summarily without affording the person opposing arbitration limited discovery to challenge the existence or validity of the arbitration agreement.
[13] Our reversal does not prevent appellees from filing a motion for summary judgment raising their challenges to Henry's asserted defenses to the arbitration agreement, or the court from conducting an evidentiary hearing on these issues, after a reasonable opportunity has been afforded to appellant to engage in discovery and to respond to appellees' factual contentions. Of course, appellant's discovery would be limited to (1) whether an arbitration agreement exists, including those generally applicable defenses to the validity of the arbitration agreement, not to the facts underlying his state claims and (2) the facts underlying his federal claim. It may also be desirable for the parties to stipulate that their activities during the discovery and any further proceedings do not waive appellees' right to proceed in arbitration on appellant's state claims. See Brendsel v. Winchester, 162 Md.App. 558, 568, 875 A.2d 789 (2005), aff'd. 392 Md. 601, 898 A.2d 472 (2006).
[14] Section 187(1) of the Restatement (Second) states that, with certain exceptions discussed later in this opinion, "[t]he laws of the State chosen by the parties to govern their contractual rights and duties will be applied..." Section 4 provides that the "law" of the state includes "the state's local law," and Comment b. to § 4 says that "local law" of a state of the United States "includes such rules of federal law as are binding upon it." (Emphasis added). But see Bryon Bolton, Note: Important Terms for Inclusion in Confidential Settlement Agreements for Financial Service Companies, 35 U. Balt. L.Rev. 347, 360 (2006)("Although choices of law and forum generally are considered on a state-by-state basis, if the underlying claims are predicated on federal law, then careful consideration should be given to whether state law will apply under any circumstance."). The issue of when a state is bound by or free to ignore federal decisions interpreting federal law is discussed, infra, at pp. 662-64, 979 A.2d pp. 296-97.
[15] A split decision of the Supreme Court of Illinois in 2004, involving this very issue and Gateway, adopted such an approach. See Borowiec v. Gateway 2000, Inc., 209 Ill.2d 376, 283 Ill.Dec. 669, 808 N.E.2d 957, 970 (2004) ("Because federal circuit court authority on the issue is uniform, we, too, hold that the Magnuson-Moss Warranty Act does not bar arbitration of a consumer's claims under the [FAA].") But see Bowman v. Am. River Transp. Co., 217 Ill.2d 75, 298 Ill.Dec. 56, 838 N.E.2d 949, 958 (2005)("[W]here the Supreme Court has not yet ruled on the question presented ... we are not bound by ... any federal or circuit court rulings on this issue.").
[16] In a comprehensive and informative analysis of state caselaw, a Seton Hall Circuit Review article notes that "there has been an obvious trend in the states toward the view that state courts are not in any way bound or controlled by federal court of appeals (or district court) decisions construing federal law." Colin Wrabley, Applying Federal Court of Appeals' Precedent: Contrasting Approaches to Applying Court of Appeals' Federal Law Holdings and Erie State Law Predictions, 3 Seton Hall Cir. Rev. 1, 18 (2006). Wrabley notes 29 states in this category, including Maryland, and 6 states that consider themselves bound by these federal holdings. Id. at 19. He lists 5 in the "divided" category, including South Dakota. Id. at 21.
[17] "A conflict of law inquiry is necessary only if there are two relevant forums with divergent laws." Accu-Tech Corp. v. Jackson, 352 F.Supp.2d 831, 835, n. 5 (E.D.Mich.2005).
[18] Although appellant has not specifically relied on § 187(2)(b), we believe we must address its application in order to resolve the conflict between appellant's insistence on an interpretation of federal law as embodied in Koons Ford and appellees' contention that foreign law applies in this case.
[19] Section 187(2)(b) incorporates § 188, which provides:
(1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6.
(2) In the absence of an effective choice of law by the parties (see § 187), the contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
(a) the place of contracting,
(b) the place of negotiation of the contract,
(c) the place of performance,
(d) the location of the subject matter of the contract, and
(e) the domicile, residence, nationality, place of incorporation and place of business of the parties.
These contacts are to be evaluated according to their relative importance with respect to the particular issue.
(3) If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied, except as otherwise provided in § § 189-199 and 203.
Maryland's highest Court has yet to adopt § 188 of the Restatement. See Jackson v. Pasadena Receivables, Inc., 398 Md. 611, 619 n. 3, 921 A.2d 799 (2007); and American Motorists Ins. Co. v. ARTRA Group, 338 Md. 560, 570-73, 659 A.2d 1295 (1995).
[20] The word "Laws" in Article 2 would appear to include Maryland caselaw. See Murphy v. Yates, 276 Md. 475, 494, 348 A.2d 837 (1975)(The word "law" in a Maryland constitutional provision governing state's attorneys was construed to include the common law.).
[21] Appellees also contend that the Court of Appeals of Maryland would have decided the Koons Ford case differently if it had considered the impact of 15 U.S.C. § 2311(b)(1) in the MMWA, which provides: "Nothing in this chapter shall invalidate or restrict any right or remedy of any consumer under State law or any other Federal law." They argue that this language expressly preserves a consumer's right under the FAA and state arbitration acts. Aside from the anomaly of businesses invoking the rights of consumers to deny them a judicial remedy in favor of arbitration, we believe § 2311(b)(1) would not have changed the outcome in Koons Ford. Appellees' interpretation of § 2311(b)(1) would run contrary to the "proconsumer" policy of the MMWA and its guarantee that a warranty dispute would be adjudicated in a judicial forum. Koons Ford, supra, 398 Md. at 58, 919 A.2d 722. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537343/ | 27 B.R. 950 (1983)
In re Anthony J. CZEPIGA, Debtor.
Karen S. NASH, Plaintiff,
v.
Anthony J. CZEPIGA, Defendant.
Bankruptcy No. 205-5-82-00646, Adv. No. 205-5-82-0381.
United States Bankruptcy Court, D. Connecticut.
March 8, 1983.
John J. Kennedy, Jr., Donald G. Walsh, P.C., New Haven, Conn., for plaintiff.
John D. Ronshagen, West Haven, Conn., for defendant.
MEMORANDUM AND DECISION
ALAN H.W. SHIFF, Bankruptcy Judge.
In this proceeding, the plaintiff, Karen S. Nash, the former attorney for Mary Czepiga, *951 the defendant's former wife, seeks, inter alia, a determination that a debt owed to her by the defendant is nondischargeable because "said debt is in the nature of alimony, maintenance or support to the defendant's former wife, Mary Pat Czepiga."[1]
I.
On May 11, 1979, the Connecticut Superior Court for the Judicial District of New Haven at New Haven entered a judgment dissolving the marriage between the defendant and Mary Czepiga.[2] In pertinent part, the judgment provided that the custody of their child be committed to Mary Czepiga and that the defendant pay Mary Czepiga $34.00 per week alimony and $34.00 per week for child support. The judgment made no provision for Mary Czepiga's attorney's fee incurred in connection with the dissolution. The alimony payments were eventually reduced to $1.00 per year, and on August 11, 1980, they were terminated.
The defendant instituted custody proceedings during August 1981. On January 1, 1982, pursuant to a stipulated agreement between the defendant and Mary Czepiga, the Connecticut Superior Court ordered that the previous judgment, awarding permanent custody to Mary Czepiga, should be reopened and modified to award permanent custody of the child to the defendant. The court further ordered, pursuant to the agreement between the parties, that the defendant pay Mary Czepiga's "attorney's fee of $1,500.00 within ninety days and that he will pay her $250.00 for costs and expenses within three weeks." Sixteen hundred sixty dollars of that amount remains unpaid. No memorandum of decision accompanied the modification of judgment, and, if any hearing preceded the court ordered modification, the transcript thereof was not offered here.
II.
The plaintiff's principal argument in support of nondischargeability is based on the claim that In re Spong[3] compels the bankruptcy court to look to state law and that the state law, applicable in this proceeding, is consistent with her claim that the award of the attorney's fee was in the nature of alimony, maintenance, or support. More specifically, the plaintiff refers to Conn. Gen.Stat. § 46b-62, Attorney's Fees and § 46b-82, Alimony. Section 46b-62 states in pertinent part "[T]he court [in certain domestic actions] may order either spouse to pay the reasonable attorney's fees of the other in accordance with their respective financial abilities and the criteria set forth in section 46b-82." Section 46b-82, in turn, lists various factors for the superior court to consider in determining whether alimony should be awarded.[4] The plaintiff accordingly contends that "under Connecticut law an award of attorney's fees is clearly in the `nature of alimony, maintenance or support' as the identical standards are employed in awarding them."[5]
III.
The controlling statute in this proceeding is 11 U.S.C. § 523(a)(5), which provides in pertinent part:
(a) A discharge under section 727, 1141, or 1328(b) of this title does not discharge an individual debtor from any debt
*952 (5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree, or property settlement agreement, but not to the extent that
(B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support; (emphasis added)
Courts have generally recognized that "[w]hat constitutes alimony, maintenance, or support, will be determined under the bankruptcy law, not State law." S.Rep. No. 989, 95th Cong., 2d Sess. 79, reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5865. See In re Spong, supra, 661 F.2d at 8-9. In making their determination, bankruptcy courts have examined a number of factors. As stated in In re Petoske:[6]
Although no one factor is controlling, these factors include: the nature of the obligation assumed, its location in the separation agreement, whether a lump sum or terminable periodic payments were provided for, the length of the marriage, whether children resulted which had to be provided for, the relative earning power of the spouses, the adequacy of support absent the debt assumption, and of course, the parties' negotiations and understanding of the provision. (citations omitted)
The ultimate federal question as to what constitutes "alimony, maintenance, and support," however, requires reference to state law. In re Spong, supra at 8-9. In Spong, as here, an issue before the court was whether the debtor's obligation to pay his former spouse's attorney's fee was in the nature of alimony, maintenance and support.[7] The court noted that under New York law, a husband has the duty "to support his wife by providing her with the necessaries of life according to his station." Id. The court then stated: "An award of attorney's fees may be essential to a spouse's ability to sue or defend a matrimonial action and thus a necessary under the law." Id. After examining the nature of the debtor's obligation, the court in Spong concluded that it was within the bankruptcy definition of alimony, maintenance, and support.
The award of an allowance of an attorney's fee is governed in Connecticut by Conn.Gen.Stat. § 46b-62.[8] That section does not provide for alimony but requires the court to weigh the financial condition of the parties and other factors considered in awarding alimony when determining whether an award of an attorney's fee is appropriate. What support the plaintiff here may derive from the relationship between Conn.Gen.Stat. § 46b-62 and 46b-82 is insufficient when set against other factors relevant to the court's analysis.
An award of an attorney's fee frequently, as in Spong, turns upon the financial inability of one of the parties to prosecute or defend a matrimonial action. The financial status of a spouse is also a factor in determining whether alimony should be awarded in state court proceedings. As such, the need for support and the need for financial assistance in prosecuting or defending a matrimonial action are commonly recognized in state court decrees and treated as awards in the nature of alimony, maintenance and support by bankruptcy courts.[9]
Here, however, it cannot be said that Mary Czepiga had a demonstrated need for support. At the time she and the defendant entered into the stipulation regarding the attorney's fee, all alimony payments had already been terminated. Furthermore, Mary Czepiga was earning at least as *953 much as the defendant, and the custody of their only child was by the same modification being committed to him. In addition it should be noted there was little evidence as to the intent of the parties when they entered a stipulation. The defendant, however, testified that he reluctantly agreed to the attorney's fee to assure that he would receive custody of his child.
In view of the foregoing, I find that the plaintiff has not sustained her burden of proving that the award of an attorney's fee was actually in the nature of alimony, maintenance or support. Accordingly, judgment should be, and hereby is, entered in favor of the defendant.
NOTES
[1] Complaint at ¶ 6.
[2] Anthony Czepiga v. Mary Pat Czepiga, Docket No. 164368.
[3] 661 F.2d 6 (2d Cir.1981).
[4] Conn.Gen.Stat. § 46b-82 states in pertinent part:
In determining whether alimony shall be awarded, and the duration and amount of the award, the court shall hear the witnesses, if any, of each party, except as provided in subsection (a) of section 46b-51, shall consider the length of the marriage, the causes for the annulment, dissolution of the marriage or legal separation, the age, health, station, occupation, amount and sources of income, vocational skills, employability, estate and needs of each of the parties and the award, if any, which the court may make pursuant to section 46b-81, and in the case of a parent to whom the custody of minor children has been awarded, the desirability of such parent's securing employment.
[5] Plaintiff's Memorandum of Law at p. 4.
[6] 16 B.R. 412, 413-14 (Bkrtcy.E.D.N.Y.1982).
[7] In Spong, the court also considered whether a debt not payable to the debtor's former spouse could be nondischargeable under 11 U.S.C. § 523(a)(5) and answered the question posed in the affirmative.
[8] It appears that such fees have not traditionally been considered necessaries under Connecticut law. See Cooke v. Newell, 40 Conn. 596, 598 (1874).
[9] See cases cited in In re Spong, supra at 9. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537280/ | 27 B.R. 81 (1983)
In the Matter of Marc Stephen GONZALEZ, Debtor.
Alice B. GONZALEZ, Plaintiff,
v.
Marc Stephen GONZALEZ, Defendant.
Bankruptcy No. 682-00560, Adv. No. 682-0377.
United States Bankruptcy Court, N.D. Ohio.
January 27, 1983.
*82 Robert J. Wachunas, Canton, Ohio, for plaintiff.
Jack A. Blakeslee, Canton, Ohio, for defendant.
JAMES H. WILLIAMS, Bankruptcy Judge.
Defendant in this dischargeability action has moved the court for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, as incorporated by Bankruptcy Rule 712(b). Plaintiff's complaint, as amended, seeks a determination that an obligation imposed upon defendant by the divorce decree of the parties to pay certain debts and save plaintiff harmless on same is excepted from discharge under 11 U.S.C. § 523(a)(5).
In ruling upon defendant's motion for judgment on the pleadings, the well-pleaded factual allegations of the complaint are to be taken as true. See 2 A Moore's Federal Practice para. 1215 (2d ed. 1982). Conclusions of law, however, are not deemed to be admitted. Id.
The facts thus established for purposes of this motion are as follows. On May 4, 1982, a final decree of divorce was entered by the Stark County Court of Common Pleas, containing the following relevant provisions:
(10) * * * It is further ORDERED, ADJUDGED and DECREED that the wife pay, as due, the O'Neil's charges and Three Hundred and no/100 Dollars ($300.00) towards the Visa charges and agrees to save the husband harmless thereupon; and that the husband pay, as due, the remainder of the Visa charges and any deficiency judgment that may be levied against the parties due to the repossession of the 1979 Volvo 264 automobile and agrees to save the wife harmless thereupon.
(11) It is further ORDERED, ADJUDGED and DECREED that neither party shall pay any alimony.
Plaintiff's amended complaint as noted, asks the court to determine that defendant's obligation to save plaintiff harmless upon the Visa account and the deficiency judgment resulting from the sale of the Volvo is in the nature of alimony or maintenance and is therefore nondischargeable in these proceedings.
Defendant advances two arguments in support of his motion. First, it is suggested that the obligation owed to plaintiff is dischargeable because the divorce decree does not specify payment directly to the *83 spouse. Although there is authority in support of defendant's position, this court believes the better view to be that a "hold harmless" agreement can create a nondischargeable obligation if it is found to be a means of providing alimony, maintenance or support, as those terms have been defined pursuant to Section 523(a)(5). See, e.g., In re Stranathan, 15 B.R. 223, 8 B.C.D. 472, 5 C.B.C.2d 640 (D.Neb.1981); In re Miller, 8 B.R. 174, 3 C.B.C.2d 595 (N.D.Ohio 1981); House Report No. 95-595, 95th Cong., 1st Sess. (1977) 364, U.S.Code Cong. & Admin.News 1978, p. 5787.
Secondly, defendant suggests that paragraph 11 of the divorce decree conclusively determines that his obligation to save plaintiff harmless on joint indebtedness is not in the nature of alimony, maintenance or support within the meaning of Section 523(a)(5). While this court weighs the language of a divorce decree as a factor to be considered in making its determination of dischargeability, see, e.g. In re Carmel, Case No. 680-00079, Adversary Case No. 680-0037 (N.D.Ohio, February 17, 1981) (unreported decision), it is recognized that the characterization of a given debt in a divorce decree is not to be accorded conclusive effect by the bankruptcy court. See In re George, 15 B.R. 247, 5 C.B.C.2d 655 (N.D. Ohio 1981); In re Warner, 5 B.R. 434, 6 B.C.D. 788 (D.Utah 1980).
Other factors which the court may consider include the relative economic circumstances of the parties, the nature of the underlying debt, the length of the marriage and the number of children involved. See generally In re Warner, supra; In re Sturgell, 7 B.R. 59 (S.D.Ohio 1980); In re Williams, 3 B.R. 401, 6 B.C.D. 341, 1 C.B.C.2d 1086 (N.D.Ga.1980).
Given the requirement that the court must look beyond the four corners of the divorce decree to other factual considerations in making its determination on the question of dischargeability, plaintiff's assertion that she is entitled to be heard on these additional matters is well taken. Defendant's motion for judgment on the pleadings will therefore be denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537282/ | 27 B.R. 175 (1982)
LINCOLN NATIONAL BANK, Plaintiff,
v.
Thomas D. CONTI, Mary Sonya Conti, Jack F. Pickrel, Trustee, Defendants.
In the Matter of Thomas D. CONTI, Mary Sonya Conti, Debtors.
Bankruptcy No. 3-82-02841, Adv. No. 3-82-0816.
United States Bankruptcy Court, S.D. Ohio, W.D.
January 28, 1982.
Gary E. Susser, Dayton, Ohio, for plaintiff.
Jeffrey P. Albert, Dayton, Ohio, for debtor/defendant.
*176 Jack F. Pickrel, Dayton, Ohio, for trustee/defendant.
DECISION AND ORDER
CHARLES A. ANDERSON, Bankruptcy Judge.
This matter is before the court upon the pleadings and evidence adduced at trial on 10 January 1983.
Defendants/Debtors filed a petition for an order for relief on 8 October 1982. On this date they had possession of a 1978 Dodge Van and the Ohio Certificate of Title upon which there were noted no liens or encumbrances. Jack F. Pickrel, Trustee in Bankruptcy (Trustee), took possession of the vehicle, and still has possession. The Ohio Certificate of Title had been issued on 20 January 1981 in the name of "Thomas and or Mary Conti."
Plaintiff Lincoln National Bank (the Bank) had loaned the funds on or about 21 September 1978 to the Conti's to purchase the vehicle in Indiana; and, an Indiana Certificate of Title was issued to "Thomas and or Mary Conti with Full Rights to Survivorship" on or about 26 September 1978 duly noting the Bank as "first lien holder." This lien was duly released on the title on 15 January 1981. The loan was rewritten on 14 May 1982 at the request of Debtors, but the lien never noted on the Ohio Title. The refinancing note was for $5,004.30 including a "finance charge" of $1,163.49.
The Bank officer testified that release of lien and surrender of the Certificate to the owners is the accepted practice in Indiana to enable a borrower to obtain a new certificate of title in another state, with the understanding that the lien will be noted on the new certificate, which is to be delivered to the lending institution.
Mr. Conti, in the process of moving from Indiana to Ohio, then obtained what he thought was a "transfer" of title to Ohio. He signed under oath a title application form supplied by a title clerk which recited in effect that there was no outstanding lien on said vehicle. He testified he did not read the form, and denied any intention to defeat the secured debt of the Bank. In fact, the Debtors made their regular monthly payments until they decided to file in bankruptcy. Mrs. Conti handled the payment of the family debts, and did not have any thought that the payment need not be paid.
The original Indiana Certificate of Title is on file in the office of the Clerk of Common Pleas Court, Montgomery County, Ohio, bearing the release of lien on January 15, 1981, executed by the Bank, on its face. On the reverse side, the "Assignment of Title" space provided is not filled in or completed in any fashion. Spaces are provided for the "Purchaser's Name" and address, and blank lines provided for the signature of "seller(s)." A box provided on the lower corner of the "assignment Form" is filled in with an unsigned recitation that "Vehicle is Subject To Lien in Favor of" Lincoln National Bank.
The following notice was served upon the Trustee on or about 27 October 1982, to-wit:
UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF OHIO
WESTERN DIVISION
IN RE: * CASE NO. 3-82-02841
THOMAS CONTI
SSN XXX-XX-XXXX *
MARY SONYA CONTI
SSN XXX-XX-XXXX * NOTICE TO TRUSTEE
Debtor
******************************************************************
*177 Now comes Creditor, Lincoln National Bank, by and through counsel, and hereby provides notice to Trustee, pursuant to 11 U.S.C. Section 546(b), that they intend to protect their security interest in the 1978 Dodge van bearing serial number B21BF8X208374 now in the possession of Debtor.
Creditor relies upon Article IX, Section 305 of the Uniform Commercial Code regarding when a secured party may use possession to protect a security interest in certain goods without the necessity of filing a security interest.
Lincoln National Bank hereby gives notice to Trustee that the Trustee is now duty bound to exercise reasonable care in the protection of the collateral. Pursuant to the Debtor's exam of Wednesday, October 27, 1982, the Vehicle in question is being used daily by the Debtor and is uninsured. Pursuant to the Proof of Claim filed by Creditor on this date, the total amount of the debt owed to Creditor on the 1978 Dodge van is $4,674.30
WHEREFORE, Creditor demands that this Trustee immediately seize the 1978 Dodge van or permit the agents of Creditor, Lincoln National Bank, to seize same on this date of filing.
Respectfully submitted,
[signed]
-------------------------------
Gary E. Susser
Counsel for Creditor
SLICER, HALL & SLICER
2040 One First National Plaza
Dayton, Ohio 45402
513/228-4500
CERTIFICATE OF SERVICE
I hereby certify that a true and accurate copy of the foregoing was mailed by United States Mail, postage prepaid, and/or hand delivered to Jeffrey Albert, attorney for Debtor, on this ____ day of October, 1982 and to Jack Pickrel.
[signed]
-------------------------
Gary E. Susser
DECISION
The Bank seeks either to have the motor vehicle surrendered by the Trustee or, in the alternative, that Defendants be denied a discharge for a violation of 11 U.S.C. § 523(a)(2)(A) and a judgment granted for $3,946.12, plus interest and costs.
I
The Bank seeks possession of the vehicle from the Trustee, claiming a security interest. In this regard, it is argued:
"LAW: It is well established that the Trustee's rights and powers are limited by Section 546. If an interest holder against whom the Trustee would have rights still has, under applicable non-bankruptcy law, and as of the date of the petition, the opportunity to perfect his lien, then he may perfect his interest against the Trustee. If applicable law requires seizure for perfection, then perfection is by notice to the Trustee instead. Pursuant to Section 305 of Article IX of the U.C.C., a security interest in goods may be perfected by the secured parties taking possession of the collateral. This method of perfection of a security interest without the necessity of filing inures to the benefit of this Plaintiff who could not take possession of the vehicle once the provisions of the automatic stay were invoked by the Debtors filing the bankruptcy petition. Inasmuch as the Plaintiff/Creditor has perfected his purchase money security interest in the automobile in question, Plaintiff takes priority over the Trustee in Bankruptcy and is entitled to the return of the subject motor vehicle."
No case precedents have been cited for this proposition.
*178 The Trustee counters by urging "the status of an execution creditor with priority over all other unperfected lien interests." He further argues that there is no perfected lien because of the provisions of Ohio Revised Code § 1309.03(A)(4)(a) and (b), and (C)(5). [sic]
11 U.S.C. § 544(a)(1) and (2), a trustee's proverbial "strong arm" lien, very definitely establishes the status of the Trustee herein. The Trustee's avoidance powers are no longer subject to any questions of the application of the doctrine in Moore v. Bay, 284 U.S. 4, 52 S. Ct. 3, 76 L. Ed. 133 (1934) under Section 544. The status being unimpeachable the applicable non-bankruptcy law section of the Ohio Revised Code (U.C.C. 9-103) for determination of the Bank's rights as cited by the Trustee merely bolsters his status under state law, although he has inadvertently referred to the wrong subdivision (which is correctly subdivision (B) rather than (A)). Section 1309.03(B)(2) provides as follows:
(2) Except as otherwise provided in this division, perfection and the effect of perfection or nonperfection of the security interest are governed by law, including the conflict of laws rules, of the jurisdiction issuing the certificate until four months after the goods are removed from that jurisdiction and thereafter until the goods are registered in another jurisdiction, but in any event not beyond surrender of the certificate. After the expiration of that period, the goods are not covered by the certificate of title within the meaning of this section.
The provision of 11 U.S.C. § 546 as cited in behalf of the Bank is not applicable.
Section 546 pertains to both judgment lien creditors and bona fide purchasers whose interests arose pursuant to bankruptcy law. There must be applicable state law establishing a period between the creating of a lien and the time when perfection is permitted under local law, such as found in § 1309.20 Ohio Revised Code (U.C.C. 9-301) as to purchase money security interest perfection within 10 days after the debtor obtains possession of the collateral. See In re Federal's Inc., 553 F.2d 509 (CA 6, 1977) re discussion of whether the 10-day reclamation right constitutes an invalid state statutory lien in bankruptcy. 11 U.S.C. § 545 establishes criteria to establish the priority of certain such statutory liens, and must be read in pari materia with Section 546.
Looking to 11 U.S.C. § 545(2) the Trustee may even avoid the fixing of a statutory lien on property of the debtor to the extent such lien is not perfected or enforceable on the date of the filing of the petition against a bona fide purchaser whether or not such a purchaser exists. Ohio Revised Code Section 1309.20 (U.C.C. 9-301) specifically subordinates unperfected security interest to the lien rights of a trustee in bankruptcy from the date of the filing of a petition.
Assuming the converse, arguendo, that Section 546 could now be applied, on equitable grounds, the rights of judgment lien creditors and bona fide purchasers could not be questioned on the facts which demonstrate that the Bank neglected to rectify its acts of both releasing its lien and of surrendering possession, from January 15, 1981 until October 8, 1982, when the Trustee's rights vested and despite a refinancing note on May 14, 1982. Hence, it was not in truth the automatic stay which interfered with lien perfection, even if the 4-months provision in the Uniform Commercial Code did not apply.
II
The facts instanter as analyzed in connection with the claimed nondischargeability of a debt are not so unequivocal. The Debtors did testify briefly and with utmost candor as to executing the Application for Certificate *179 of Title under oath representing that there were no outstanding liens on the vehicle.
Unfortunately, no defense based upon applicable legal principles has been presented, either at the trial or by posttrial brief in behalf of Debtors. Their Answer to the complaint seems to be in conflict with their brief testimony denying any harmful intent in obtaining an Ohio title free of the Bank's lien. They affirmatively "deny the Plaintiff had any security interest on October 27, 1982 to perfect." They further affirmatively plead "that Plaintiffs are an unsecured creditor" and assert a $2,000.00 exemption in the property under Ohio Revised Code Section 2329.66(A)(2) "as joint owners of the subject vehicle."
Plaintiff argues that the Defendants have violated 11 U.S.C. § 523(a)(2)(B), citing In re Houtman, 568 F.2d 651 (9th Circuit, 1978). This case is in accord with the holding under § 14 of the Bankruptcy Act in Marimura, Arai & Co. v. Taback (1929) 279 U.S. 24, 49 S. Ct. 212, 73 L. Ed. 586, that "reckless indifference to actual facts" is equivalent to an intentional misrepresentation.
The Debtors not only obtained an Ohio title without a notation of lien; but, also, did not return the title to the Bank as the condition under which they obtained possession of the Indiana title with the lien released. Obviously, however, when they signed the sworn application that there was no lien, this was a technically true statement of record.
Before reaching the question of Debtors' intention in not returning the title, nevertheless, another factor intersects. There is no evidence that Plaintiff relied on the failure to return or that any such reliance was reasonable or justifiable under the circumstances. The Defendants did not abscond or secrete the collateral. Then, in May, 1982, they renegotiated a new obligation with the Bank and executed a note and security agreement through the "main office" of the Bank. These facts not only negate any imputed scienter to Defendants, but negate any reasonable reliance by the Bank which prevented it from renewing its lien on the title, as required by both the Indiana and Ohio statutes. The Debtors did not and could not at this juncture deceive them or prevent lien perfection.
III
Concluding that the Trustee's lien and title is superior to any claimed lien by the Bank should not and does not make the property available to the Debtors as exempt from the claims of creditors. Such a conclusion would add insult to injury to the Bank, despite its derelictions and failures in perfecting a security interest before bankruptcy and before the Trustee's lien vested.
The Debtors cannot profit by their own dereliction, even though not intended. It is important to note that they did in good faith execute a promissory note on May 14, 1982, to the Bank and in connection therewith granted a security agreement on the collateral now claimed as exempt. As between the Bank and the Debtors, this agreement precludes any claim of exemption as a contractual lien inter sese.
It must be concluded, therefore, that 11 U.S.C. § 522(c)(2) as to non-liability of exempt property cannot be controlling, even if it had been asserted by Debtors. As to the Debtors, "The bankruptcy discharge will not prevent endorsement of valid liens." H.R.Rep. No. 95-595, 95th Cong., 1st Sess. 361, U.S.Code Cong. & Admin. News 1978, pp. 5787, 6317, 9 Bkr.L.Ed. § 82:17, page 373. For an application of the doctrines of unjust enrichment to deny an exemption claim, see In re Taylor, 8 B.R. 806, 7 B.C.D. 317 (Bkrtcy.D.C.1981). If the Trustee had abandoned the vehicle claimed as exempt as no benefit to the estate, the Bank could have as a matter of equity claimed its lien on the property. It would be incongruous to condone assertion of an *180 exemption as to property in the bankruptcy estate because of Debtors' misdeeds and thereby effect an unjust enrichment to the Debtors merely on the existence of a superior lien by operation of law in the Trustee. The "strong arm" clause in such a situation merely treats the Bank's equitable lien as a junior lien to the Trustee. The discharge in bankruptcy under such circumstances is effective only as to the personal liability of Debtors.
Even though Debtors are not denied a discharge, such does not render them blameless and immune from restitution for property to which they made a claim. Without laboring the equities, it is merely noted that, "Unjust enrichment of a person occurs when he has and retains money or benefits which in justice and equity belong to another." See 66 Am.Jur.2d, Restitution and Implied Contracts, §§ 3, 4-10. The equitable jurisdiction of bankruptcy courts must encompass such principles in allowing statutory exemptions to Debtors. In summary, even though the loan contract is deemed discharged, in equity there would be an implied contract to save the Bank harmless by the Debtors for preventing the prebankruptcy lien perfection. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537301/ | 797 A.2d 260 (2002)
In the Interest of J.H., a minor.
Appeal of J.H., a minor, Appellant.
Superior Court of Pennsylvania.
Argued January 15, 2002.
Filed: April 15, 2002.
*261 Lawrence J. Rosen, Harrisburg, for appellant.
James P. Barker, Asst. Dist. Atty., Harrisburg, for Commonwealth, appellee.
Before STEVENS, TODD, and CAVANAUGH, JJ.
TODD, J.
¶ 1 J.H. appeals the order of the Dauphin County Court of Common Pleas adjudicating him delinquent and placing him on formal probation for an eight-week program at Tressler Weekend Program[1] for making terroristic threats[2] against his drama teacher. We affirm.
¶ 2 The facts of this case may be summarized as follows: During his drama class at Susquehanna High School, J.H. volunteered to read a part in a play script. While reading his part, J.H. began using the word "fuck," even though the word did not appear in the script. J.H.'s drama teacher reprimanded him three to five times for using the word. Despite the reprimands, J.H. continued to "ad lib" in the same manner, at which time the teacher threatened to send J.H. to the principal's office if he used the word one more time. J.H. apologized and agreed to stop using the word. However, J.H. did use the word again and the teacher advised J.H., who was on informal probation with the Dauphin County Juvenile Probation Office, that she was going to address his behavior with Chris Hakel, J.H.'s probation officer. J.H. became angry, and told the teacher that if she spoke with his probation officer, "it would be that last thing [she] ever did." (N.T. Hearing, 11/21/00, at 10.) When the teacher asked J.H. if he was aware that he was threatening her, he responded that he was "promising [her]." (Id.) As a result of the incident, J.H. was charged with making terroristic threats. After a hearing on November 21, 2000, J.H. was adjudicated delinquent.
¶ 3 This Court previously has explained:
In reviewing the sufficiency of the evidence to support the adjudication below, we recognize that the Due Process Clause of the United States Constitution requires proof "beyond a reasonable *262 doubt" at the adjudication stage when a juvenile is charged with an act which would constitute a crime if committed by an adult. Additionally, we recognize that in reviewing the sufficiency of the evidence to support the adjudication of delinquency, just as in reviewing the sufficiency of the evidence to sustain a conviction, though we review the entire record, we must view the evidence in the light most favorable to the Commonwealth.
In re A.D., 771 A.2d 45, 48 (Pa.Super.2001) (en banc) (citations omitted).
¶ 4 Under Section 2706 of the Crimes Code
A person commits the crime of terroristic threats if the person communicates, either directly or indirectly, a threat to:
(1) commit any crime of violence with intent to terrorize another;
(2) cause evacuation of a building, place of assembly or facility of public transportation; or
(3) otherwise cause serious public inconvenience, or cause terror or serious public inconvenience with reckless disregard of the risk of causing such terror or inconvenience.
18 Pa.C.S.A. § 2706. Neither the ability to carry out the threat, nor a belief by the person threatened that the threat will be carried out, is an element of the offense. Commonwealth v. Fenton, 750 A.2d 863 (Pa.Super.2000).
¶ 5 On appeal, J.H. concedes that he threatened to commit a crime of violence against his teacher. However, he argues that his statement was not made with the requisite intent to terrorize because it was spontaneous, made in anger, and was the result of several psycho-social stressors he was experiencing at the time. J.H. correctly notes that Section 2706 "is not meant to penalize `mere spur-of-the-moment threats which result from anger.'" Id. at 865 (citations omitted). However, based on our thorough review of the record in the instant case and the relevant case law, we cannot agree that the threat made by J.H. was a spur-of-the moment threat which resulted from anger, such that it does not fall within the parameters of Section 2706.
¶ 6 As support for his argument that the statement he made to his teacher was not made with an intent to terrorize, J.H. cites the case of Commonwealth v. Kidd, 296 Pa.Super. 393, 442 A.2d 826 (1982), in which the appellant was arrested for public drunkenness and during the process threatened to kill the arresting officers. On appeal, this Court concluded that, in view of the appellant's obvious state of inebriation and agitation, there was insufficient evidence to establish that the appellant intended to place the officers in a state of fear. Id. at 397, 442 A.2d at 827.
¶ 7 Similarly, in Commonwealth v. Anneski, 362 Pa.Super. 580, 525 A.2d 373 (1987), this Court concluded that the jury's finding that the appellant was guilty of making terroristic threats was contrary to the weight of the evidence. In Anneski, there was an ongoing dispute between the appellant and her neighbor regarding the rural roadway the appellant's children were required to use to walk to school. The neighbor had complained that the children impeded her progress when she was driving. Believing that the neighbor's car actually struck a school bag being carried by one of her children one morning, the appellant confronted her neighbor and an argument ensued. The neighbor told the appellant that if the children did not get out of her way, she would run into them again. The appellant replied that if the neighbor ran into her children again, she would get a gun and use it. This Court concluded that while the evidence established *263 an exchange of threats made during a heated argument between neighbors, the circumstances of the exchange suggested that the appellant lacked a settled purpose to terrorize her neighbor. Id. at 586, 525 A.2d at 376.
¶ 8 In the instant case, we recognize, as did the trial court, that J.H. was angry when he threatened his teacher. However, "[b]eing angry does not render a person incapable of forming the intent to terrorize." Fenton, 750 A.2d at 865. Rather, as illustrated by the cases discussed above, this Court must consider the totality of circumstances to determine whether the threat was a result of a heated verbal exchange or confrontation. For example, in the case of In re B.R., 732 A.2d 633 (Pa.Super.1999), this Court affirmed the adjudication of delinquency of a student who told a teacher that he would spray a surveillance camera with black paint, destroy the school's main communication system, and then bring a gun to school. The teacher to whom B.R. made these statements had been assigned to monitor B.R. and two other boys in the school hallway while they were waiting to meet with the school principal. In holding that B.R.'s statement could not be construed as a random, spur-of-the-moment, emotional outburst resulting from anger, we noted:
B.R.'s statements were not the product of any heated verbal exchange or confrontation with his teacher Mr. Hudak. There was no conversation at all between Mr. Hudak and B.R. prior to B.R.'s unprovoked statements. To the contrary, these statements were delivered by B.R. in a deliberate, matter of fact manner only after [he and two other boys] had talked among themselves.
Id. at 638 (emphasis original).
¶ 9 In the instant case, the evidence of record does not support a finding that J.H.'s threat was made in the context of a heated verbal exchange or a heated confrontation. J.H.'s drama teacher testified at his delinquency hearing that at the beginning of class on the day of the incident, J.H. was calm. (N.T. Hearing, 11/21/00, at 6.) Indeed, after being reprimanded several times by his teacher for using profanity, J.H. apologized and promised to stop using profanity. When J.H. continued to use offensive language, his teacher advised him that she would discuss the situation with his probation officer. It was at this point that J.H. told his drama teacher that if she spoke with his probation officer, it would be the last thing she ever did. When his teacher asked J.H. if he was aware that he was threatening her, he replied that he was "promising" her. Prior to the time J.H. threatened his teacher, there was no heated verbal exchange or confrontation between J.H. and his teacher. J.H.'s teacher simply was advising him of the consequences if he continued to use profanity in the classroom.
¶ 10 Finally, as a result of the numerous incidents of violence which have occurred in the school setting over the past several years, this Court recognizes the seriousness of any threat made by a student against a teacher or another student. Indeed, we have acknowledged that in order to facilitate the:
strong public interest in reducing the level of violence within our schools and in the community in general, that it is of paramount importance that our schools must be kept as centers of learning free of fear for personal safety. This concept of safety encompasses the notion of teachers and students being secure and free from the fear of becoming victims of senseless violence.
In re B.R., 732 A.2d at 639. Accordingly, for all of the reasons set forth above, we *264 affirm the November 21, 2000 order of the trial court.
¶ 11 Order affirmed.
NOTES
[1] In addition, J.H. was ordered to participate in the Abraxas Leadership Development Program, to perform community service, continue counseling, and to maintain employment and a C average in school.
[2] 18 Pa.C.S.A. § 2706. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537284/ | 27 B.R. 592 (1983)
In re Joseph Thomas MADDOX and Mary Nell Maddox, Debtors.
SOUTHERN DISCOUNT COMPANY, Defendant-Appellant,
v.
Joseph Thomas MADDOX and Mary Nell Maddox, Plaintiffs-Appellees.
Civ. No. C-82-1535-A.
United States District Court, N.D. Georgia, Atlanta Division.
February 16, 1983.
Pearl Rosenthal, Atlanta, Ga., for debtors.
John E. Tomlinson, Atlanta, Ga., for defendant-appellant.
ORDER
O'KELLEY, District Judge.
This bankruptcy appeal is pending before the court on the merits.
Appellant Southern Discount Company raises two primary issues on appeal. First, *593 the appellant argues that the bankruptcy court erred in permitting the appellees, who are debtors under Chapter 7 of the Bankruptcy Code, to proceed with this action without paying a $60.00 filing fee. Second, appellant argues that the bankruptcy court erred in ruling that appellees could avoid the appellant's lien on appellees' household goods.
The Filing Fee
Appellant argues that the resolution of the Judicial Conference of the United States which allows debtors, other than debtors in possession, to commence adversary proceedings without paying a filing fee, but requires that creditors pay a filing fee, violates appellant's constitutional right to equal protection of the laws.
The court affirms that portion of the bankruptcy court's order which ruled that the debtors could proceed with this action without payment of the $60.00 filing fee. The statute which requires persons filing a complaint in federal court to pay a filing fee provides as follows:
(a) The clerk of each district court shall require the parties instituting any civil action, suit or proceeding in such court, whether by original process, removal or otherwise, to pay a filing fee of $60, . . .
(b) The clerk shall collect from the parties such additional fees only as are prescribed by the Judicial Conference of the United States.
28 U.S.C. § 1914(a), (b). Pursuant to the authority provided in the statute, the Judicial Conference of the United States passed a resolution, effective July 1, 1980, which provides, in pertinent part, as follows:
For filing a Complaint, a fee should be collected in the same amount as the filing fee prescribed in 28 U.S.C. § 1914(a) for instituting any civil action other than a writ of habeas corpus. If the United States . . . or a debtor is the plaintiff, no fee is required. . . . The exemption granted herein to a debtor is not granted to a debtor in possession.
Reports of the Proceedings of the Judicial Conference of the United States held in Washington, D.C. March 5 and 6, 1980 and September 24 and 25, 1980, p. 69. The clerk of the bankruptcy court, under the authority of the statute and the resolution, did not require that appellees pay a filing fee when this action was filed. Appellant did not pay a filing fee because it was the defendant in the adversary proceeding. Appellant argues that requiring creditors, and not debtors, to pay a filing fee "unfairly discriminates against creditors without any justification."
Appellant does not have standing to raise the filing fee issue. Appellant has not shown that it was injured as a result of appellees not paying a filing fee. Appellant was not required to pay a filing fee in this action and has not shown that the filing fees creditors must pay to commence an action are increased because debtors are not required to pay a fee. In order to have standing, a plaintiff "must allege a distinct and palpable injury to himself, even if it is an injury shared by a large class of other possible litigants." Warth v. Seldin, 422 U.S. 490, 501, 95 S. Ct. 2197, 2206, 45 L. Ed. 2d 343 (1975). Not having alleged such an injury, appellant has no standing to assert a defense based on appellees' failure to pay a filing fee.
Even if appellant had standing to raise the filing fee issue, appellant's equal protection claim would fail. Unless a statute employs a classification that is inherently invidious or that impinges on fundamental rights, courts properly exercise only a limited review power over legislative acts. See San Antonio School District v. Rodriguez, 411 U.S. 1, 93 S. Ct. 1278, 36 L. Ed. 2d 16 (1973). At this limited level of review, the Supreme Court "consistently has required that legislation classify the persons it affects in a manner rationally related to legitimate governmental objectives." Schweiker v. Wilson, 450 U.S. 221, 230, 101 S. Ct. 1074, 1080, 67 L. Ed. 2d 186 (1981). The court must employ this limited level of review of the Judicial Conference resolution because appellant has not alleged that the resolution employs an inherently invidious classification or impinges on fundamental rights.
*594 The court agrees with the bankruptcy judge that the classification of debtors by the Judicial Conference as exempt from filing fees for complaints is rationally related to legitimate governmental objectives. The Judicial Conference could rationally have decided that debtors may not be able to incur additional expenses above those required when filing their bankruptcy petitions. The Judicial Conference could also have concluded that requiring debtors to pay additional fees to assert rights relating to the filing of their bankruptcy petition would not be consistent with the "fresh start" objectives of the Bankruptcy Code, 11 U.S.C. §§ 101 et seq.
The Avoidance of Lien on Household Goods
The appellant claims a security interest in certain of the appellees' household goods and furnishings which is greater than the equity value of these items. The appellant appeals from the bankruptcy judge's finding that appellees may avoid this interest under 11 U.S.C. § 522(f).
11 U.S.C. § 522(f) provides in relevant part as follows:
(f) Notwithstanding any waiver of exemptions, the debtor may avoid the fixing of a lien on an interest of the debtor in property to the extent that such a lien impairs an exemption to which the debtor would have been entitled under subsection (b) of this section, if such lien is. . . .
(2) a non possessory, non purchase-money security interest in any
(A) household furnishings, household goods, wearing apparel, [or] appliances, . . . that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor; . . .
The apparent intent of this provision is to allow debtors to avoid security interests in some of the items which are described in subsection (b). This subsection, in part, reads:
. . . an individual debtor may exempt from property of the estate . . .
(1) property that is specified under subsection (d) of this section, unless the State law that is applicable to the debtor [on the date of the filing of the petition] specifically does not so authorize.
Georgia chose to "opt out" of the exemptions provided in 11 U.S.C. § 522(d) by providing that an individual debtor whose domicile is in Georgia "is not authorized to apply or utilize and is hereby prohibited from applying or utilizing the provisions of 11 U.S.C. Section 522(d). . . ." Ga.Code Ann. § 511601 (Harrison Supp.1981). The Georgia statutory scheme did not, however, deprive Georgia debtors of all exemptions which would have been allowed under subsection (d). Georgia law provides an alternative to subsection (d) which tracks that subsection, but changes certain provisions and lowers the dollar amount of some exemptions. See Ga.Code Ann. § 51-1301.1 (Harrison Supp.1981).
The Georgia exemptions provided as an alternative to 11 U.S.C. § 522(d) are available to an individual debtor seeking to avoid security interests through subsections (f) and (b). Subsection (b), which determines which items may be freed of security interests under subsection (f), also provides that "an individual debtor may exempt from property of the estate . . . any property that is exempt under . . . State or local law that is applicable on the date of filing of the petition."
One of the Georgia exemptions provides, in relevant part, as follows:
. . . [A]ny debtor who is a natural person may exempt . . . for purposes of bankruptcy, the following property:
. . . .
(4) The debtor's interest, not to exceed $200 in value in any particular item, in household furnishings, household goods, wearing apparel, [or] appliances . . . that are held primarily for the personal, family, or household use of the debtor or a dependent of the debtor. The exemption of debtor's interest in the items contained in this subsection shall not exceed $3,500 in total value; . . .
*595 Ga.Code Ann. § 51-1301.1(a)(4) (Harrison Supp.1981). Except for the $3,500 limitation, which is not present in federal law, subsection (4) is identical to the corresponding federal provision at 11 U.S.C. § 522(d)(3), including the use of the phrase "debtor's interest."
The appellant argues that the phrase "debtor's interest" in Ga.Code Ann. § 51-1301.1(a)(4) includes only the debtor's equity in the property listed. The appellant argues that appellees have no "interest" in the property because the amount of appellant's lien exceeds the value of the property.
If the court were to adopt the interpretation urged by the appellant, 11 U.S.C. § 522(f)(2)(A) would be a meaningless provision. The Georgia provision upon which the appellee bases his argument is identical in relevant part to the corresponding federal provision in 11 U.S.C. § 522(d)(3). If the phrase "debtor's interest" in 11 U.S.C. § 522(d)(1) means only the debtor's equity, then a debtor could, under the federal scheme, avoid liens on property to the extent the property was free of liens. The result would be equally absurd if the court were to hold that a lien might be avoided unless the lien were greater than the value of the property. In that case the phrase "debtor's interest" would mean the "debtor's equity" if the debtor had no equity but would mean the "debtors legal interest" if the debtor had an equity interest in the property.
Congress evidenced its intent to make subdivision (d)(3) serve as the basis of the lien avoidance provision of 11 U.S.C. § 522(f)(2)(A) by making the two provisions applicable to identical property interests of debtors. The appellee cannot reasonably argue that, by adopting the language of subdivision (d)(3) in Ga.Code Ann. § 51-1301.1(a)(4), the Georgia legislature evidenced its intent to "opt out" of the lien avoidance provisions of subsection (f).
The legislative history of 11 U.S.C. § 522(f) provides ample support for the bankruptcy judge's interpretation of that section.
[T]he bill gives the debtor certain rights not available under current law with respect to exempt property. The debtor may void any judicial lien on exempt property, and any nonpurchase money security interest in certain exempt property such as household goods. The first right allows the debtor to undo the actions of creditors that bring legal action against the debtor shortly before bankruptcy. Bankruptcy exists to provide relief for an overburdened debtor. If a creditor beats the debtor into court, the debtor is nevertheless entitled to his exemptions. The second right will be of more significance for the average consumer debtor. Frequently, creditors lending money to a consumer debtor take a security interest in all of the debtor's belongings, and obtain a waiver by the debtor of his exemptions. In most of these cases, the debtor is unaware of the consequences of the forms he signs. The creditor's experience provides him with a substantial advantage. If the debtor encounters financial difficulty, creditors often use threats of repossession of all of the debtor's household goods as a means of obtaining payment.
In fact, were the creditor to carry through on his threat and foreclose on the property, he would receive little, for household goods have little resale value. They are far more valuable to the creditor in the debtor's hands, for they provide a credible basis for the threat, because the replacement costs of the goods are generally high. Thus, creditors rarely repossess, and debtors, ignorant of the creditors' true intentions, are coerced into payments they simply cannot afford to make.
The exemption provision allows the debtor, after bankruptcy has been filed, and creditor collection techniques have been stayed, to undo the consequences of a contract of adhesion, signed in ignorance, by permitting the invalidation of nonpurchase money security interests in household goods.
*596 H.R.Rep. No. 595, 95 Cong. 1st Sess. 127 (1977), reprinted in 1978 U.S.Code Cong. & Ad.News, pp 5787, 6087-8.
The appellant argues that the phrase "debtor's interest" as it appears in Ga.Code Ann. § 51-1301.1(a)(4) must be interpreted to mean only the debtor's equity because it has such a meaning in other subsections of Section 51-1301.1, citing In re Curry, 18 B.R. 358, 360 (Bkrtcy.N.D.Ga.1982) and In re Adams, 13 B.R. 281 (Bkrtcy.M.D.Ga. 1981). In re Curry does not, however, hold that the term "debtor's interest" means the "debtor's equity." The bankruptcy judge in that case ruled that a lien on the debtor's pickup truck could not be avoided because the truck was not a "tool of the trade" within the meaning of 11 U.S.C. § 522(f). The bankruptcy judge did not address the meaning of the phrase "debtor's interest." The Adams case discusses the meaning of the term "interest" in the context of 11 U.S.C. § 541(a)(1), not in the context of 11 U.S.C. § 522. In fact, the Adams case shows that the term "interest," as used in the Bankruptcy Code, 11 U.S.C. §§ 101 et seq., includes a variety of interests. ("Here, both Bank and Trustee have respective intangible `interests'." 13 B.R. at 282.) 11 U.S.C. § 541(a)(1) specifically refers to "all legal or equitable interests of the debtor in property as of the commencement of the case." This court must reject the appellant's narrow interpretation of the phrase "debtor's interest." The word "interest" is a broad term encompassing many rights of a party, tangible, intangible, legal and equitable, and the court will not redefine the term to reach the result sought by the appellant.
The appellant also argues that this court should find in its favor on the basis of the reasoning in Matter of McManus, 681 F.2d 353 (5th Cir.1982). In that case a Fifth Circuit panel held that 11 U.S.C. § 522(f) would not permit a Louisiana debtor to avoid a chattel mortgage on household goods and furnishings because Louisiana "opted out" of the exemption for such goods and furnishings subject to chattel mortgages. Id. at 357. Matter of McManus is inapposite because Louisiana, unlike Georgia, enacted a specific provision to avoid the effects of subsection 522(f) in addition to "opting out" of 11 U.S.C. § 522(d).
Notwithstanding the provisions of R.S. 13: 3881(2) and (4) to the contrary, a person who has granted a chattel mortgage on his property described in R.S. 13:3881(2) or (4) may not thereafter claim an exemption from the seizure of such mortgaged property for the enforcement of that mortgage.
LSA-R.S. 13:3885 (emphasis added). Even if the Georgia legislature had enacted such a provision this court might have chosen not to follow the McManus case. Judge Dyer, an Eleventh Circuit Judge sitting on the McManus panel by designation, dissented from the majority opinion. This court finds persuasive Judge Dyer's argument that the federal statute does not permit a state to "opt out" of the lien avoidance provisions of § 522(f). "And under the supremacy clause, United States Constitution, art. VI, cl. 2, any conflict between the state lien conservation provision and the federal lien avoidance provision must be constitutionally resolved in favor of federal law." Id. at 358.
Accordingly, the order of the bankruptcy court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1734514/ | 601 F. Supp. 1043 (1985)
Anthony TORRES, Plaintiff,
v.
Beverly GRUNKMEYER, and Russ Donley, in their official and individual capacities Defendants.
No. C84-0046-B.
United States District Court, D. Wyoming.
February 1, 1985.
*1044 Stephen L. Pevar, American Civil Liberties Union, Denver, Colo., Richard Wolf, Cheyenne, Wyo., for plaintiff.
John R. Hursh and Holly Brown, Central Wyoming Law Associates, P.C., Riverton, Wyo., for defendants.
ORDER ON MOTIONS
BRIMMER, Chief Judge.
The above-entitled matter came before the Court pursuant to several motions made by both parties to this case. Defendants, at the close of plaintiff's case, moved for a directed verdict, dismissing the plaintiff's cause of action upon the grounds:
(1) that there was no evidence of wilful and wanton misconduct to justify plaintiff's claim for punitive damages;
(2) that there was no evidence before the Court that the plaintiff suffered any injury;
(3) that the defendants at all times were acting in their official capacity and therefore have absolute legislative immunity; and
(4) that this is an action against the State of Wyoming, which is prohibited by the Eleventh Amendment, and that the State of Wyoming is an indispensable party thereto.
At the end of defendants' case, plaintiff moved for a directed verdict on the issue of qualified immunity, and the question of whether or not political affiliation was actually considered by the defendants.
The Court orally granted the defendants' motion with respect to the claims for punitive damages, reserved ruling upon the motion to dismiss on the grounds of insufficient evidence, denied the motions based on absolute immunity and the Eleventh Amendment and reserved ruling on plaintiff's motions. The Court, having now reviewed the pleadings and the evidence offered, and being fully advised in the premises, FINDS and ORDERS as follows:
The main factual issue in question in this matter is quite straightforward. The jury must decide whether defendants considered plaintiff's political affiliation, or lack thereof, in deciding not to hire him as a janitor for the Wyoming House of Representatives. Defendants contend that they are entitled to a directed verdict on this issue because plaintiff failed to produce sufficient evidence. The Court disagrees. Plaintiff testified that defendants led him to believe that if he failed to register as a Republican, he would not be hired, and that when he got angry and refused, defendants decided not to hire him. Defendants claim that plaintiff's political affiliation was not considered but rather that he was not hired because of his belligerent attitude. This is clearly an issue of fact for the jury, and a directed verdict on this matter would be inappropriate. For the same reasons, plaintiff's motion for a directed verdict on this question of fact was also denied.
Defendants further assert that the State of Wyoming is the true party in *1045 interest in this matter, and therefore that the case is barred by the Eleventh Amendment. Per Order of this Court, dated April 17, 1984, a motion to dismiss based on these grounds was denied. The Court stands by this Order in denying further motions based on the Eleventh Amendment, but would add one further comment. The State of Wyoming was not sued, and the Attorney General of Wyoming did not defend this case. The fact that the Management Council of the Wyoming Legislature has now voted to indemnify defendants, should they be found liable, does not bring the state into this case. The Management Council does not bind the whole Legislature, which can vote against the matter, or even vote for it and then decide otherwise during the next session. Thus, Edelman v. Jordan, 415 U.S. 651, 94 S. Ct. 1347, 39 L. Ed. 2d 662 (1974), is not applicable. The State of Wyoming is not legally bound to pay any judgment in this case, defendants are. Therefore, the Eleventh Amendment is not a factor in this matter.
Defendants also contend that they are entitled to absolute legislative immunity. The Court has serious doubts that defendant Grunkmeyer, as a part-time hiring clerk, would ever be entitled to absolute immunity. See e.g. Eslinger v. Thomas, 476 F.2d 225 (4th Cir.1973). However, since the Court has concluded that neither defendant is entitled to absolute immunity, it is not necessary to decide that issue.
It has long been recognized that legislators are entitled to absolute immunity for any acts conducted within the traditional sphere of legislative activities. See e.g. Tenney v. Brandhove, 341 U.S. 367, 71 S. Ct. 783, 95 L. Ed. 1019 (1951). State legislators are entitled to the same legislative immunity as that enjoyed by their federal counterparts. See Supreme Court of Va. v. Consumers Union, 446 U.S. 719, 732, 100 S. Ct. 1967, 1974, 64 L. Ed. 2d 641 (1980). Thus, in deciding whether an activity is within the sphere of legislative activity, it is necessary to look to the guidelines promulgated by the United States Supreme Court. Before proceeding to the legal issue, however, it is necessary to discuss the factual allegations. Plaintiff alleges that defendant Grunkemeyer, upon orders from defendant Donley, Speaker of the Wyoming House of Representatives, refused to hire him as a janitor because he was not a member of the majority party. We are not faced here with a House Resolution favoring the hiring of Republicans; rather, the Speaker adopted a policy of patronage hiring based on the customs and traditions of Wyoming politics. Since the current Speaker has changed this policy, it seems clear that the patronage orders came not from the Wyoming House, but rather from defendant Donley himself.
Assuming, arguendo, that plaintiff's version of the facts is correct, the question arises whether, despite a claim of constitutional violation, defendants are nevertheless immune from liability for a possible violation of plaintiff's rights as defined in Elrod v. Burns, 427 U.S. 347, 96 S. Ct. 2673, 49 L. Ed. 2d 547 (1976); and Branti v. Finkel, 445 U.S. 507, 100 S. Ct. 1287, 63 L. Ed. 2d 574 (1980). The concept of legislative immunity arises from Article I, Section 6 of the United States Constitution, which, in discussing the privileges of Senators and Representatives, states:
and for any Speech or Debate in either House, they shall not be questioned in any other Place.
The Supreme Court has construed the Speech and Debate Clause to protect conduct such as committee proceedings and investigations, and extended coverage to Congressional aides, "(b)ut the Clause has not been extended beyond the legislative sphere." Gravel v. United States, 408 U.S. 606, 624, 92 S. Ct. 2614, 2626, 33 L. Ed. 2d 583 (1972).
As the Supreme Court made clear in Gravel:
Legislative acts are not all-encompassing. The heart of the Clause is speech or debate in either House. Insofar as the Clause is construed to reach other matters, they must be an integral part of the deliberative and communicative processes by which Members participate in *1046 committee and House proceedings with respect to the consideration and passage or rejection of proposed legislation or with respect to other matters which the Constitution places within the jurisdiction of either House. Id. at 625 [92 S.Ct. at 2627].
The Court is hard-pressed to believe that the hiring of janitors fits within this definition of legislative activity. Hiring and firing is a purely administrative, not legislative function. We agree with the Court in Bush v. Orleans Parish School Board, 188 F. Supp. 916, 922 (E.D.La.1960), aff'd per curiam, 365 U.S. 569, 81 S. Ct. 754, 5 L. Ed. 2d 806 (1961), that when a legislator "seeks to act as executor of (his) own laws, then, quite obviously, (he) is no longer legislating and is no more immune from process than the administrative officials (he) supersedes." Defendant Donley, with the assistance of defendant Grunkemeyer, is accused of attempting to execute a patronage policy. If this accusation is valid, then defendants are not entitled to absolute immunity for performing this administrative function.
Furthermore, to grant absolute immunity for the exercising of such administrative functions, would extend the protection of the Speech and Debate Clause into an area already foreclosed by the Court in such cases as Kilbourn v. Thompson, 103 U.S. (13 Otto) 168, 26 L. Ed. 377 (1880); Dombrowski v. Eastland, 387 U.S. 82, 87 S. Ct. 1425, 18 L. Ed. 2d 577 (1967); and Powell v. McCormack, 395 U.S. 486, 89 S. Ct. 1944, 23 L. Ed. 2d 491 (1969). In these cases the Court held that the fact that the Congress had authorized unconstitutional acts, afforded no protection for those who had carried out the acts. As the Court stated in Gravel, "(u)nlawful conduct of this kind the Speech or Debate Clause simply did not immunize." 408 U.S. at 620, 92 S.Ct. at 2624. Thus, if defendants Donley and Grunkemeyer executed an unconstitutional patronage program, they are not entitled to immunity for that execution. Such acts are not essential to the legislative process, and therefore not protected by legislative immunity. Gravel at 621, 92 S.Ct. at 2625. The Court would further note that if such actions were entitled to legislative immunity, legislators and their staffs would be free to violate clearly established rights and privileges with impunity, something the Speech and Debate Clause was never meant to authorize.
Defendants also contend that as public officials they are entitled to a qualified, good faith immunity. A public official who acts in good faith is only liable for violating a party's civil rights "if he knew or reasonably should have known that the action he took within his sphere of official responsibility would violate the constitutional rights of the [plaintiff]." Wood v. Strickland, 420 U.S. 308, 322, 95 S. Ct. 992, 1000, 43 L. Ed. 2d 214 (1975). Defendants allege that they had not heard of the Supreme Court decisions which declared many forms of patronage unconstitutional, and instead were only aware that patronage is an old, established custom in Wyoming. Thus, defendants contend that since they did not realize that patronage was unconstitutional, and further since they relied in good faith on Wyoming policies and customs, that they are entitled to good faith immunity.
The Court declines to give such broad instruction to the jury. In Elrod v. Burns, 427 U.S. 347, 359, 96 S. Ct. 2673, 2682, 49 L. Ed. 2d 547 (1976), the Supreme Court said that "(p)atronage practice falls squarely within the prohibitions of Keyishian and Perry." Four years later in Branti v. Finkel, 445 U.S. 507, 520, 100 S. Ct. 1287, 1295, 63 L. Ed. 2d 574 (1980), the Supreme Court cited with favor the language of the district court, which raised the "propriety of political considerations entering into the selection (process)", and set down the following test:
(T)he question is whether the hiring authority can demonstrate that party affiliation is an appropriate requirement for the effective performance of the public office involved. Id. at 518, [100 S.Ct. at 1294] (emphasis added).
*1047 Thus, unless defendants can prove that they were honestly convinced that party affiliation is an appropriate qualification for janitor, they should have known that questioning applicants for janitor about party registration would violate the constitutional rights of the applicants. Although defendants claim they had never heard of Elrod and Branti, absent extraordinary circumstances, this is no excuse. As the Supreme Court said in Harlow v. Fitzgerald, 457 U.S. 800, 818-819, 102 S. Ct. 2727, 2739, 73 L. Ed. 2d 1396 (1982):
If the law was clearly established, the immunity defense ordinarily should fail, since a reasonably competent public official should know the law governing his conduct.
The Court concludes that the law was clear. Hiring or firing of janitors based on party affiliation is a practice clearly within the strictures placed on patronage by the Supreme Court as early as 1976, eight years before plaintiff applied for the job in question.
Plaintiff seeks a directed verdict on the qualified immunity question. The Court denied this motion so the jury can decide whether the facts of the case involved extraordinary circumstances that might excuse defendants' ignorance of the law. Harlow at 819, 102 S.Ct. at 2739. Nevertheless, the Court is convinced that defendants' requested good faith instructions are much too broad, and thus crafted jury instructions 14, 16, and 17 (copies attached to Order), based on a close reading of Elrod, Branti, and Harlow. The Court is convinced that these instructions, and not the ones submitted by the parties, contain a correct statement of the law of qualified immunity. Only if defendants meet these standards can they sustain a good faith defense.
Therefore, for the reasons set forth above, it is
ORDERED that defendants' motions to dismiss or for a directed verdict, and requests for specific jury instructions be, and the same hereby are, denied. It is further
ORDERED that plaintiff's motions for a directed verdict be, and the same hereby are, denied.
JURY INSTRUCTION NO. 14
You are instructed that under the federal laws in existence at the time of the events that are the subject matter of this action, the First Amendment to the United States Constitution prohibited, and still prohibits, the consideration of the political affiliation of an applicant for public employment, unless the job applied for is one for which party affiliation is an appropriate requirement for the effective performance of that job. Such federal, Constitutional, laws are the supreme law of the land, and of course, supersede any inconsistent state laws, statutes or policies.
In deciding whether the job of janitor is such a position, you may consider whether it is a policy-making position. A policy-making position is one in which the employee's responsibilities are not well defined, and have a broad scope. In determining whether a position involved policy-making, you should consider whether the employee acts as an adviser or formulates plans for the implementation of broad goals.
If you find that defendants did consider plaintiff's party affiliation, or the lack thereof, then you must decide whether defendants, by a preponderance of the evidence, have demonstrated that party affiliation is an appropriate requirement for the effective performance of a janitor for the Wyoming House of Representatives.
JURY INSTRUCTION NO. 16
Everyone is required to know what the law is and to act according to the law. Thus, a reasonably competent public official is presumed to know the law governing his or her conduct. If someone engages in an activity which violates the law, that person is responsible for his actions whether he intended to violate the law or not.
In order to find in favor of the plaintiff in the case, it is not necessary to find that the defendants had the specific intent to violate his constitutional rights.
*1048 JURY INSTRUCTION NO. 17
Ordinarily, if an official reasonably believed that he or she was acting within the law, and acted in good faith on the basis of this belief, then his or her reasonable belief and good faith action would constitute a defense to a claim for a civil rights violation.
If such an official claiming to have so acted, claims extraordinary circumstances, and further can prove, by a preponderance of the evidence, that because of these extraordinary circumstances he or she neither knew, nor should have known, the relevant Constitutional standard, only then may you sustain such a good faith defense.
You are further instructed that the Court is not aware of any provision in the Wyoming Constitution or in the Wyoming statutes which permits or authorizes the employment of non-policy-making legislative staff members upon a partisan political basis. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2857801/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-90-304-CR
WAYNE SCOTT WALKER,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE COUNTY COURT AT LAW NO. 6 OF TRAVIS COUNTY,
NO. 331,728, HONORABLE JAMES GREGG, JUDGE PRESIDING
Appellant appeals his driving while intoxicated conviction. After the jury found
appellant guilty, the court assessed his punishment at ninety days' confinement in the county jail
and a one thousand dollar fine. The imposition of the sentence was suspended, and appellant was
placed on probation for two years subject to certain conditions. Six hundred dollars of the fine
was probated.
Appellant advances four points of error. First, appellant claims that the trial court
erred in overruling his challenge for cause to a prospective juror. Second, appellant urges that
the trial court erred in allowing the results of an intoxilyzer test to be introduced, over objection,
when the State did not establish "that a reference sample was used as required by 37 Tex. Admins.
[sic] Code section 19.3." Third, appellant contends that the trial court erred in allowing a witness
to testify that the intoxilyzer was in proper working order. Fourth, appellant argues that the trial
court erred by refusing to admit relevant evidence concerning "Intoxilyzer 5000," which was not
used in the instant case. The sufficiency of the evidence is not challenged.
Initially, appellant contends that the trial court erred in denying his challenge for
cause to a prospective juror, Father Heathcote, a Catholic priest. Appellant urges that he has met
all the requirements of Harris v. State, 790 S.W.2d 568 (Tex. Crim. App. 1989), and has thus
preserved error. In Harris, the Court of Criminal Appeals wrote:
Thus, in order to warrant a reversal by this Court for the trial court's
erroneous denial of an appellant's valid challenge for cause it must be demonstrated
that:
1. The voir dire of the individual venire person was recorded and
transcribed.
2. The appellant at trial asserted a clear and specific challenge for cause
clearly articulating the grounds therefor.
3. After the challenge for cause is denied by the trial court, appellant uses
a peremptory challenge on that juror.
4. All peremptory challenges are exhausted.
5. When all peremptory challenges have been exhausted, appellant makes
a request for additional peremptory challenges.
6. Finally, the defendant must assert that an objectionable juror sat on the
case. The appellant should point out to the trial court that he is being forced to try
the case with a juror seated whom he would have exercised a peremptory challenge
had he had one.
Harris, 790 S.W.2d at 581.
Failure to exhaust all peremptory challenges does not meet the fourth requirement
of Harris necessary to preserve error. Harris, 790 S.W.2d at 582. The instant record does not
contain a jury list or a showing of which prospective jurors were peremptorily challenged by the
appellant or the State. A review of the voir dire examination does not establish that appellant's
peremptory challenges were exhausted. In asserting compliance with the fourth requirement of
Harris, appellant in his brief does not direct our attention to any portion of the record supporting
his claim that he exhausted all of his peremptory challenges. Assertions in briefs will not suffice.
The burden is on the appellant to see that a sufficient record is presented to show error requiring
reversal. Tex. R. App. P. Ann. 50(d) (Pamph. 1992).
Moreover, we find that the appellant in urging his challenge for cause to the
prospective juror simply stated: "Okay. Move to strike for cause." This was only a general
challenge or objection which normally does not preserve error for review. It certainly was not
a specific challenge for cause articulating the ground for the challenge so as to meet the second
requirement of Harris. In order to complain on appeal, a defendant must first have challenged
a prospective juror for a specific cause and have the challenge overruled by the trial court. Arnold
v. State, 778 S.W.2d 172, 181 (Tex. App. 1989, no pet.).
Appellant failed to lodge a specific objection that the prospective juror was biased
or prejudiced against him, Tex. Code Crim. Proc. Ann. art. 35.16 (a)(9)(1989), or biased or
prejudiced against any applicable law upon which the defense is entitled to rely, Tex. Code Crim.
Proc. Ann. 35.16(c) (Supp. 1992), either as a matter of law, or to such an extent that the
prospective juror was disqualified. Appellant further did not specifically challenge the prospective
juror on any other basis. (1) Appellant has not preserved error for review. Knox v. State, 744
S.W.2d 53, 61-62 (Tex. Crim. App. 1987), cert. denied, 486 U.S. 106 (1988). Further, error
is not preserved for review when the claim on appeal does not comport with the challenge for
cause at trial. Id. at 62.
Nevertheless, we have examined the trial court's denial of the challenge for cause
in light of the entire voir dire examination of the prospective juror. We do not find that the
prospective juror was biased or prejudiced either as a matter of law or to such an extent that he
was disqualified. Prospective jurors are not subject to challenges for cause, even though they
initially equivocate their responses, if they ultimately state they would follow the court's
instructions and render a verdict according to the evidence. Holland v. State, 761 S.W.2d 307,
318 (Tex. Crim. App. 1988), cert. denied, 489 U.S. 109 (1989); Barber v. State, 737 S.W.2d
824, 829-30 (Tex. Crim. App. 1987), cert. denied, 489 U.S. 1091 (1989). That is what occurred
in the instant case. A trial court has the discretion to find or refuse to find facts such as would
justify a challenge for cause, where the evidence is conflicting. Hammond v. State, 799 S.W.2d
741, 744 (Tex. Crim. App. 1990), cert. denied, ___ U.S. ___, 111 S. Ct. 2912 (1991). Great
deference is accorded the trial court when it exercises its discretion in such matters. Pyles v.
State, 755 S.W.2d 98, 106 (Tex. Crim. App), cert. denied, 488 U.S. 986 (1988); Briddle v. State,
742 S.W.2d 379, 384 n.1 (Tex. Crim. App. 1987). The first point of error is overruled.
In his second point of error, appellant argues that the "trial court erred by allowing
the results of an intoxilyzer test to be introduced and interpreted over objections, because the State
did not establish that a reference sample was used as required by 37 Tex. Adminis. [sic] Code
Section 19.03."
It appears that appellant is urging that the State failed to satisfy the first prong of
the predicate necessary to introduce the results of the intoxilyzer test. Hill v. State, 256 S.W.2d
93 (Tex. Crim. App. 1953), established the necessary predicate for the test results from a
breathalyzer machine:
(1) the use of properly compounded chemicals;
(2) the existence of periodic supervision over the machine and
operation by one who understands the scientific theory of the
machine; and
(3) proof of the result of the test by a witness or witnesses qualified to
translate and interpret such results so as to eliminate hearsay.
Id. at 96.
This predicate was reaffirmed in Harrell v. State, 725 S.W.2d 208, 209 (Tex.
Crim. App. 1986), although Harrell amended the first prong of the predicate for a breath test
performed by the intoxilyzer as opposed to a breathalyzer machine. "The Intoxilyzer does not use
chemicals so the first prong of the predicate is not really applicable and must be modified due to
the nature of the machine." Id. at 209-10. Thus, when an intoxilyzer is utilized, the State no
longer need show that the reference sample's composition was proper; a showing that the
reference sample was properly used satisfies the first prong of the predicate. Id. at 210. The
breathalyzer measures breath alcohol concentration through a chemical compound mixed by the
operator, whereas the intoxilyzer measures breath alcohol concentration through infrared
spectrometry. Martin v. State, 724 S.W.2d 135, 137 (Tex. App. 1987, no pet.).
Two basic requirements must be met to establish the proper use of a reference
sample. First, the results of the intoxilyzer must agree with the reference sample's predicted
value within 0.01 g/210L. Second, the test of the reference sample must immediately precede or
follow the subject's breath test. Tex. Sec'y of State, 11 Tex. Reg. 3800 (1986) (37 Tex. Admin.
Code § 19.03(c)(4) since amended) adopted 11 Tex. Reg. 3243 (proposed rule) (in effect at time
of appellant's arrest and trial), (2) enacted pursuant to Tex. Rev. Civ. Stat. Ann. art. 6701l-5, § 3(b)
(Supp. 1992); Harrell, 725 S.W.2d at 210. The purpose of this showing is to demonstrate that
the intoxilyzer machine is functioning properly at the time of the breath test. Harrell, 725 S.W.2d
at 210.
The evidence established that the reference test came within the statutory
0.01g/210L alcohol concentration of the reference sample. The intoxilyzer operator testified that
the reference test was conducted after the appellant's breath test, and the rules of the Department
of Public Safety were observed. The technical supervisor also testified as to the procedure used
to verify the calibration of the machine and that the procedure used to create the reference sample
had been verified through other means. The State established that the reference sample was
properly used. See Fleming v. State, 774 S.W.2d 751, 754 (Tex. App. 1989, pet. ref'd).
Moreover, when the results of the intoxilyzer test (State's exhibit number six--Intoxilyzer Test Report) were offered into evidence, appellant objected on the basis that there had
been no showing that a proper reference sample had been used so as to make the results admissible
"under the Rules of Criminal Procedure." His complaint on appeal is that the results were
inadmissible under the Texas Administrative Code. The complaint on appeal must comport with
the objection at trial. Sterling v. State, 800 S.W.2d 513, 521 (Tex. Crim. App. 1990), cert.
denied, ___ U.S. ___, 111 S. Ct. 2816 (1991); Rezac v. State, 782 S.W.2d 869, 870 (Tex. Crim.
App. 1990). Appellant's second point of error is overruled.
Appellant's third point of error contends that the "trial court erred in permitting
Technical Supervisor Owen to testify that the intoxilyzer machine was in proper working order."
Ralph Owen, a chemist-toxicologist at the Austin Police Department for over fifteen
years, testified that he was certified by the Texas Department of Public Safety as a technical
supervisor in the Texas Breath Test Program; that he maintained and calibrated the breath test
instruments in Area 19; that he was the technical supervisor of the 4011 ASA intoxilyzer at the
Austin Police Department, serial number 001488, which was used to administer a breath test to
the appellant; and that the particular instrument was certified by the Department of Public Safety.
Owen also testified that he was custodian of the records on the particular intoxilyzer.
Owen testified that he had personally inspected the intoxilyzer on December 18,
1989, the morning after the test had been administered to the appellant on December 17, 1989.
He stated that he had personally inspected the intoxilyzer before and after December 17, 1989,
but not on December 11, 1989. The record reflects:
Q. And based on your examination, do you have any opinion as to the
condition of the instrument at the time the test was run?
A. Yes, sir, I do.
Q. What is that opinion?
A. It is my opinion that this instrument is [sic] functioning properly on that
day.
Q. Do you know of any reason why the instrument would have produced an
inaccurate test on the day in question?
A. I know of none.
(Emphasis supplied).
There was no objection to this testimony. For an issue to be preserved on appeal
there must be a timely objection which specifically states a legal basis. Tex. R. App. P. Ann.
52(a) (Pamph. 1992); Rezac, 782 S.W.2d at 870. Where counsel fails to object to evidence when
it is offered, he must show good reason for his failure, or the matter is waived. Terrell v. State,
801 S.W.2d 544, 546 (Tex. App. 1990, pet. ref'd). If there be any claim that there was an earlier
objection, it must be remembered that no reversible error occurs where the same facts to which
there was an objection are proven by other testimony to which there was no objection. East v.
State, 702 S.W.2d 606, 611 (Tex. Crim. App.), cert. denied, 474 U.S. 1000 (1985); Bratcher v.
State, 771 S.W.2d 175, 180 (Tex. App. 1989, no pet.). An examination of the record shows that
the above quoted testimony is the only time Owen expressed his opinion as to the condition of the
intoxilyzer at the time when the test in question was performed. There is no merit to appellant's
third point of error as expressed and quoted above.
Despite the wording of the point of error, appellant's chief concern seems to be the
admission of Owen's hearsay testimony that the intoxilyzer was inspected on December 11, 1989,
the last time before the test on December 17th, and no malfunction of the intoxilyzer was found
on December 11th. Owen had earlier testified, without objection, to the mere fact of an
inspection on December 11th. Later, it was elicited that Sam Bivoni, "the other" technical
supervisor, had performed the inspection on December 11th. Bivoni did not testify. Appellant
now urges that Owen's testimony was in violation of Tex. R. Crim. Evid. Ann. 702 (Pamph.
1992) because an expert is entitled to testify as to his own opinion but not to another person's
opinion. No objection was made at trial on this basis and no error is preserved. Even if there
had been a timely and specific objection, appellant's contention based on rule 702 is not briefed
in accordance with Tex. R. App. P. Ann. 74(f) (Pamph. 1992).
In this multifarious point of error, appellant urges that the trial court also erred in
admitting into evidence, over objection, Owen's testimony about the inspection of the intoxilyzer
on December 11, 1989. By combining more than one contention in a single point of error, an
appellant risks rejection on the ground that nothing is presented for review. Sterling v. State, 800
S.W.2d 513, 521 (Tex. Crim. App. 1990), cert. denied, ___ U.S. ___, 115 L. Ed. 2d 988 (1991).
This point of error is multifarious and presents nothing for review. Adkins v. State, 764 S.W.2d
782, 785 (Tex. Crim. App. 1988); Macias v. State, 733 S.W.2d 192, 193 n.1 (Tex. Crim. App.
1987), cert. denied, 484 U.S. 1077 (1988).
We do note that appellant attempts to rely on Cole v. State, No. 1179-87 (Tex.
Crim. App., November 14, 1990) (not yet reported), which was decided after the instant trial.
In Cole, the court held that when the DPS chemist who actually performed the chemical analysos
of the substance submitted is absent, the testimony of a supervising chemist (or others) as to the
tests conducted and the results of the tests are inadmissible at trial as an exception to the hearsay
rule under Tex. R. Crim. Evid. Ann. 803(8)(B) (Pamph. 1982), and that the same evidence would
be inadmissible even as a business record exception to the hearsay rule under Tex. R. Crim. Evid.
Ann. 803(6) (Pamph. 1992).
Assuming that appellant's general objections of "hearsay" or "hearsay to this
witness" are sufficient to preserve error, if any, we decline to rule on Cole's applicability to the
instant trial. Rehearing was granted in Cole on July 3, 1991, and Cole is still not final and is not
a part of the jurisprudence of this state. See Yeager v. State, 727 S.W.2d 280, 281 n.1 (Tex.
Crim. App. 1977); see also Brown v. State, 807 S.W.2d 615, 616 (Tex. App. 1991, no pet.).
The Cole holding relies heavily upon United States v. Oates, 560 F.2d 45 (2nd Cir. 1977), which
has been severely criticized by other federal appellate courts and commentators. Several courts
of appeals have declined to apply Cole because it is not final. See e.g., Brown, 807 S.W.2d at
616; Garcia v. State, No. 05-91-00066-CR (Tex. App.--Dallas, May 21, 1992, no pet. h.);
Vasquez v. State, 814 S.W.2d 773, 776 (Tex. App. 1991. pet. ref'd). Most importantly in our
case, the point of error is multifarious and presents nothing for review. Appellant's third point
of error is overruled.
In his fourth point of error, appellant contends that the trial court erred "by not
admitting relevant evidence concerning the Intoxilyzer 5000."
Before trial, the trial court granted the State's motion in limine requesting that
appellant make no reference to the Intoxilyzer 5000, which was not involved in the instant case
and which was not relevant. During trial, appellant elicited from Ralph Owen, a chemist-toxicologist with the Austin Police Department, that the Intoxilyzer 4011 ASA was no longer in
use by the department, but had been replaced "by another instrument." Owen did not identify the
"instrument." Subsequently, appellant made his offer of proof, after the court excluded evidence
relating to the Intoxilyzer 5000.
The offer of proof consisted of questions that appellant would have asked Owen.
First, appellant stated that his main question would be: "If this old machine worked, then why
do you have a new one, that being the Model 5000?" Appellant offered nothing to show what the
answer would have been to this "main question." Thus, appellant failed to preserve for review
any answer to this question. Thompson v. State, 802 S.W.2d 840, 843 (Tex. App. 1989, pet.
ref'd); Tovar v. State, 777 S.W.2d 481, 491 (Tex. App. 1989, pet. ref'd). Appellant did not
show that the Intoxilyzer 5000 was in use or available to local law enforcement personnel at the
time of the test involved, or that it became available later. Moreover, appellant failed to establish
Owen's expertise with the Intoxilyzer 5000.
Appellant, in his offer of proof, did state that he had other questions he would have
asked Owen if permitted. He would have asked if the "Model 5000" had an organic device, a
safeguard, and a breath-saving device which the "old machine" did not have. Appellant would
further have inquired if the breath-saving device would have enabled an independent test and
opinion on the breath sample saved, and would have asked if the "new machine" had a " two
testing and two results, a more scientific testing." Appellant also told the court he would ask:
And Mr. Owen, isn't it correct that the same thing you are testifying saying
that those conditions that doesn't affect, the machine, the results of the machine,
are those not the same safeguards that were implemented in the new model 5000,
that being number one, organic detector?
To each of the questions stated (except the first question), appellant merely
"assumed" or "expected" Owen's answer to each question to be "yes" or "correct." The trial
court refused to permit the questions to be asked of Owen.
It is clear that appellant, by his offer of proof, attempted to show that, at least by
the time of the trial, there was a more state-of-the-art intoxilyzer than the one used in his case,
and to impeach a portion of Owen's testimony. In his brief, appellant now indicates that despite
the questions propounded it was his objective to impeach Officer Averitt's testimony, not Owen's
testimony, that certain conditions did not affect the reliability of the Model 4011 ASA intoxilyzer
that was used. It is obvious, at least in part, that the complaint on appeal does not comport with
the offer of proof or objection at trial. See Sterling, 800 S.W.2d at 521.
As to the balance of the offer of proof, we observe that evidence which is not
relevant is inadmissible. Tex. R. Crim. Evid. Ann. 402 (Pamph. 1992). Rule 402 does make
plain, however, that all relevant evidence is admissible except as otherwise provided by
constitutions, by statutes, or by rules. See Medina v. State, 743 S.W.2d 950, 955 (Tex. App.
1988, pet. ref'd). "'Relevant evidence' means evidence having any tendency to make the
existence of any fact that is of consequence to the determination of the action more probable or
less probable than it would be without the evidence." Tex. R. Crim. Evid. Ann. 401 (Pamph.
1992); Mayes v. State, 816 S.W.2d 79, 84 (Tex. Crim. App. 1991). Thus, Rule 401 requires that
the proffered evidence tend to render a contested material issue more or less probable. Garza v.
State, 715 S.W.2d 642, 644 (Tex. Crim. App. 1986).
Exclusion of evidence does not result in reversible error unless to do so affects a
substantial right of the accused. See Tex. R. Crim. Evid. Ann. 103(a) (Pamph. 1992); Breeding
v. State, 809 S.W.2d 661, 663 (Tex. App. 1991, pet. ref'd). The trial court has wide discretion
in determining the admissibility of evidence. Dorsett v. State, 761 S.W.2d 432, 433 (Tex. App.
1988, pet. ref'd).
Testimony that the Intoxilyzer 5000 has more devices or features than the "old
machine," elicited from a witness without establishing his knowledge or expertise, under the
circumstances given would not be relevant to any material issue in the case. The State further
urges that the exclusion of the offer of proof was proper because the evidence, if relevant, would
have the danger of confusing the issues or misleading the jury. See Tex. R. Crim. Evid. Ann.
403 (Pamph. 1992); Ybarra v. State, 768 S.W.2d 491, 495 (Tex. App. 1989, no pet.). We agree.
We conclude that the trial court did not abuse its discretion, and that no substantial
right of the appellant was affected by the exclusion of the evidence in question. See Tex. R.
Crim. Evid. Ann. 103(a) (Pamph. 1992); Tex. R. App. P. Ann. 81(b)(2) (Pamph. 1992). The
fourth point of error is overruled.
The judgment is affirmed.
John F. Onion, Jr., Justice
[Before Justices Powers, Kidd and Onion*; Justice Powers Not Participating]
Affirmed
Filed: June 24, 1992
[Do Not Publish]
* Before John F. Onion, Jr., Presiding Judge (retired), Court of Criminal Appeals, sitting by
assignment. See Tex. Gov't Code Ann. § 74.003(b) (1988).
1. Challenges for cause not based on any ground mentioned in the statutes are ordinarily
addressed to the sound discretion of the trial court. Moore v. State, 542 S.W.2d 664, 669 (Tex.
Crim. App. 1976).
2. Now see Tex. Sec'y of State, 37 Tex. Admin. Code § 19.03(c)(4) (Supp. 1992). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2459250/ | 439 S.W.2d 776 (1969)
Donald Ray POLSGROVE, Appellant,
v.
COMMONWEALTH of Kentucky, Appellee.
Court of Appeals of Kentucky.
February 7, 1969.
As Modified on Denial of Rehearing May 2, 1969.
*777 Donald Ray Polsgrove, pro se, James H. Polsgrove, Louisville, for appellant.
John B. Breckinridge, Atty. Gen., David Murrell, Asst. Atty. Gen., Frankfort, for appellee.
REED, Judge.
Donald Ray Polsgrove appeals from an order overruling a motion under RCr 11.42 to vacate his conviction of armed robbery for which he was sentenced to life imprisonment.
It appears that Donald Ray Polsgrove and Charles Robbins were tried jointly for armed robbery of a Louisville liquor store and a judgment of conviction was entered as to Polsgrove on May 9, 1966. A transcript of this joint trial was filed in this court on an attempted direct appeal by Polsgrove and we have examined this transcript.
So far as is pertinent to the disposition of this case, it appears that Polsgrove and Robbins were positively identified by the victim of the robbery, Ernest M. Wallshield. Wallshield, the proprietor of the liquor store, testified that Polsgrove handled the pistol and Robbins carried a brief bag in which the money taken from the liquor store was placed. Wallshield also testified that as the two robbers left his store he fired three shots wounding Robbins. It is also undisputed that Robbins was arrested with Polsgrove at Polsgrove's home where a brief bag fitting the description of the one used in the robbery was found. Robbins was in a wounded condition. The prosecution introduced a written statement taken from Robbins after his arrest confessing his own guilt and implicating Polsgrove as the man who handled the gun. We shall later discuss the facts surrounding the introduction of this written statement by the prosecution at the trial of Polsgrove and Robbins.
Polsgrove, at the time of his trial, was represented by employed counsel of his own selection. This same attorney attempted to prosecute a direct appeal from Polsgrove's conviction to this court. We dismissed that *778 appeal by order and without opinion for the reason that the appeal on its face was from a nonappealable order. This attempted appeal was from an order overruling Polsgrove's motion and grounds for new trial. The notice of appeal filed in the circuit court designated the appeal as being from that order and no notice of appeal from the judgment of conviction was filed in the circuit court. After we dismissed this direct appeal, Polsgrove employed a different attorney who filed petition for a rehearing and the matter was again thoroughly considered by this court. The petition for rehearing was overruled and the appeal stood dismissed.
Later, Polsgrove instituted the current action pursuant to RCr 11.42 for postconviction relief. The Commonwealth filed a motion to dismiss and the trial judge, after considering the motion on its face with accompanying affidavits and other evidentiary material, denied Polsgrove the relief sought but permitted him to appeal from this disposition in forma pauperis, and we appointed counsel to represent Polsgrove on his current appeal to this court.
The first ground urged by appellant is that the response of the Commonwealth to his motion for post-conviction relief was insufficient and that the trial court should have taken all of the allegations of the motion as confessed and granted Polsgrove a new trial.
The Commonwealth opposed appellant's motion and moved to dismiss it. RCr 11.42 provides that an answer may be filed to a motion to vacate judgment, but it does not require it. Ramsey v. Commonwealth, Ky., 399 S.W.2d 473. The first ground urged is without merit.
The second ground urged is that our action in dismissing Polsgrove's direct appeal was error. These contentions were thoroughly presented and considered on the petition for a rehearing. We remain convinced that our disposition of the direct appeal was correct. The able counsel whom we appointed to represent Polsgrove urges us to clarify the law in respect to proper procedure in prosecuting an appeal from the circuit court to this court of a conviction of a felony. We believe our cases of Boggs v. Commonwealth, Ky., 424 S.W.2d 806; Sherley v. Commonwealth, Ky., 413 S.W.2d 627, and Patrick v. Commonwealth, Ky., 436 S.W.2d 506 (rendered January 24, 1969), clearly establish the proper procedure to effect direct appeal to this court under the provisions of RCr 12.52, RCr 12.54 and KRS 21.140.
Appellant himself argues that if we were correct in dismissing his direct appeal, then he has been denied adequate representation by counsel.
The difficulty with this contention is that at the trial level Polsgrove was represented by employed counsel of his own choice. This same counsel undertook to prosecute an appeal. Other employed counsel also represented Polsgrove in the attempted direct appeal. Hence, the real question is whether or not the mistake or misunderstanding of Polsgrove's employed counsel can be characterized as such incompetent representation as to deprive appellant of his substantial constitutional right to adequate representation by counsel.
It has been held that where a defendant in a criminal case retained counsel of his own choice to represent him, commission by such counsel of what might retrospectively appear to be errors of judgment in the conduct of the defense at the trial does not constitute a denial of due process chargeable to the state. King v. Commonwealth, Ky., 387 S.W.2d 582.
No real complaint is made of the conduct of Polsgrove's defense by his counsel at the trial. The mistake, or misunderstanding, of Polsgrove's counsel had only the result of denying appellate review.
Appellate review is a matter of grace and not a matter of right; in criminal cases it is not a constitutional right. However, when a statute authorizes a direct *779 appeal as a matter of right, an indigent defendant must be afforded the same opportunity as any other defendant to exercise this right. There is no showing in the instant case of any discrimination against Polsgrove so far as the exercise of this right is concerned. See McIntosh v. Commonwealth, Ky., 368 S.W.2d 331. In the instant case, the circumstances of representation of appellant by his employed counsel on the trial level were not such as to shock the conscience of the court or render the proceedings a farce and a mockery of justice. Cf. Rice v. Davis, Ky., 366 S.W.2d 153. Hence, we hold that the ground urged concerning lack of adequate representation by counsel is without merit.
The next grounds urged for reversal may be grouped together and classified as errors occurring at the trial. Appellant argues that the trial judge should have granted him a separate trial. The right to separate trials was not a common law right or one safeguarded by our Constitution. Smith v. Commonwealth, Ky., 375 S.W.2d 819; Koonze v. Commonwealth, Ky., 378 S.W.2d 804, and Fanelli v. Commonwealth, Ky., 418 S.W.2d 740. The trial court has discretion in ruling upon requests for separate trials. Therefore, since we are here dealing with a matter of discretion and not a substantial constitutional right, any prejudicial error on the trial court's part would render the judgment erroneous but not void. Therefore, the matter cannot be raised or considered in this motion for post-conviction relief under RCr 11.42.
The same problem is presented in appellant's claim that the trial court erred in not declaring a mistrial because of a volunteered statement made by the victim of the robbery. This witness for the prosecution during his testimony on his own volition blurted out a statement that appellant's codefendant, Robbins, had incriminated appellant to the witness in a conversation after the commission of the crime and before the trial. The trial court sustained the objection made to this testimony and at the request of appellant's counsel and the prosecutor admonished the jury in terms satisfactory to appellant, because no objection was ever made to the form of the admonition. Sometime after this occurrence, appellant moved for a mistrial but his motion was overruled. This again impresses us as a matter of possible trial error which could render the judgment erroneous but not void. If, in fact, the trial judge abused his discretion in refusing the mistrial, which we need not decide, we conclude that it is not reviewable in this proceeding.
What we have said concerning the foregoing claims of error applies with like force to the other claims of trial error which appellant concedes can only be considered on direct appeal.
A more serious question is that concerning the admission of the statement of appellant's codefendant. Our examination of the transcript reveals that this statement was introduced without objection by appellant after the Commonwealth agreed to delete his name from it in a manner satisfactory to him.
In Delli Paoli v. United States, 352 U.S. 232, 77 S. Ct. 294, 1 L. Ed. 2d 278, the Supreme Court held that it was constitutionally permissible to introduce the confession of one codefendant in a joint trial provided proper admonition was given that it should not be considered evidence against the other codefendant. It is interesting to note that in Delli Paoli v. United States, supra., the appellant claimed error because his name was not deleted. In the instant case, his name was deleted; therefore, it could well be argued that Polsgrove received more protection than Delli Paoli.
In Bruton v. United States, 391 U.S. 123, 88 S. Ct. 1620, 20 L. Ed. 2d 476 (decided May 29, 1968), the Delli Paoli case was overruled. The law now appears to be that an accused's right of cross examination secured by the confrontation clause of the Sixth Amendment is violated at his joint *780 trial with a codefendant who does not testify by the admission of the codefendant's confession inculpating the accused, notwithstanding jury instructions that the codefendant's confession must be disregarded in determining the accused's guilt or innocence. Bruton was held applicable to the states and to be applied retroactively. Roberts v. Russell, 392 U.S. 293, 88 S. Ct. 1921, 20 L. Ed. 2d 1100. The Supreme Court in Bruton did not attempt to prescribe any particular procedure to be followed so as to avoid the consequences of that case. Delli Paoli was in effect at the time of appellant's trial. However, the procedure adopted in the trial court at appellant's trial went beyond the requirements of Delli Paoli.
The statement of the codefendant now attacked was introduced without objection after deletion of references to appellant in a manner satisfactory to him. A more complete excision might have been desirable in the form of the deletion but none was requested. Appellant was positively identified by the victim of the robbery and the incriminating circumstances of his arrest and the evidence found at the time thereof demonstrate that the statement of his codefendant was not a vitally important part of the prosecution's case.
The application of Bruton was very recently considered by the Supreme Court in Frazier v. Cupp, 394 U.S. ___, 89 S. Ct. 1420, 22 L. Ed. 2d 684 (rendered April 22, 1969). Under the reasoning therein contained, we do not believe that the requirement of Bruton was violated in such fashion as to justify postconviction relief under the totality of the circumstances revealed by the record in this case.
The final ground asserted is that the codefendant, Robbins, has retracted his confession incriminating Polsgrove and undertakes to now say that Polsgrove had nothing to do with the crime and that the purpose of his prior incrimination of Polsgrove was to secure the cooperation and good will of the police.
The rule is that newly discovered evidence is not ground for relief under RCr 11.42. The matter is properly raised by means of a motion under RCr 10.06, but in this event it must be asserted within one year from the date of the original judgment. See Bell v. Commonwealth, Ky., 395 S.W.2d 784. The original judgment herein was entered May 9, 1966. The motion to vacate undertaking to raise this question of newly discovered evidence was filed April 17, 1968. Hence, even if we treated it as a motion under RCr 10.06, it is not timely filed. Further, it appears that if we indulge appellant further and treat it as timely filed, we are still compelled to deem it insufficient because in view of the positive identification made by the eye witness and other circumstantial evidence, including the circumstances of the arrest, we cannot say that the new testimony of recantation by the convicted codefendant with the problem of his credibility present would probably change the result at a new trial. Under these circumstances, this ground for relief must be likewise denied. See Jennings v. Commonwealth, Ky., 380 S.W.2d 284.
From the foregoing, it is our conclusion that the trial court properly overruled this application for post-conviction relief as being insufficient on its face.
The order appealed from is affirmed.
All concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/374359/ | 614 F.2d 1128
67 A.L.R.Fed. 311
L. G. RUDERER, Plaintiff-Appellant,v.Gerald D. FINES, United States Attorney for the SouthernDistrict of Illinois; Griffin B. Bell, United StatesAttorney General and The United States of America; and JohnC. Carver, Assistant United States Attorney for the SouthernDistrict of Illinois, Defendants-Appellees.
Nos. 79-1107 to 79-1109.
United States Court of Appeals,Seventh Circuit.
Submitted Jan. 17, 1980.*Decided Feb. 6, 1980.Rehearing Denied Feb. 21, 1980.
L. G. Ruderer, pro se.
Gerald D. Fines, U. S. Atty., Springfield, Ill., for defendants-appellees.
Before SWYGERT, CUMMINGS and SPRECHER, Circuit Judges.
PER CURIAM.
1
In these consolidated appeals, the appellant, Louis G. Ruderer, challenges the propriety of the district court's summary dismissal of his complaints against Gerald D. Fines, the United States Attorney for the Central (then the Southern) District of Illinois, Griffin B. Bell, the former United States Attorney General, the United States, and John C. Carver, an assistant United States attorney, and the district court's denial of appellant's numerous post-judgment motions.
2
A fair reading of the appellant's complaints, motions, and requests in the record sustains the defendants' contention that the source of this controversy and the appellant's ultimate complaint is his dismissal from federal service in 1965. The appellant, a former civilian employee of the United States Army Aviation Materiel Command at St. Louis, Missouri, was dismissed for
3
knowingly having made irresponsible, false and malicious statements against other employees, supervisors and other officials with the intent to harm and destroy the reputation, authority or official standing of those concerned and for insubordinate attitude and misconduct; thereby bringing discredit upon the Command, the Department of the Army and the Federal Service.
4
Ruderer v. United States, 412 F.2d 1285, 1286, 188 Ct. Cl. 456, 458 (1969), cert. denied, 398 U.S. 914, 90 S. Ct. 1716, 26 L. Ed. 2d 77 (1970). The appellant believing that his discharge was unjustified and unlawful commenced a plethora of lawsuits against fellow employees, see Ruderer v. Brown, 279 F. Supp. 707 (E.D.Mo.1967), aff'd sub. nom. Ruderer v. Meyer, 413 F.2d 175 (8th Cir.), cert. denied, 396 U.S. 936, 90 S. Ct. 280, 24 L. Ed. 2d 235 (1969) (defamation action against nine individuals dismissed); Ruderer v. Gerken, 284 F. Supp. 449 (E.D.Mo.1968) (same against four individuals), and various officials of the federal government, including former President Johnson, the former Chairman of the Civil Service Commission, John Macy, Cyrus Vance, and several federal judges, and the United States and various agencies thereof. See generally Ruderer v. United States, 412 U.S. 916, 93 S. Ct. 2728, 37 L. Ed. 2d 143 (1973); Ruderer v. Johnson, 412 U.S. 936, 93 S. Ct. 2766, 37 L. Ed. 2d 395 (1973); Ruderer v. Sessions, 412 U.S. 945, 93 S. Ct. 2780, 37 L. Ed. 2d 406 (1973); Ruderer v. United States Army Aviation Material Command, 411 U.S. 928, 93 S. Ct. 1912, 36 L. Ed. 2d 388 (1973); Ruderer v. United States, 412 U.S. 945, 93 S. Ct. 2781, 37 L. Ed. 2d 406 (1973); Ruderer v. Vance, 412 U.S. 945, 93 S. Ct. 2781, 37 L. Ed. 2d 406 (1973); Ruderer v. Kleindienst, 412 U.S. 964, 93 S. Ct. 3015, 37 L. Ed. 2d 1013 (1973); Ruderer v. Wood, 419 U.S. 1099, 95 S. Ct. 768, 42 L. Ed. 2d 795 (1975). In all, the defendants estimate that the plaintiff has initiated sixty-eight lawsuits, virtually all of which have been dismissed.
5
In an effort to stem a tidal wave of frivolous, vexatious and bad faith litigation initiated by the appellant, six federal courts have issued injunctions against him. See Ruderer v. Department of Justice, 389 F. Supp. 549 (S.D.N.Y.1974) (issuing injunction and noting the entry of similar injunctions in the federal district courts for the Eastern District of Missouri, the Eastern District of Illinois, the Western District of Texas, the Southern District of Illinois, and the District of Columbia). The Eighth Circuit, affirming the issuance of the injunction by the district court for the Eastern District of Missouri, sustained the district court's finding that the appellant's suit was filed "in bad faith and in furtherance of a personal vendetta against the United States." The appeals court then noted that, "Appellant has had his day in court; in this day of burgeoning court calendars, he must be restrained if others are to have theirs." Ruderer v. United States, 462 F.2d 897, 899 (8th Cir.) (per curiam ), appeal dismissed and cert. denied, 409 U.S. 1031, 93 S. Ct. 540, 34 L. Ed. 2d 482 (1972).
6
The appellant has not confined his litigation to the United States district courts and, consequently, other courts have found it necessary to devise means to control his litigiousness. Although the Court of Claims ruled against him on the merits of his challenge of his dismissal from federal service, Ruderer v. United States, 412 F.2d 1285, 188 Ct. Cl. 456 (1969), cert. denied, 398 U.S. 914, 90 S. Ct. 1716, 26 L. Ed. 2d 77 (1970), he has continued to seek redress unsuccessfully to be sure in that court. See Louis G. Ruderer, 208 Ct. Cl. 1019 (1976) (actions prosecuted under five docket numbers held barred by res judicata; plaintiff's motions for summary judgment, to restrain operation of Acts of Congress in repugnance to the Constitution, to amend order, for declaratory judgment, and for immediate adjudication also denied); Louis G. Ruderer, 210 Ct. Cl. 693 (1976) (actions or petitions filed under seven docket numbers dismissed with prejudice as frivolous). In its first order, the Court of Claims after dismissing Ruderer's actions held that "(t)he defendant is not obligated to respond to plaintiff's interrogatories and, hence forward, defendant is not required to respond to any paper filed by plaintiff in these cases unless specifically ordered to do so by the court." 208 Ct. Cl. at 1021. In its second order, the court decided that more expansive relief for the defendant was necessary. The court noted Ruderer's practice of "filing frivolous petitions in this court." It concluded that the real object of the "flood of new cases" was harassment, and therefore entered the following order:
7
1. The petitions in the above numbered cases are dismissed with prejudice as frivolous.
8
2. All motions by plaintiff in the above numbered or any other cases in this court, up to the date of this order, are denied.
9
3. All motions by defendant in the above numbered cases are denied as moot in view of this order.
10
4. Defendant is directed to make henceforward no response to any paper filed by Mr. Ruderer, under any docket number or caption, the above or any other, unless it is specifically ordered to do so by the court. Defendant is assured it will not be defaulted in any such case. If we desire defendant to answer or make any dispositive motion, we will so advise it, otherwise the prescribed times for any such answers or motions are to be deemed indefinitely suspended.
11
210 Ct.Cl. at 694.
12
The appellant, however, still remains uncontent with his days, weeks, and months in court. In 1977, the appellant commenced several lawsuits challenging the validity of the injunctions which had been entered against him by the federal district court for the Southern District of Illinois. The complaints were dismissed by the district court, and this court in an unpublished order affirmed. Ruderer v. United States, Nos. 77-1941 & 77-2009 (May 30, 1978). The affirmance is noted at 577 F.2d 749 (7th Cir. 1978). The Supreme Court denied certiorari. 439 U.S. 893, 99 S. Ct. 250, 58 L. Ed. 2d 238 (1978). In that order this court construed appellant's pro se complaint:
13
as requesting that 28 U.S.C. § 5161 be declared unconstitutional because it allows the U.S. Attorney General to prohibit him from access to the courts to redress his claims stemming from his removal for cause from the Federal Service in 1965. Because section 516 does nothing more than concentrate the authority for the conduct of litigation in the Department of Justice and has no bearing on the underlying facts in this case, this Court assumes that the district court action was dismissed for failure to state a claim.
14
More importantly, however, to the extent that Ruderer's claim is remotely cognizable at law, it is barred by the doctrine of res judicata. Here, Ruderer is apparently attempting to challenge the validity of two injunctions entered against him by this same district court judge on June 24, and June 27, 1974, which prohibited him from bringing any new actions in the Southern District of Illinois against the United States, or any agent thereof which included claims which had previously been asserted in any action previously filed by him in any federal court.
15
The appellant apparently still dissatisfied with this court's disposition of his appeal renewed his efforts in the district court. On June 12, 1978, he initiated an action against defendant Fines. One month later he filed his complaint against defendants Bell and the United States. Finally, on September 21, 1978, he initiated this action against defendant Carver. The complaints were dismissed by the district court on December 5, 1978, precipitating a barrage of post-judgment motions including the appellant's "Notice of an Attack on the Constitutionality of an Act of Congress" and accompanying "Motion for Interlocutory and Permanent Injunction." Plaintiff appeals from the judgment dismissing each of his complaints and the denial of his sundry post-judgment motions. On his own motion the appeals have been consolidated.
16
We have examined with care the record and the appellant's long and generally incomprehensible briefs. We concur in the appellees' contention that the plaintiff's three complaints are frivolous, malicious, filed in bad faith, and totally devoid of any semblance of colorable merit. The complaints were properly dismissed and the district court's judgments are therefore affirmed. The sole issue remaining for our consideration is one that we raise sua sponte : Whether the appellees should be awarded damages and double costs. We believe that they should.
17
Rule 38 of the Federal Rules of Appellate Procedure provides:
18
If a court of appeals shall determine that an appeal is frivolous, it may award just damages and single or double costs to the appellee.
19
See also 28 U.S.C. § 1912. Thus, the appellate court in order to award damages makes two determinations. First, it must determine that the appeal is frivolous. "A frivolous appeal means something more to us than an unsuccessful appeal." N. L. R. B. v. Lucy Ellen Candy Division, 517 F.2d 551, 555 (7th Cir. 1975). Second, the appellate court, in its discretion, must examine whether the appeal is an appropriate one for the imposition of a sanction. "(D)amages are awarded by the court in its discretion in the case of a frivolous appeal as a matter of justice to the appellee and as a penalty against the appellant." Advisory Committee Note to Rule 38, 43 F.R.D. 155 (1968). Typically the courts have looked for some indication of the appellant's bad faith suggesting that the appeal was prosecuted with no reasonable expectation of altering the district court's judgment and for the purpose of delay or harassment or out of sheer obstinacy. See Lucy Ellen Candy, 517 F.2d at 555; Mancuso v. Indiana Harbor Belt R. R., 568 F.2d 553 (7th Cir. 1978) (double costs and damages not less than $350 for preparation of appellate brief); Clarion Corp. v. American Home Products Corp., 494 F.2d 860, 865-66 (7th Cir.), cert. denied, 419 U.S. 870, 95 S. Ct. 128, 42 L. Ed. 2d 303 (1974) ($2,500 and double costs assessed against pro se appellant in favor of each appellee); Acevedo v. Immigration & Naturalization Service, 538 F.2d 918 (2d Cir. 1976) (double costs in favor of government agency); N. L. R. B. v. Smith & Wesson, 424 F.2d 1072 (1st Cir. 1970) (costs plus $500 for expense in defending against frivolous appeal in favor of the NLRB).
20
The purpose of the rule is two-fold. First, it operates to compensate winners of judgments in the district court for the expense and delay of defending against meritless arguments in the court of appeals. Second, it seeks to deter such appeals and thus to preserve the appellate court calendar for cases worthy of consideration. See Clarion Corp., 494 F.2d at 865 (noting the appellant's conduct "has been frivolous and obstructive and has caused a shameful waste of judicial manpower"). The penalty aspect of the rule serves to vindicate public interests which go beyond compensating the appellee. Consequently, we believe that although ordinarily an award of damages and double costs would only be appropriate upon the motion of the appellee, in extraordinary cases such as this we may make such an award sua sponte. See 16 C. Wright, A. Miller, E. Cooper & E. Gressman, Federal Practice and Procedure § 3984 at 465 (1977).
21
As we have held above, these appeals are wholly and thoroughly frivolous. The first prerequisite for an award has thus been satisfied. The second prerequisite is met as well. It is evident that the appellant has wasted a good deal of the time of the district court and this court in reviewing his complaints which he filed with no serious intention of obtaining relief and solely for the purpose of harassment. His conduct, therefore, has burdened not only the defendants, but also the courts and derivatively other litigants who seek the prompt adjudication of their claims. We note that the appellant persists in mounting his self-styled "Attack on the Constitutionality of an Act of Congress" a claim which we have seen in this court before and which the appellant has apparently sought to litigate in the Court of Claims as well. See Louis G. Ruderer, 208 Ct. Cl. 1019 (1976).2 We are cognizant that the appellant has proceeded pro se in these actions. We consider this as militating against a finding that these appeals were prosecuted without any reasonable expectation of obtaining relief from the district court's judgments. Yet, the appellant by this time is certainly not without some practical experience with the law. His entire course of conduct in this case compels us to conclude that the assessment of damages is necessary in order to curb the appellant's litigious proclivities. In this case, we believe that damages in the amount of $2,500 to be divided equally among the appellees are warranted, see Clarion Corp., supra, as well as double costs.
*
After preliminary examination of the briefs, the court notified the parties that it had tentatively decided that oral argument was unnecessary. The notice provided that any party could file a "Statement as to Need of Oral Argument." See Fed.R.App.P. 2, 34(a); Circuit Rule 14(f). Neither party filed such a statement. Upon consideration of the briefs and the record, the appeal is submitted for decision without oral argument
1
28 U.S.C. § 516 captioned "Conduct of litigation reserved to the Department of Justice" provides:
Except as otherwise authorized by law, the conduct of litigation in which the United States, an agency, or officer thereof is a party, or is interested, and securing evidence therefor, is reserved to officers of the Department of Justice, under the direction of the Attorney General.
2
The appellant has also attempted to invoke 28 U.S.C. § 2282, a statute repealed by Congress in 1976, see 90 Stat. 1119 (1976), as a device to obtain review of the adverse district court judgment by a three-judge district court. This is not the first time he has used this tactic. See Ruderer v. United States, 462 F.2d 897, 898 n.1 (8th Cir.) (per curiam ), appeal dismissed and cert. denied, 409 U.S. 1031, 93 S. Ct. 540, 34 L. Ed. 2d 482 (1972) | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/384647/ | 635 F.2d 659
Venus MANDLEY et al., Plaintiffs-Appellants,v.Arthur F. QUERN et al., Defendants-Appellees.
No. 79-2091.
United States Court of Appeals,Seventh Circuit.
Argued April 30, 1980.Decided Dec. 24, 1980.
Stephen G. Seliger, Chicago, Ill., for plaintiffs-appellants.
Ellen Brewin, Sp. Asst. Atty. Gen., Chicago, Ill., for defendants-appellees.
Before CUMMINGS and BAUER, Circuit Judges, and EAST, Senior District Judge.*
PER CURIAM.
1
Plaintiff representatives of the class of persons receiving aid under Illinois' Aid to Families with Dependent Children program argue in this, the third appeal to this Court arising out of this litigation,1 that the Illinois AFDC program's special needs provisions2 violate the Fourteenth Amendment equal protection clause and that federal law requires disbursement of aid under those provisions to be made "forthwith." Defendants are the Illinois Department of Public Aid (IDPA), its director, and the United States Department of Health, Education and Welfare, which approves and administers federal funding to state AFDC programs.3
2
The district court found the special needs provisions to be constitutional and rejected the contention that they must be administered so as to grant special needs aid "forthwith." We affirm.
I.
3
The special needs provisions at issue provide for assistance both to AFDC families who are or may be deprived of shelter due to damage to their dwelling and to presumptively eligible AFDC families in need of clothing, shelter, or household goods. Plaintiffs argue that the provisions should also have covered families placed in need due to theft of cash, eviction for nonpayment of rent, termination of utility services, or loss or delay of AFDC checks.
4
Plaintiffs first assert that the special needs provisions burden a fundamental "right to survive" without compelling justification. There is no constitutional right to obtain welfare from government. Lavine v. Milne, 424 U.S. 577, 584, n.9, 96 S.Ct. 1010, 1015 n.9 47 L.Ed.2d 249 (1976); Weinberger v. Salfi, 422 U.S. 749, 771-72, 95 S.Ct. 2457, 2469-2470, 45 L.Ed.2d 522 (1975).
5
Plaintiffs next argue that the provisions create an arbitrary classification or are otherwise contrary to the equal protection of the laws. The provisions need merely be rational to be constitutional. Califano v. Aznavorian, 439 U.S. 170, 174-75, 99 S.Ct. 471, 473-474, 58 L.Ed.2d 435 (1978); Jefferson v. Hackney, 406 U.S. 535, 546, 92 S.Ct. 1724, 1731, 32 L.Ed.2d 285 (1972); Dandridge v. Williams, 397 U.S. 471, 485-86, 90 S.Ct. 1153, 1161-1162, 25 L.Ed.2d 491 (1970). We find them to be rational. Loss due to theft of cash is not covered because it is often impossible to verify. Loss due to non-payment of rent or utility bills is excluded because those payments are to be made from the family's basic AFDC check and not from a special needs grant. Loss due to delayed or lost AFDC checks is covered elsewhere in the Illinois AFDC program. Other special needs are not covered because Illinois desires to apportion its welfare budget so that grants actually made will be sufficient to alleviate the need for which they are given. See Quern v. Mandley, 436 U.S. 725, 746, 98 S.Ct. 2068, 2080, 56 L.Ed.2d 658 (1978); cf. Dandridge v. Williams, 397 U.S. 471, 479-80, 90 S.Ct. 1153, 1158-1159, 25 L.Ed.2d 491 (1970). Accordingly, the provisions are constitutional.
II.
6
Plaintiffs' second contention is that assistance under the special needs provisions must be furnished "forthwith" to comply with 45 C.F.R. § 233.120(a)(5) (1978). The district court correctly held that that regulation applies to emergency assistance aid, as provided for by 42 U.S.C. §§ 603(a)(5) & 606(e) (1976), and not to special needs provisions administered as part of an AFDC program. See generally Quern v. Mandley, supra, 436 U.S. at 735-36, 98 S.Ct. at 2074-2075.
7
Plaintiffs appear to make certain related contentions. To the extent that they argue that the "reasonable promptness" standard of 42 U.S.C. § 602(a) (10) applies to Illinois' special needs payments, both HEW and IDPA have conceded that this is the case. To the extent that they further contend that "reasonable promptness" necessarily means "forthwith" when applied to special needs payments, we disagree. We also hold that § 602(a)(10)'s reasonable promptness requirement does not impose rigid time limits applicable to all special needs grants. What is and what is not "reasonable promptness" must be decided on a case by case basis in light of the particular facts with which IDPA is faced; it cannot be decided in a vacuum.4 To the extent that plaintiffs argue that Illinois has not administered its special needs payments in compliance with the reasonable promptness standard, we find the record to be devoid of evidence on the question. Accordingly, no concrete controversy has here been presented on that issue. Finally, to the extent that plaintiffs ask this Court to remand the case for further hearings, we believe no useful purpose would be served by further inquiry into the legality of IDPA programs no longer in existence.
8
Plaintiffs' request for attorney's fees is denied. Each party shall bear its own costs.
9
Affirmed.
*
The Honorable William G. East, Senior Judge of the United States District Court for the District of Oregon, is sitting by designation
1
For the history of this litigation, see Mandley v. Trainor, 523 F.2d 415 (7th Cir. 1975) (Mandley I); Mandley v. Trainor, 545 F.2d 1062 (7th Cir. 1976) (Mandley II), rev'd and remanded sub nom. Quern v. Mandley, 436 U.S. 725, 98 S.Ct. 2068, 56 L.Ed.2d 658 (1978)
2
The provisions here at issue have been superseded by new special needs provisions and a new emergency assistance program which plaintiffs do not challenge in this litigation. We may, nevertheless, proceed to pass on the legality of the prior provisions. See Quern v. Mandley, 436 U.S. 725, 733-34 n.7, 98 S.Ct. 2068, 2073-2074 n.7, 56 L.Ed.2d 658 (1978)
3
See 42 U.S.C. §§ 601-603 (1976)
4
For example, as defendants have noted, a family ordered to be evicted in a week is not in need of aid within the hour. A family presently without shelter, however, may require aid "forthwith." Reasonable promptness is entirely dependent on the circumstances of the case | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1537410/ | 797 A.2d 1265 (2002)
2002 ME 88
Kelly MARIN
v.
Michael MARIN.
Supreme Judicial Court of Maine.
Submitted on Briefs: January 28, 2002.
Decided: June 4, 2002.
*1266 Paul Aranson, Scaccia, Lenkowski & Aranson, Sanford, for appellant.
Plaintiff did not file a brief.
Lisa M. White, Sanford, Guardian ad Litem.
Panel: SAUFLEY, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, and CALKINS, JJ.
DANA, J.
[¶ 1] Michael Marin appeals from the District Court's (Springvale, Sheldon, J.) denial of his motion to amend his divorce judgment to determine his parental rights and responsibilities with regard to his eldest son. Michael contends that the court erred in failing to exercise its jurisdiction. We agree, vacate, and remand.
I. BACKGROUND
[¶ 2] Michael and Kelly Marin, at the time of their divorce in November 2000, had three children, the eldest of whom was eleven-year-old Justin. In the month prior to the divorce, in a separate guardianship proceeding, the York County Probate Court (Nadeau, J.) granted coguardianship of Justin to Richard and Linda LeClair, Justin's maternal grandparents. The Probate Court stated that
Kelly Marin concedes that Michael Marin is the more stable parent who, therefore, in the Court's view may be the more appropriate custodian when and if the Court finds, pursuant to any subsequent Petition to Terminate Co-Guardianship which any party may file at an appropriate time in the future, that the Co-Guardianship granted herein should be terminated.
[¶ 3] The District Court (Springvale, Stavros, C.M.O.) entered a divorce judgment that did not determine any custody or visitation issues regarding Justin, stating: "This order makes no provision as to Justin who is in the custody of Linda LeClair, by York County Probate Court order ...."
[¶ 4] In the Probate Court, the LeClairs moved to amend the guardianship judgment to define the terms of Justin's visits with Michael. The Probate Court denied the motion on November 14, stating that the LeClairs already had full authority to regulate Justin's contact with his parents.
[¶ 5] Michael moved to amend the divorce judgment in the District Court to determine his parental rights and responsibilities, including making his residence Justin's primary residence, determining a schedule for parental contact, and awarding *1267 him child support. The District Court denied Michael's motion to amend the judgment, concluding that the motion was barred by res judicata because Michael "had the opportunity to establish that his custody was in Justin's best interest because that issue was germane to the Probate Court's decision on guardianship."
II. DISCUSSION
A. Res Judicata
[¶ 6] Michael contends that the court erred in concluding that the issues raised by his motion to amend the divorce judgment were already decided by the Probate Court, and were therefore barred by the doctrine of res judicata.
[¶ 7] We have recognized that there are two branches of res judicata: claim preclusion and issue preclusion. In re Kaleb D., 2001 ME 55, ¶ 7, 769 A.2d 179, 183. The present claim is not barred by res judicata because the parties do not raise the same claim or issue. The initial claim in the Probate Court was a claim for guardianship, not a claim for divorce. The Probate Court could only determine issues of parental rights and responsibilities as they related to the guardianship proceeding in which they arose. The Probate Court named guardians for Justin and suggested a preference for Michael having custody if the guardianship terminated, but it did not render a judgment regarding Michael's and Kelly's parental rights and responsibilities. Thus, the District Court erred in concluding that the claim was barred by the doctrine of res judicata.
B. Jurisdiction of the District Court
[¶ 8] Michael contends that the District Court should have declared the Probate Court order null and void because the Probate Court acted beyond the limits of the guardianship statute, 18-A M.R.S.A. § 5-204(c) (1998), in granting the LeClairs rights over all decisions pertaining to Justin. According to Michael, the District Court should have exercised its concurrent jurisdiction over issues regarding Justin's residence and visitation pursuant to 19-A M.R.S.A. § 1654 (1998 & Supp.2001).
[¶ 9] "The Probate Court is a statutory court of limited jurisdiction and its actions are void unless taken pursuant to statutory authority." In re Joseph B.G., 1997 ME 210, ¶ 5, 704 A.2d 327, 328. The Probate Court "has exclusive jurisdiction over guardianship proceedings." 18-A M.R.S.A. § 5-102 (1998). The District and Probate Courts share concurrent jurisdiction over issues of parental rights and responsibilities. 19-A M.R.S.A. § 1654.
[¶ 10] We do not accept Michael's attempt to avoid the Probate Court's guardianship decision and seek custody of Justin in a divorce proceeding to which the LeClairs cannot be parties. The District Court lacks the authority to modify the LeClairs' rights as guardians. Nonetheless, it has jurisdiction to determine parental rights and responsibilities as between Justin's parents subject to the outstanding guardianship, and it erred in failing to do so.[1]
The entry is:
Judgment vacated and remanded for the determination of the parents' rights and responsibilities with regard to Justin subject to the guardianship of the Probate Court.
NOTES
[1] In circumstances where the District Court and Probate Court are both exercising their concurrent jurisdiction in matters of child custody it may be advisable for the courts to confer by telephone. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537411/ | 27 B.R. 727 (1983)
In re DANEHY DEVELOPMENT CORP., Debtor.
Bankruptcy No. 82-02393-BKC-TCB.
United States Bankruptcy Court, S.D. Florida.
February 8, 1983.
*728 Hugh Quinn, Miami, Fla., for debtor.
ORDER DISCHARGING ORDER TO SHOW CAUSE
THOMAS C. BRITTON, Bankruptcy Judge.
This voluntary chapter 11 petition was filed on December 10, 1982 without any schedules, that is to say, without reflecting either the debtor's assets or liabilities. The debtor was required by Interim Rule 1007(d) to file these schedules not later than December 27. It failed to do so. On January 5, the debtor was ordered to file these schedules by January 10. (C.P. No. 5a). The debtor failed to do so. The debtor was then ordered to show cause why this case should not be dismissed or converted. (C.P. No. 7a). At the hearing held on February 7, the debtor announced that it had filed the schedules that day. It offered no excuse or explanation for its failure to comply with either the Rule or the Order of January 5.
It is quite apparent (C.P. No. 6) that the primary purpose of this case is to block the ex-wife of the debtor's president in her effort to collect $12,000 back alimony from him. Sheriff's in five Florida counties are looking for the president, Danehy. A State court has garnished all assets of the debtor. On the debtor's emergency motion, I denied on January 14 the debtor's request for injunctive relief to protect the president. (C.P. No. 8). Neither this proceeding nor this court are appropriate shelters for a husband being pursued by an angry ex-wife. The president's judicial relief must come from the State court or, if necessary, through appeal.
The debtor was formed so recently that it has received no income, incurred no expenses and, therefore, has filed no tax returns. The only disclosed stockholder is not the president, but is an apparent assignee, Patricia Kiepke, who lives in Tampa. The corporation's assets are said to be worth double its debt, 93% of which is undisputed, secured debt. The foregoing information is furnished by the debtor's pleadings. If they are accurate, there is no bonafide need for reorganization of this debtor nor is there any plausible prospect of a confirmable plan.
The debtor has contracted to pay its attorney $150 an hour, with a minimum charge of $10,000 for this exercise.
I find and conclude that no useful or beneficial purpose is likely to be achieved for the debtor in this court. It is certain to bear a substantial expense the longer this case lasts. It is equally apparent that the creditors are being delayed without any corresponding benefits. Therefore, the interests of creditors and the debtor would be better served by dismissal of this case.
Accordingly, this case is dismissed under 11 U.S.C. § 305(a)(1). Dismissal is with prejudice to the filing of any voluntary bankruptcy proceeding by this debtor earlier than September 1, 1983. The automatic stay is, therefore, automatically terminated. § 362(c)(2)(B). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537658/ | 140 N.J. Super. 160 (1976)
355 A.2d 693
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
JOHN McKINNEY, DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Submitted February 10, 1976.
Decided March 3, 1976.
*162 Before Judges LYNCH, LARNER and HORN.
Mr. Stanley C. Van Ness, Public Defender, attorney for appellant (Mr. Edward P. Hannigan, Deputy Public Defender, of counsel and on the brief).
Mr. William F. Hyland, Attorney General, attorney for respondent (Mr. Michael R. Ascher, Deputy Attorney General, of counsel and on the brief).
The opinion of the court was delivered by HORN, J.A.D.
A jury found defendant guilty of entering with intent to steal, larceny and assault and battery upon a police officer, following which the trial judge sentenced him to a two to three-year term in State Prison for the entering, a concurrent one to two-year term for the larceny and a consecutive one to two-year term for the assault. He took no appeal.
Subsequently he applied for "post conviction relief" which turned out to be a motion for transfer to a narcotics treatment program. Defendant appeals from the trial judge's denial of that relief. Although defendant should have applied for the specific relief which he sought by a motion pursuant to R. 3:21-10(b)[1] the judge considered the application as if the appropriate motion had been made. We do the same.
The only proof offered at the hearing below was that two narcotics treatment institutions would accept him as an inpatient.
*163 Although we affirm the ruling of the trial judge because we find no abuse of discretion we feel that there are additional reasons not referred to by him which support his decision.
On an application for transfer to a narcotics treatment program the burden rests upon the applicant to establish that he is an appropriate candidate for such relief. To that end, he is obliged to establish such facts as would move the judge to exercise his discretion favorably. The mere assertion or even proof that he is willing to participate in such extramural programs or that institutions offering such programs would accept him as a patient is insufficient.
Although R. 3:21-10(b) evidences a policy to facilitate rehabilitation of drug addicts in the hope that they may be restored to good health and become useful citizens in the community, State v. Davis, 68 N.J. 69, 84-85 (1975), such a policy competes with the policy to protect our citizens against all violators, whether they are repeating violators or not. The welfare of our citizens should be first and foremost. This therefore calls upon trial judges to be particularly circumspect in their consideration of such applications. As stated in State v. Davis, supra at 86: "The ultimate issue for determination is whether the purposes for which the custodial sentence * * * might reasonably be continued outweigh the interests sought to be served by transfer to a narcotics treatment center."
In the instant case there was no proof that defendant was an addict, a fundamental finding under the rule. Moreover, he failed to allege any affirmative intramural actions which would manifest a desire to rehabilitate himself, such as participating in group or individual drug-therapy programs currently available in most, if not all, of our institutions. An applicant's failure to take advantage of these programs may well create an aura of suspicion with respect to his sincerity in applying for an opportunity to secure treatment on a noncustodial basis.
*164 Assuming a bona fide motivation on the part of the applicant and a criminal record which does not militate against the granting of relief, the judge must further conclude that if the relief is granted there is a reasonable probability that the applicant will successfully complete the program, will assume his proper and rightful place in society without violation of the law, and that his release is not incompatible with the welfare of society. See N.J.S.A. 30:4-123.14.
The provisions added by the rule amendment mandate that an R. 3:21-10(b)(1) application to enable a defendant in custody to be transferred into a custodial or noncustodial treatment or rehabilitation program be accompanied by supporting affidavits and such other documents and papers as set forth the basis for such relief. A hearing shall be afforded only if the submitted material evidences that there is at least a prima facie showing of merit in the application in the light of the criteria referred to above. Of course, even if a hearing is conducted, the judge may reject the application on a weighing of all the proofs.
Defendant in the instant case failed to furnish any basis calling for favorable action on the part of the trial judge.
Accordingly, the denial of the application is affirmed.
NOTES
[1] The rule was amended effective September 8, 1975. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3776916/ | OPINION
{¶ 1} On January 9, 2006, the Licking County Grand Jury indicted appellant, Jason Klair, on one count of receiving stolen property in the fifth degree in violation of R.C. 2913.51 and one count of burglary in the second degree in violation of R.C.2911.12. On April 10, 2006, appellant pled no contest to the charges. By judgment entry filed April 11, 2006, the trial court found appellant guilty and sentenced him to nine months on the receiving stolen property count and four years on the burglary count. The trial court ordered the sentences to be served "consecutively with each other and to any other case from Morrow, Franklin or Delaware County."
{¶ 2} Appellant filed an appeal and this matter is now before this court for consideration. Assignment of error is as follows:
I {¶ 3} "THE SENTENCING OF THE DEFENDANT-APPELLANT PURSUANT TO THE OHIO REVISED CODE WAS UNCONSTITUTIONAL AND AN ABUSE OF DISCRETION."
I {¶ 4} Appellant claims his sentence was unconstitutional. Specifically, appellant argues two points: 1) his sentence was unlawful because it was ordered to be served consecutively with a misdemeanor sentence from Morrow County; and 2) his sentence is subject to remand pursuant to State v. Foster,109 Ohio St.3d 1, 2006-Ohio-856. We agree.
{¶ 5} In its brief at 4, the state concedes both issues. Therefore, appellant's sentence is vacated and the matter is remanded for resentencing pursuant to Foster.
{¶ 6} The sole assignment of error is granted.
{¶ 7} The sentence of the Court of Common Pleas of Licking County, Ohio is vacated and the matter is remanded to said court for resentencing.
By Farmer, J. Gwin, P.J. and Hoffman, J. concur.
JUDGMENT ENTRY
For the reasons stated in our accompanying Memorandum-Opinion, the sentence of the Court of Common Pleas of Licking County, Ohio is vacated and the matter is remanded to said court for resentencing pursuant to State v. Foster, 109 Ohio St.3d 1,2006-Ohio-856. Costs to appellee. | 01-03-2023 | 07-06-2016 |
https://www.courtlistener.com/api/rest/v3/opinions/1537289/ | 797 A.2d 816 (2002)
144 Md. App. 250
CALVERT JOINT VENTURE # 140
v.
Ross R. SNIDER, et ux.
No. 885, Sept. Term, 2001.
Court of Special Appeals of Maryland.
May 3, 2002.
*817 Carlton M. Green (Green, Leitch & Steelman on the brief) College Park, for appellant.
John Marshall (Moldawer & Marshall, P.C. on the brief) Rockville, for appellees.
Argued before DAVIS, BARBERA, and RAYMOND G. THIEME, JR. (retired, specially assigned), JJ.
*818 DAVIS, J.
The present controversy between appellant Calvert Joint Venture # 140 and appellees Ross R. and Nancy J. Snider emanates from a land installment contract dated November 23, 1987, containing a provision in which appellees reserved an interest in all "oil, gas or other mineral rights in and to" the subject property located in Calvert County, Maryland. The contract also included a provision requiring that appellees sign applications for the subdivision of the land during the life of the contract.
On March 24, 2000, appellant filed a Complaint for Declaratory Relief and Other Appropriate Relief against appellees in the Circuit Court for Montgomery County. Count I of the complaint requested declaratory relief regarding the "effect of and extent of the reservation of oil, gas and mineral rights by [appellees] in relation to [appellant's] intended use of the property purchased for a residential subdivision." Count II sought reformation of the November 22, 1987 land installment contract "to enable [appellant] to utilize the property for residential subdivision purposes without hindrance or interference from [appellees]." Count III sought specific performance of the terms of the contract with regard to the approval of the subdivision plats submitted by appellant. Appellees filed their answer on May 5, 2000.
On April 24, 2001, the trial court (McGuckian, J.) declared that the parties hold two distinct estates in the same land, the mineral rights reservation extended to appellees' heirs, the owner of the surface is entitled to subadjacent support of the surface, and, in removing the minerals, the owner is bound to do so without injury to the surface or the buildings on the surface. Furthermore, the court concluded that the sole issue before it was the issue of ownership rights under the mineral reservation, declining to order specific performance or reform the contract. Appellant filed a Motion to Alter or Amend Judgment on May 2, 2001, asking the court to specifically declare that appellees may not disturb the surface of the land where appellant had subdivided lots and to require appellees to sign the requested plats. The court denied appellant's motion on June 11, 2001. Appellant filed this timely appeal on June 27, 2001, in which it presented four questions, which we combine and rephrase for clarity as follows:
I. Did the trial court err in failing to address all issues presented in Counts I, II, and III?
II. Did the trial court err in holding the reservation of mineral rights extended to appellees' heirs?
We answer the above questions in the negative and affirm the judgment of the trial court.
FACTUAL BACKGROUND[1]
Appellant purchased approximately 145 acres from appellees in 1982. The parties entered into a land installment contract on November 22, 1987 with the intention of acquiring and subdividing the property into residential lots for resale. The contract provided in relevant part:
The Buyer will comply with all local and other laws and regulations governing occupancy and use of the said premises.
During the life of this contract, the [appellees] agree on the 106.248 parcel only to sign applications required to plat and record the property as a subdivision in accord with and record same, provided that all expenses incurred therewith will be paid in whole by the [appellant].
*819 [Appellant] may begin the subdivision process at any time during the life of the land sales contract.
The [appellees] reserve all oil, gas and other mineral rights. [Appellees] also reserve in connection with the oil, gas or other mineral reservations the right to execute leases or other documents relating to production of oil, gas and other minerals upon such terms as are acceptable to [appellees](the Grantors).
Approximately three years after the execution of the land installment contract, appellant began converting the property from a tree farm to a residential subdivision. In 1990, appellees agreed to sign the papers required to commence the subdivision process on the 106.248-acre parcel, pursuant to the above provisions. In addition, they signed the initial subdivision application, which commenced the process of subdividing the property for use as residential lots on the entire 154.2 acres.
Appellant filed a complaint for declaratory judgment against appellees in the Circuit Court for Calvert County in August 1995, alleging that appellees were unable to convey marketable title for tract 3. Appellant sought a declaration of the sale price for the remaining tracts, reformation of the contract, and specific performance. The issue concerning the mineral rights was not litigated. After a two-day trial, the court set the sale price for tracts 1 and 2 at $345,642 and ordered that those terms not modified by the order, including the reservation of mining rights, remain in full force and effect. Pursuant to the order, appellees subsequently executed a special warranty deed on October 17, 1996, which was recorded by appellant on May 30, 1997. The deed stated in relevant part:
SUBJECT TO Grantor's reservation of all oil[,] gas[,] or other mineral rights in and to the aforesaid property[,] Grantor also reserves in connection with the oil, gas or other mineral reservations, the right to execute leases or other documents relating to the production of oil, gas and other minerals upon such terms and conditions as are acceptable to Grantor.
In December 1999, appellant submitted a final subdivision plat, but appellees declined to sign it. The plat included the following language:
We, [appellees], owners of all oil, gas or other mineral rights in and to the aforesaid property, ... by virtue of the reservation ... contained in the [special warranty] Deed dated October 17, 1996, and recorded May 30, 1997 ....join in this plat for the purposes stated above, and to confirm said ownership in themselves for their lifetime and no longer and to confirm their right to prospect, mine and operate in and under the land for oil, gas or other minerals, by any and all subterranean mining methods that are permissible under current County and State regulations and will not interfere with the use of the surface of the land as a residential subdivision. [Appellees] acknowledge that said rights are subordinate to the use of the property as a residential subdivision and that they reserved no right of ingress to and on and egress from the surface of the land for the purpose of prospecting mining, drilling wells, and operating beneath the surface and extracting and removing oil, gas or other minerals from below the surface of the land....
(Emphasis added.) As a result of appellees' refusal to sign the application, appellant filed the instant case in the circuit court.
LEGAL ANALYSIS
I
In its Opinion and Order, entered April 24, 2001, the trial court found that the *820 contract at issue clearly and unambiguously reserved an ownership interest in the mineral rights to appellees. Relying on the "written documents presented for the [c]ourt's review, [which were devoid] of any language indicating that the reservation survives only through the life of either [appellee]," the trial court also found that the reservation extended to appellees' heirs. In construing the rights associated with appellees' reservation, the trial judge determined that, because appellees and appellant own two distinct interests in the land, "the owner of the surface and the owner of the minerals must each necessarily exercise the rights which go with his separate title with due regard for the rights of the other." The court did not address the issues "relating to the procedure, method, or timing of extraction of the disputed substances upon the surface estate," concluding that those issues were not before it.
Appellant's contentions are tri-fold. First, appellant alleges that the trial court failed to provide complete declaratory relief because it did not declare that appellees had no right to use the surface of the land at issue. Furthermore, continues appellant, the court failed to address appellant's claim for reformation of the contract. Finally, appellant asserts that the trial court erred in its failure to order specific performance by appellees. Appellees counter that appellant's arguments fail to appreciate the substance of the trial court's finding. Indeed, they argue, the lower court's findings that the parties owned independent estates in the same land, with mutual obligations of cooperation, effectively served as a final and appropriate ruling on all issues raised by appellant.
A
In construing a deed, the lower court is to give effect to the intent of the contracting parties. If the terms of the deed are clear and unambiguous, that intent must be gleaned from its four corners. See Gilchrist v. Chester, 307 Md. 422, 425, 514 A.2d 483 (1986). Only in instances when the terms are ambiguous may the court look to extrinsic evidence. Id.
Although a basic principle of real property law, there exists little case law regarding the relative rights of the parties when a reservation of minerals has been included in a deed. The Arizona case of Spurlock v. Santa Fe Pacific R.R. Co., 143 Ariz. 469, 694 P.2d 299 (Ct.App.1984), however, speaks directly to the issue. In Spurlock, the appellee filed a cause of action against the appellant, alleging conversion of helium removed from deposits underlying a parcel of land owned by the appellee. The appellant, the previous owner of all of the lands at issue, contended that it maintained its ownership interest in the underlying helium and other substances pursuant to a mineral reservation in the original conveyances to the appellee's predecessors in title. After a protracted trial, judgments were entered in favor of the appellee, quieting title in its favor as to all of the substances in issue.
In overruling the trial court, the Court of Appeals of Arizona reviewed the general approach to reservations of minerals:
[A] reservation of "all minerals whatsoever" reflects a general intent of the parties to sever the surface estate from the underlying mineral estate. It indicates that the parties intended to create two distinct, coexisting, and individually valuable estates. Thus, the grantor retains ownership of all commercially valuable substances separate from the soil, while the grantee assumes ownership of a surface that has value in its use and enjoyment. *821 Id. at 308 (citing Watt v. Western Nuclear, Inc., 462 U.S. 36, 50-55, 103 S. Ct. 2218, 76 L. Ed. 2d 400 (1983); Maynard v. McHenry, 271 Ky. 642, 113 S.W.2d 13 (1938)).
The Arizona court noted, however, that the ownership of the minerals was not the only issue before it:
... We recognize that in order for both the surface and mineral estates to co-exist and retain their individual value, some accommodation between the respective owners is necessary.
In general, the owner of the mineral estate possesses the incidental right of entering, occupying, and utilizing the surface to explore for and develop the underlying minerals.
Id. at 309 (citing 58 C.J.S. Mines and Minerals § 159 (1948)).
The court further noted:
The enumeration of ... minerals indicates a specific intent on the part of the contracting parties that these substances would be fully developed. In essence, the surface owner knew of and agreed to this burden on his estate. It is logical to assume that parties intending to sever the mineral from the surface estate would contemplate some surface destruction in the development of [the] substances....
Id.
Applying the above-stated rationale to the case at hand, we arrive at essentially the same conclusion as that reached by the trial court. Although we need not decide which substances are to be included within the phrase "all minerals whatsoever," as was the Spurlock court's task, the Arizona court's holdings with regard to the effects of a mineral reservation are applicable. The trial court correctly concluded that the parties own two distinct interests in the landappellees own an interest in the "oil, gas, or other minerals" and appellant owns an interest in the surface land. The provisions of the contract between the parties were, indeed, clear and unambiguous; therefore, the plain language controls.
Notably, appellant sought declaratory judgment as a consequence of appellees' refusal to execute the final subdivision plat in 1999, which provided, in part:
We, [appellees], owners of all oil, gas or other mineral rights in and to the aforesaid property, ... by virtue of the reservation ... contained in the [special warranty] Deed dated October 17, 1996, and recorded May 30, 1997 .... join in this plat for the purposes stated above, and to confirm said ownership in themselves for their lifetime and no longer and ... will not interfere with the use of the surface of the land as a residential subdivision. [Appellees] acknowledge that said rights are subordinate to the use of the property as a residential subdivision and that they reserved no right of ingress to and on and egress from the surface of the land for the purpose of prospecting mining, drilling wells, and operating beneath the surface and extracting and removing oil, gas or other minerals from below the surface of the land. ...
(Emphasis added.)
The language contained in the above final subdivision plat clearly conflicts with the unambiguous terms of the October 17, 1996 special warranty deed, which unequivocally reserve unto the Grantor "the right to execute leases or other documents relating to the production of oil, gas and other minerals upon such terms and conditions as are acceptable to Grantor." Appellees executed the special warranty deed which contained language that mirrored the land installment contract executed by the parties. Neither the special warranty deed nor the land installment contract provides *822 for appellees to relinquish their right of ingress or egress or to confirm that the interest in the property is limited to a life estate in the appellees. In other words, appellant resorted to the declaratory judgment proceeding to effectuate a modification of the terms to which the parties had agreed when it was unsuccessful in persuading appellees to sign the application for a final subdivision plat.
In addition, appellees possess the right to "use the surface in reaching and removing the minerals," as noted in the trial court's opinion (citing 54 Am.Jur.2d, Mines and Minerals, § 148). To decide otherwise would be to invalidate appellees' right to the materials. To that end, appellant's position that the trial court should have proclaimed that "appellees may not use the surface in any exercise of their mineral right reservation" is entirely without merit. The trial court correctly declined to make such a declaration.[2]
B
Similarly, appellant's second contention that the trial court did not address the issue of reformation of the contract is without merit.
[A]lthough courts exercising equity powers may reform an instrument to conform it to the intention of the parties, a written document will be reformed when and only when there is a mutual mistake of fact, or a mistake is made by one of the parties accompanied by fraud, duress or other inequitable conduct practiced on the person making the mistake by another party.
Maryland Port Admin. v. John W. Brawner Contracting Co., 303 Md. 44, 58-59, 492 A.2d 281 (1985) (citations omitted).
Appellant asserts that, because there was no express reservation of ingress and egress "and the unlimited development of mineral rights would necessarily involve a disturbance of the surface of the proposed residential building lots," the trial court should have reformed the contract to prohibit appellees from utilizing the surface. As explained above, however, the contract and the deed clearly and unambiguously provided appellees with an interest in the subterranean materials. As such, they retain the right of ingress and egress in furtherance of their right to the minerals. Neither party alleges mistake by fraud, duress, or other inequitable conduct; therefore, the trial court was without authority to reform a valid, clear, and unambiguous instruments in the manner proposed by appellant.
C
In its complaint, appellant sought specific performance of the terms and conditions of the subject land installment contract requiring appellees to sign applications to plat and record the property as a subdivision. Such relief, appellant contends, would reflect the "parties' intent as to the ultimate subdivision of the subject property into residential lots." The trial court's order did, indeed, reflect the parties' intentions, as stated above. The unambiguous language of the contract provided appellees with a reservation interest in the land's subterranean oil, gas, and minerals. As noted by appellees in their brief, the subdivision plats submitted to them in December of 1999 contained the following relevant language:
*823 [Appellees] acknowledge that [their right to prospect, mine and operate in and under the land for oil, gas or other minerals, by any and all subterranean mining methods] are subordinate to the use of the property as a residential subdivision and that they reserved no right of ingress to and on and egress from the surface of the land for the purpose of prospecting mining, drilling wells, and operating beneath the surface and extracting and removing oil, gas or other minerals from below the surface of the land....
In submitting this plat, appellant was asking appellees to forfeit an interest that they rightfully owned under the original contract. The court did not have the authority to order such relief. Appellees confirmed their original intentions in refusing to sign the December 1999 subdivision plats. Moreover, the trial court's finding that appellees maintained a right to ingress and egress effectively addressed Count III of appellant's complaint.
II
Finally, appellant assigns as "clear error" the lower court's finding that the reservation of mineral rights extends to appellees' heirs. In asserting this contention, appellant relies on the following language, contained in Md.Code (1996 Repl. Vol.), Real Prop. (R.P.) § 4-105:
No words of inheritance are necessary to create an estate in fee simple or an easement by grant or reservation. Unless a contrary intention appears by express terms or is necessarily implied, every grant of land passes a fee simple estate, and every grant or reservation of an easement passes or reserves an easement in perpetuity.
Because the Special Warranty Deed executed by appellees contained express language that the right to execute leases for the production of oil, gas, and other minerals is limited to appellees exclusively, appellant argues, the reservation in the land installment contract is limited, "by necessary implication," to a term of the lives of appellees only. Appellees counter that "there was no language in the reservation clause of the Special Warranty Deed to suggest a life estate or other limited estate"; therefore, the trial court properly concluded that appellees' reservation was an interest in fee simple.
Case v. Marshall, 159 Md. 588, 152 A. 261 (1930), cited by appellees, stands for the proposition that words of limitation or inheritance are not essential to create an estate in fee simple:
[W]here a contrary intention is not clearly shown, both deeds and assignments, as well as wills, though without words of limitation or perpetuity, are presumed to carry such estate as the grantor, assignor, or testator has the power to convey, assign, or dispose of by will, and not an estate limited to the life of the grantee, assignee, devisee, or legatee, or an estate or interest less than that over which such party has the power of disposition.
Id. at 594, 152 A. 261. This principle was later codified at R.P. § 4-105, supra. When read together, it is clear that Maryland law favors the estate in fee simple, as opposed to a limited estate. Relying on the plain language of the contract, the court concluded that there were no words that would support the finding of an intention contrary to the existence of an estate in fee simple. Moreover, the court took into account the testimony presented at trial, which bolstered the finding that it was the intent of the parties to bequeath appellees' interest to their children and grandchildren. In light of the evidence presented, the trial court's findings did not constitute clear error.
*824 JUDGMENT OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY AFFIRMED.
COSTS TO BE PAID BY APPELLANT.
NOTES
[1] The parties jointly stipulated to the facts of the case.
[2] Contained within its attack on the declaratory relief granted is appellant's contention that the trial court should have addressed all applicable zoning regulations and other statutes relevant to mining. This issue was simply not before the court. Appellant never requested such relief in its complaint. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537300/ | 797 A.2d 474 (2002)
Joyce REZENDES
v.
Daniel BEAUDETTE et al.
No. 2000-365-Appeal.
Supreme Court of Rhode Island.
May 22, 2002.
*475 Present WILLIAMS, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.
Carolyn R. Barone, Warwick, David H. Stillman Braintree, MA, for Plaintiff.
Humberta M. Goncalves, for Defendant.
OPINION
PER CURIAM.
This case came before the Court for oral argument on April 9, 2002, pursuant to an order that directed both parties to appear to show cause why the issues raised by this appeal should not summarily be decided. After hearing the arguments of counsel and examining the memoranda filed by the parties, we are of the opinion that cause has not been shown and that the issues raised by this appeal should be decided at this time. The facts pertinent to this appeal are as follows.
*476 I
Facts and Travel
This appeal arises from a claim of malicious prosecution after plaintiff, Joyce Rezendes (plaintiff), was charged with larceny. The plaintiff was a long-time employee of Eagle Video, Inc., a corporation that owns several Blockbuster Video franchises. The defendants, Daniel and Russell Beaudette (Daniel and Russell respectively or collectively referred to as defendants) are co-owners of the video store, serving as president and vice president.[1] The plaintiff beganworking at the Seekonk, Massachusetts, video store in 1987 as a customer service representative (CSR) and, after several good performance evaluations, eventually became an assistant manager. As an assistant manager, plaintiff was responsible for issuing various customer credits, including goodwill credits and extended viewing credits. Only a manager or assistant manager could issue such credits, which required the employee to enter a password into the cash register. A manager or assistant manager could change his or her password at any time.
In March 1993, Laurine Brady (Brady), manager of the Seekonk store, noticed that the number of credits issued through plaintiff's password was inordinately high. Brady also testified that the credits issued for extended viewing did not coincide with late viewing fees, raising her suspicions. Consequently, Brady informed Daniel about the discrepancies. The defendants then checked employee work schedules and payroll records and compared them with the times that excessive credits were given. According to defendants, plaintiff's work schedule was the only one that coincided with the times that the credits were issued.
On March 10, 1993, defendants and Brady held a meeting with plaintiff, in a room in the back of the Seekonk store. At this meeting, plaintiff was questioned about the unusually high number of credits that had been issued with her password. The plaintiff explained that in December 1992, she had informed Brady that other CSRs had managers' passwords, including hers. Brady denied that plaintiff had ever reported such news to her. According to Daniel, plaintiff never gave a satisfactory explanation for the discrepancies in the credits. At the end of the meeting, therefore, Daniel took plaintiff's keys and put her on suspension. Daniel then told plaintiff that Eagle Video, Inc. was going to "investigate further and get back in touch with her."
Concerned that plaintiff did not have a satisfactory explanation when confronted with the discrepancies, Daniel contacted four customers who had received credits under plaintiff'spassword within that week. Although each of the fo ur customers reported that plaintiff, or a woman who fit her description, had waited on them, none of the customers reported actually receiving credits. Instead, they all reported that they had paid in full for their movie rentals.
According to Daniel, the total amount of credits issued to those four individuals totaled $31.20. Russell testified that he then calculated that plaintiff had issued $2,135 in excessive credits by comparing the average amount of credits issued by the manager and the other assistant manager with plaintiff's average from September 1992 to March 1993.
Shortly thereafter, defendants filed a complaint with the Seekonk Police Department (police), reporting an internal theft of $2,135. The defe ndants gave the police *477 computer records indicating the number of credits issued, by type, and employee histories that kept track of all the activities of each employee's account for the preceding two-month period. The defendants left samples of the comput er records with the police.
The plaintiff testified that approximately one week after the meeting, the police contacted her. She subsequently was charged with larceny in violation of the criminal laws of the Commonwealth of Massachusetts. The charge later was dismissed. In March 1994, plaintiff filed a claim against defendants for malicious prosecution. The defendant s filed a counterclaim against plaintiff for negligent and/or intentional acts by plaintiff in the course of her employment at Eagle Video, Inc. A Superior Court jury trial began on May 8, 2000.
At trial, besides the facts stated above, Stephanie Kapstein (Stephanie), a CSR at the Seekonk store, testified for plaintiff. Stephanie testified that CSRs could see the passwords of the manager and assistant manager by simply standing behind them as they typed them into the cash register. Moreover, Stephanie testified that CSRs sometimes used these passwords withoutpermission to prevent delays in serving customers. Finally, Stephanie testified that she lived with her mother and plaintiff, who was her mother's best friend.
After Stephanie's testimony, her mother, Paula Kapstein (Paula), testified. Paula explained that she owned a hair salon and that Brady and Kheradi were her clients. Paula testified that Brady and Kheradi discussed problems they had at work "with people * * * jumping off and on each other's computers and using each other's codes."
In addition to her testimony about the investigation, Brady also testified about how an employee could have stolen money from the store. According to Brady, at the time a customer was renting a video, an assistant manager simply could put a credit command into the cash register and pocket the money paid by the customer. Consequently, the daily receipts would balance at the end of the day because the computer would believe that no payment was due on the sale.
At the conclusion of plaintiff's case, defendants made a motion for judgment as a matter of law. The trial justice denied the motion. The jury ultimately found in favor of plaintiff in the amount of $67,000. The jury also found in favor of plaintiff on defendants' counterclaim. The trial justice then denied defendant s' renewed motion for judgment as a matter of law. The defendants also filed a motion for a new trial, which was granted by the trial justice.
The plaintiff filed a timely appeal from the trial justice's grant of defendants' motion for new trial. The defendants also filed a cross-appeal from the trial justice's denial of their renewed motion for judgment as a matter of law.
II
Motion for a New Trial
The plaintiff argues that the trial justice abused his discretion because he "summarily substituted" his judgment for that of the jurors by failing to believe plaintiff's testimony. We disagree.
It is well established that the trial justice acts as a "superjuror" in considering a motion for a new trial. English v. Green, 787 A.2d 1146, 1149 (R.I.2001) (quoting Long v. Atlantic PBS, Inc., 681 A.2d 249, 254 (R.I.1996)). Therefore, if the trial justice:
*478 "reviews the evidence, comments on the weight of the evidence and the credibility of the witnesses, and exercises his * * * independent judgment, his * * * determination either granting or denying a motion for new trial will not be disturbed unless he * * * has overlooked or misconceived material and relevant evidence or was otherwise clearly wrong." Id. (quoting Kurczy v. St. Joseph Veterans Association, Inc., 713 A.2d 766, 770 (R.I.1998)).
If the trial justice determines that the evidence is evenly balanced or that reasonable minds could differ on the verdict, he should not disturb the jury's decision. See Perkins v. City of Providence, 782 A.2d 655, 656 (R.I.2001) (citing Kurczy, 713 A.2d at 770). However, if the trial justice determines that the verdict is against the preponderance of the evidence, and thus fails to do justice between the parties, he should grant the motion. See id.
In the instant case, the trial justice, in deciding the motion for new trial, properly considered the evidence and commented on the credibility of the witnesses. The trial justice specifically stated that he did not believe plaintiff's testimony that she had told defendants that others were using her password. The trial justice then determined that "the jury did not do substantial justice in this case" and that "the evidence preponderates against the verdict." He concluded that "[a]ssessing the evidence independently and exercising my function as a [superjuror], I find that there was an abundance of probable cause to have gone to the police toinitiate this accusation." The trial justice did not overlook or misconceive material evidence in making this determination. Instead, it was well within his discretion to determine the credibility of the witnesses. We disagree with plaintiff that the trial justice misconceived the evidence by erroneously referring to Stephanie as a possible "family member." The record shows that plaintiff lived with Stephanie and that she was Paula's best friend. The trial justice's error, therefore, is of no consequence.
III
Judgment as a Matter of Law
The defendants filed a cross-appeal, arguing that the trial justice erred by denying their motion for judgment as a matter of law because plaintiff fa iled to prove the elements required for malicious prosecution. Specifically, defendant s assert that plaintiff failed to prove both that defendants "initiated a proceeding" and that there was a lack of probable cause to prosecute plaintiff. We disagree.
We have previously stated that in determining the appropriateness of a judgment as a matter of law, this Court
"considers the evidence in the light most favorable to the nonmoving party, without weighing the evidence or evaluating the credibility of witnesses, and draws from the record all reasonable inferences that support the position of the nonmoving party. * * * If, after such a review, there remain factual issues upon which reasonable persons might draw different conclusions, the motion for [judgment as a matter of law] must be denied * * *." Martino v. Leary, 739 A.2d 1181, 1182 (R.I.1999) (quoting DeChristofaro v. Machala, 685 A.2d 258, 262 (R.I.1996)); see also Barone v. The Christmas Tree Shop, 767 A.2d 66, 68 (R.I. 2001).
Moreover, to prove a claim of malicious prosecution, the party bringing the action must prove that the opposing party (1) initiated a prior criminal proceeding against him or her, (2) that there was no probable cause to initiate the proceeding, (3) the proceeding was "instituted maliciously," *479 and (4) the proceeding terminated in his or her favor. Beaudoin v. Levesque, 697 A.2d 1065,1067 (R.I.1997) (quoting Solitro v. Moffatt, 523 A.2d 858, 861-62 (R.I.1987)). The party bringing an action for malicious prosecution must prove his or her claim by "clear proof." Clyne v. Doyle, 740 A.2d 781, 782 (R.I.1999) (quoting Brough v. Foley, 572 A.2d 63, 66 (R.I.1990)). Finally, "probable cause exists when facts and circumstances would lead an ordinarily prudent and careful person to conclude that the accused is guilty. * * * [I]t is sufficient that the facts known to the accuser provide reasonable grounds for a belief that criminal activity at the hands of the accused has occurred." Id. at 783 (quoting Solitro, 523 A.2d at 862).
The defendants first argue that plaintiff did not prove that defendants had initiated a proceeding against her because the only evidence presented was that Daniel and Russell compiled computer records and took them to the police, reporting an "internal theft." Moreover, defendants argue that the docket sheet indicated that the complainant was "Edward Souza," an individual completely unknown to defendant. We disagree.
Considering the evidence in the light most favorable to plaintiff, and drawing all reasonable inferences in her favor, reasonable minds could differ about whether defendants had initiated an action against he r. The defendants testified that they took payroll and employee records to the police to report an internal theft. Daniel testified that at the time he went to the police, he believed plaintiff had stolen money from him. Moreover, although defendants argue that that an individual named "Edward Souza" initiated the complaint, Russell stated, in his deposition that he filed the complaint with the police. Finally, he also acknowledged, during his testimony, that Edward Souza appeared to be a member of the police department. Consequently, the trial justice did not err in determining that a jury could have found that defendants initiated the prosecution.
The defendants also argue that plaintiff did not prove the requisite absence of probable cause to sustain a claim of malicious prosecution. We disagree.
In the instant case, considering the evidence in plaintiff's favor, a reasonable person could have differed on whether defendants had probable cause to file a complaint against plaintiff. The evidence shows that defendants made phone calls to only four of the customers who had received suspicious credits. Some of these customers were able to state only that someone matching plaintiff's description had waited on them. Moreover, although the total amount of excessive credits from these four customers was only $31.20, defendants informed police that plaintiff had stolen more than $2,000. Finally, if plaintiff's testimony that she had reported to Brady that other individuals had her password is taken as true, reasonable persons could differ about whether defendants had made an adequate internal investigation before reporting the theft to the police.
Consequently, after considering the record and drawing all reasonable inferences in favor of the plaintiff, we conclude that the trial justice did not err in denying the defendants' motion for judgment as a matter of law.
Conclusion
Accordingly, the plaintiff's appeal and the defendants' cross-appeal are denied and dismissed. The judgment of the Superior Court is affirmed. The papers of the case are returned to the Superior Court for a new trial.
NOTES
[1] Celeste Beaudette Kheradi (Kheradi) is also a shareholder. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537330/ | 797 A.2d 353 (2002)
Robert NIGRA and Kathleen Nigra, Appellants,
v.
Joseph P. WALSH, Jr., Appellee.
Superior Court of Pennsylvania.
Argued December 11, 2001.
Filed April 17, 2002.
*355 Gregory L. Nester, Norristown, for appellants.
Nathaniel P. D'Amico, Norristown, for appellee.
BEFORE: JOYCE, OLSZEWSKI and MONTEMURO[*], JJ.
*354 JOYCE, J.
¶ 1 Appellant, Robert Nigra,[1] appeals from the August 1, 2001[2] judgment entered by the Court of Common Pleas of Montgomery County in favor of Appellee, Joseph P. Walsh, Jr. Upon review, we reverse and remand for a new trial consistent with this memorandum.
¶ 2 The factual and procedural background of this case are as follows: Appellant commenced this personal injury action as result of a March 5, 1994 motor vehicle accident which occurred when the vehicle driven by Appellee collided with the vehicle in which Appellant was a passenger. That vehicle was being operated by Appellant's wife, Kathleen Nigra. While Appellant claimed to have suffered injuries, in the nature of disc herniations, as a result of this collision, Kathleen Nigra made no such claim. Appellant also claimed that as a result of the injuries suffered from the accident, he was forced to close down his gas station. At the trial held on January 25, 2001, Appellee admitted his negligence in this matter but argued that his negligence was not the proximate cause of Appellant's injuries. The jury returned a verdict in favor of Appellee, finding that his negligence was not the proximate cause of Appellant's injuries.
¶ 3 Appellant filed a post-trial motion seeking a new trial. The motion was denied by the trial court on May 3, 2001. The instant appeal followed.
¶ 4 The questions presented for our review are as follows:
I. Whether the trial court erred in denying Appellant's motion for a new trial because the trial judge permitted the jury to hear evidence that the Appellant's [sic] were receiving social security disability benefits.
II. Whether the trial court erred in excluding cross-examination on the issue of bias.
Brief for Appellant, at 4 (initial capitalization omitted).
¶ 5 Before addressing these issues, we set forth our well-settled standard of review. "We are aware of our deferential standard when reviewing a trial court's decision to grant or deny a new trial: the power to grant or deny a new trial lies inherently with the trial court, and we will not reverse its decision absent a clear abuse of discretion or error of law which controlled the outcome of the case." Tudor Ins. Co. v. Township of Stowe, 697 A.2d 1010, 1012 (Pa.Super.1997) (citation omitted). The trial court abuses its discretion when it misapplies the law or when it reaches a manifestly unreasonable, biased or prejudiced result. Chanthavong v. Tran, 452 Pa.Super. 378, 682 A.2d 334, 338 (1996) (citations omitted).
¶ 6 First, Appellant argues that the trial court erred in permitting Appellee to present evidence that Appellant was *356 receiving social security disability benefits. This, according to Appellant, violates the collateral source rule. We agree.
Generally, "[t]he collateral source rule provides that payments from a collateral source shall not diminish the damages otherwise recoverable from the wrongdoer." Johnson v. Beane, 541 Pa. 449, 664 A.2d 96, 100 (1995). This rule "was intended to avoid precluding a claimant from obtaining redress for his or her injury merely because coverage for the injury was provided by some collateral source, e.g. insurance." Beechwoods Flying Service, Inc. v. Al Hamilton Contracting Corp., 504 Pa. 618, 476 A.2d 350, 352 (1984); see also, id. at 353 (the rule is "intended to prevent a wrongdoer from taking advantage of the fortuitous existence of a collateral remedy"); Denardo v. Carneval, 297 Pa.Super. 484, 444 A.2d 135, 140 (1982) ("Pennsylvania law is clear; the victim of a tort is entitled to the damages caused by the tortfeasor's negligence regardless of compensation the victim receives from other sources"), citing, inter alia, Boudwin v. Yellow Cab Co., 410 Pa. 31, 188 A.2d 259 (1963).
Griesser v. National R.R. Passenger Corp., 761 A.2d 606, 609 (Pa.Super.2000).
¶ 7 Further, "[w]hen improperly admitted testimony may have affected a verdict, the only correct remedy is the grant of a new trial." Id. at 608 (citing Collins v. Cooper, 746 A.2d 615, 620 (Pa.Super.2000)). In the case at bar, our examination of the record shows that Appellee's counsel cross-examined Appellant regarding the fact that Appellant applied for social security disability benefits. The questions were phrased in such a way as to suggest that Appellant was indeed receiving social security benefits. The following is the text of the questions regarding social security benefits elicited by counsel on cross-examination:
"Q [By Defense counsel]: Okay, You're still on Social Security; are you not?
Mr. Nester [Appellant's counsel]: Objection, Your Honor.
Q[By Defense counsel]: Or do you have heart problems?
A[By Appellant]: No I don't have heart problems.
Q: You take medication; do you not?
A: That little bit is insignificant.
Q: If you don't take it will you have a problem?
A: I don't think so.
Q: Okay.
A: The doctor might think so but I don't.
The Court: What kind of heart medication do you take?
A[By Appellant]: Lepressor and an aspirin.
[sidebar discussion]
* * * * * *
Q[By Defense Counsel]: In front of you, you have some records, some of which you filled out, and the purpose for which I gave them to you is so you could follow me on certain questions. If you don't remember what you said, you can refer to those.
Did you make an application to the government claiming that you were disabled, beginning in January, 1998, for badness in your back and heart disease[?]
Mr. Nester [Appellant's counsel]: Kindly note my objection.
The Court: Overruled.
A[By Appellant]: Yeah.
Q: You did? And did you tell them the type of medications you were on?
*357 A: I probably did.
Q: Okay. And were some of those medications heart medications?
A: At that time, yes.
Q: And did you tell them that you had a heart catherization, was sent to Albert Einstein, and was removed from Cardiac Intensive Care to Albert Einstein?
A: Yes.
Q: Did you write a letter to them dated... April 4, 1998?
* * * * * *
A: Yeah, I sent this letter in.
Q: Okay. Does that suggest that you have heart disease?
A: It says here, I'm on heart medication.
Q: Does it say you're on heart medication for heart disease?
A: Heart medication for heart disease.
Q: Is it still true?
A: It may be but I don't think so.
Q: Then, you also happened to fill out some questionnaires for them about your daily pain?
A: I believe we did, yeah.
* * * * * *
Q: And they also ask you to answer some questions on the Daily Activities Questionnaire.
A: Okay.
Q: Okay. Now you signed all these papers?
A: Yeah, I did.
Q: And what's contained in them is true; is it not?
A: At that time, it was true, sure.
Q: Okay. Is there anything that's not true today, I mean, that's changed?
A: Well, I'm not taking all these heart medications anymore.
N.T., 1/26/2001, at 190-200 (emphasis added).
¶ 8 Further, during Appellee's cross-examination of Kathleen Nigra, the issue of social security benefits was also raised as follows:
Q[By Defense counsel]: Did you help him fill out Social Security Administration, the application, where he complained of shortness of breath and an inability to walk[,] and heart problems?
A[By Kathleen Nigra]: After he closed the gas station, I said that he was having trouble walking, and yes, I did fill out Social Security forms for him.
Q: In fact most of the Social Security applications that were filed by your husband were authored by you; is that correct?
A: They were written by me and filled out by me. With his help, we would sit down and he would tell me. My handwriting is better than his and I would fill them out, with his input, as to how he felt.
Q: You have been on Social Security Disability and you knew how to fill out these forms; is that correct?
Mr. Nester [Appellant's counsel]: Objection, Your Honor.
The Court: Overruled.
Q[By Defense counsel]: You knew how to fill out these forms; is that correct?
A: I answered the questions. I don't know what you mean by knowing how to fill out the forms. I answered questions.
Q: Well, you've been through the process and it took your husband three times going through the process in order to get that to fruition; did it not?
Mr. Nester: Objection your Honor.
The Court: To make applications, in other words?
Defense counsel: Yes.
*358 Q:[By Defense counsel]: I mean, a number of applications were made; is that correct?
A: Well, we went through the process. We did theI forget, exactly, what the procedure was. We filled out the application and we had to do further
N.T., 1/25/2001, at 54-56 (emphasis added).
¶ 9 In addition to the cross-examinations, in his opening statement, Appellee's counsel unequivocally informed the jury that Appellant was receiving social security benefits. Counsel stated as follows: "We're not suggesting that he [Appellant] doesn't have problem with his back. In fact, he applied for Social Security Disability, was turned down a few times. He finally did get it after he developed a heart condition, not related to this accident, [and] had a few heart operations." N.T., 1/25/2001, at 13 (emphasis added).
¶ 10 Based on the above excerpts and our review of the record, we conclude that the questions by Appellee's counsel when combined with his opening statements did indeed suggest to the jury that Appellee was receiving social security disability benefits, and that his wife, Kathleen was, or had been receiving social security disability benefits. The cumulative effect of counsel's questions and comments is that the jury was informed that Appellant was receiving social security disability benefits for the same injury which is the subject of the litigation.
¶ 11 We recognize that Appellee's proffered reason for the inquiry about social security was to point out the inconsistency between the statements made by Appellant in the social security application and Appellant's position and statements at trial.[3] However, Appellee's questions and comments did not always focus on the alleged inconsistencies, but sometimes focused on the fact that Appellant was receiving social security benefits.[4] This leads us to question whether the real reason for the references to social security benefits was to inform the jury that Appellant was receiving those benefits. See Lengle v. North Lebanon Township, 274 Pa. 51, 117 A. 403 (1922). In Lengle, evidence was admitted that the children of a decedent were receiving compensation from a collateral source. The offer supporting the admission of the evidence stated that the purpose was to show that plaintiff could not maintain the action in right of the children. The court found that "[t]he real purpose (not part of the offer) was to convey to the jury the fact *359 that the children were already being taken care of under the compensation laws of the state, and the amount received by them. No further suggestion was necessary to convince [the jury] the township should not be asked to pay more to the children or any sum in relief of the employer." Id. at 404. See also Lobalzo v. Varoli, 409 Pa. 15, 185 A.2d 557, 559 (1962).
¶ 12 Further support for our skepticism about the proffered reason lies in Appellee's questioning of Kathleen Nigra. Kathleen's claim was only based on loss of consortium and her health, physical well being and financial status were not at issue. Nevertheless, Appellee's counsel cross-examined Kathleen about the fact that she had been or was still receiving social security benefits, about the fact that Appellant applied for social security benefits several times before the application came to fruition.[5]
¶ 13 Appellee argues that because of the questions posed by Appellant's counsel in his direct examination of Appellant in response, Appellee is entitled to explore the issue of social security benefits on cross-examination. While we agree that Appellee is entitled to explore on cross-examination a subject raised during direct examination, the cross-examination in this case exceeded the subject of the direct examination. On direct examination, the following exchange took place:
Q[By Appellant's counsel]: When did you first see a doctor for your heart?
A[by Appellant]: Probably in September of, I guess, `97.
Q: About four months or so after you shut the service station down?
A: Whatever the difference is between the end of May and September.
Q: What led you to the heart doctor?
A: I thought I had indigestion on a consistent basis, and I went to go see him, figuring he'd give me Maalox or something, you know. And he thought it wasn't and he said, why don't you try a stress test?
Q: Who was that doctor, by the way?
A: That was Carnival.
Q: Did he perform a stress test?
A: Yes.
Q: And what happened next in terms of your heart care?
A: They told me I had three blocked arteries.
Q: And what did they do?
A: They sent me to Einstein and they put two stents in. They couldn't put the third one in because they can't get to it.
Q: Now, during the period of time that you were treated for your heartwhen was your heart surgery?
A: September.
Q: Same month?
A: Probably, the end of September or early October. I mean, it was bing, bing, boom.
Q: And after the surgery, who did you treat with for your heart?
A: Santilli, Dr. Santilli. And Carnival, too, both of them.
Q: For how long did you treat with Dr. Santilli?
A: Maybe a year.
Q: And during that year, did you treat with any doctors for your back condition?
*360 A: At that time, yeah. I was seeing Dr. Randall Smith.
N.T., 1/25/2001, at 136-137.
¶ 14 The above questions and answers regarding Appellant's heart condition in no way relate to, imply, or suggest that Appellant filed a social security application or was receiving social security disability benefits. Therefore, Appellant's direct examination does not, and could not provide the basis for Appellee's cross-examination on the issue of Appellant's receipt of social security disability benefits. Because of our conclusion that Appellant did not initiate the issue of social security benefits, we find that Collins v. Cement Express, Inc., 301 Pa.Super. 319, 447 A.2d 987, 988 (1982) is inapplicable. Collins involved a situation in which our Court determined that evidence of the plaintiff's application for and receipt of collateral benefits (social security benefits) was properly admitted because the plaintiff himself first introduced that subject at trial.
¶ 15 Appellee also argues that the collateral source rule was not violated because the jury found that Appellee's negligence was not the proximate cause of Appellant's injuries; the issue of damages was not reached by the jury and as such the collateral source rule was not implicated. We disagree. While the primary focus of the collateral source rule is to avoid the preclusion or diminution of the damages otherwise recoverable from the wrongdoer based on compensation recovered from a collateral source, in some instances, the violation of the collateral source rule can affect the jury's deliberation and decision on the issue of liability. As our Supreme Court noted in Lobalzo v. Varoli, 409 Pa. 15, 185 A.2d 557 (1962), in some cases where there is a violation of the collateral source rule,
it is impossible to conjecture what influence the erroneously admitted evidence on workmen's compensation and unemployment compensation, as well as the misleading charge, had in bringing the jury to the conclusion it reached. When an error in a trial is of such consequence that, like a dash of ink in a can of milk, it cannot be strained out, the only remedy, so that justice may not ingest a tainted fare, is a new trial. The defendants' improper emphasis on the subject of an assumed double or triple payment may well have caused the jury to disbelieve the plaintiff with regard to his testimony on the manner in which the accident occurred.
Id. at 561.
¶ 16 In the instant case, pursuant to Lobalzo, supra, we hold that Appellee violated the collateral source rule and that it is impossible to conjecture what influence this violation had in the bringing the jury to the conclusion that Appellee's negligence was not the proximate cause of Appellant's injuries.
¶ 17 The second issue raised by Appellant concerns the trial court's exclusion of a portion of the deposition testimony of Appellee's expert, Dr. William H. Spellman. Appellant claims that the jury should have heard a question and answer from the deposition of Dr. Spellman because they were not objected to at the deposition (see Pa.R.C.P. 4016(c)): "Q: Would it be fair to say that all of the independent medical examinations that you perform are done on behalf of insurance carriers? A: No. Most of them are, but not all of them .... probably about 90 percent of the time, it's on behalf of defendants." Brief for Appellant, at 14.
¶ 18 While this evidence may be admissible to establish bias pursuant to Pa.R.E. 411, we agree with the trial court that the prejudicial effect of this information outweighs *361 its probative value. See Pa.R.E. 403. Therefore, we find no abuse of discretion in this ruling.
¶ 19 In conclusion, we find that Appellee violated the collateral source rule by informing or suggesting to the jury that Appellant was receiving social security disability benefits for the same injuries at issue in the current litigation. Because it is impossible to determine what effect this violation had on the jury, we reverse the judgment entered by the trial court and remand for a new trial consistent with this memorandum.
¶ 20 Reversed and remanded for a new trial. Jurisdiction Relinquished.
¶ 21 OLSZEWSKI, J. files Concurring and Dissenting Opinion.
Concurring and dissenting opinion by OLSZEWSKI, J.
¶ 1 While the expression of the majority view provides a persuasive analysis and sound rationale, I am obliged to differ and must respectfully offer a concurring and dissenting memorandum.
¶ 2 I review this case in light of our holding in Collins v. Cement Express, 301 Pa.Super. 319, 447 A.2d 987 (1982). In Collins, plaintiff appealed the trial court's admission of testimony regarding his application for and receipt of social security benefits as violative of the collateral source rule. Id. at 988. At trial, plaintiff had his doctor appear as an expert to testify that plaintiff's disability was a result of the car accident in issue. Id. Two years after the accident, however, the doctor supplied information on a benefits application to the Social Security Administration, stating plaintiff suffered from severe diabetes and hypoglycemia, making no mention of the car accident. Id. The facts as such, we refused to address plaintiff's arguments on appeal because he had first introduced the subject matter at trial. We held that it was proper for defendant to "probe into the subject matter in cross-examination." Id. We reaffirmed this holding in Gigliotti v. Machuca, 409 Pa.Super. 50, 597 A.2d 655, 660-61 (1991).
¶ 3 In this factually analogous case, counsel for appellants placed the subject of Mr. Nigra's heart condition in issue at the start of trial. Appellants' counsel raised Mr. Nigra's heart condition in opening statements, N.T., 1/25/01, at 7; the direct examination of Mrs. Nigra, N.T., 1/25/01, at 38-39; and the direct examination of Mr. Nigra, N.T., 1/25/01, at 136-139. I believe that once appellants raised the issue on direct examination, appellee was justified in probing the issue on cross-examination. Collins, supra. Probing the issue effectively included Mr. Nigra's application for social security benefits, and the statements made within. Mr. Nigra claimed as a result of this accident he suffered "severe and disabling injuries" causing him "great" financial detriment. Nigra Complaint ¶¶ 7, 9. Appellee's counsel, through cross-examination, attempted to show that Mr. Nigra's disabilities were not solely the result of injuries suffered in the accident sub judice. Appellants' attempt to discount the severity of Mr. Nigra's heart condition on direct examination was properly impeached by appellee on cross-examination. I must, therefore, respectfully dissent to the majority's finding that appellee's cross-examination was improper and that appellants are entitled to a new trial.
¶ 4 I do, however, concur with the majority in the result reached on the second issue raised by appellants; the prejudicial effect of the doctor's testimony outweighed its probative value.
NOTES
[*] Retired Justice assigned to Superior Court.
[1] We will refer only to Robert Nigra as Appellant even though Kathleen Nigra is also an appellant in this case. Kathleen's loss of consortium claim is purely derivative.
[2] Although Appellant purportedly appealed from the May 3, 2001 order of the trial court, the appeal properly lies from the August 1, 2001 judgment.
[3] Outside the presence of the jury Appellee's counsel stated the following to the trial court:
I'm not raising the Social Security because I want a setoff from them. They're just to indicate to the Court and the jury that the plaintiff [Appellant] did make a Social Security application. He said certain things in those certain Social Security applications that really bare [sic] on this case and what his injuries are, what his disabilities are.
And if I understand the claims, he says he's disabled as a consequence of this accident by reason of his back condition. It's my position that he said other things to the Social Security Administration which do not support his claim for disability.
So, it's my belief and feeling that whatever he said to the Social Security Administration is relevant to this matter and the jury should hear it....
N.T., 1/26/2001, at 148.
[4] The alleged inconsistencies could have been easily established by asking Appellant about his applications to a government agency and whether his statements in those applications are true. Appellant could then be questioned regarding the specific instances of inconsistent statements contained in the applications as well as how these statements contradict or are inconsistent with Appellant's position and statements at trial. This could have been done without revealing the governmental agency to which Appellant applied and without revealing the result of these applications.
[5] Although Kathleen helped Appellant to complete the applications, this fact could have been established without revealing that Appellant's application came to fruition; i.e, that he finally began to receive social security benefits. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537340/ | 27 B.R. 751 (1983)
In re Konrad Wolff REICHURDT, f/k/a Jody Gervais Gianetto, wwi Erika D'Albert Reichurdt, and the marital community composed thereof, Debtor.
Konrad Wolff REICHURDT, f/k/a Jody Gervais Gianetto, Plaintiff,
v.
Linda CERBELLO, f/k/a Linda Gianetto; and Seattle Bonded, Inc., Defendants.
Bankruptcy No. 81-02218T, Adv. No. A82-0425.
United States Bankruptcy Court, W.D. Washington.
February 15, 1983.
Richard Paroutaud, Chehalis, Wash., for plaintiff/debtor.
Joseph R. Burns, Seattle, Wash., for defendants.
DECISION ON DISCHARGEABILITY OF SUPPORT OBLIGATION AND PERMANENT INJUNCTION
ROBERT W. SKIDMORE, Bankruptcy Judge.
This matter came on regularly on debtor's Motion for Order to Show Cause for issuance of a Preliminary Injunction to enjoin the defendants' Writ of Garnishment. Richard Paroutaud appeared on behalf of plaintiff/debtor and Joseph R. Burns appeared on behalf of defendants.
The plaintiff seeks a Permanent Injunction enjoining the defendants Linda Cerbello *752 and Seattle Bonded, Inc. from making efforts to collect on a judgment for back child support entered in King County Superior Court. The parties have submitted this matter on facts admitted in their Pretrial Order and Memoranda of Authorities.
Plaintiff Konrad Reichurdt and defendant Linda Cerbello were divorced by a decree entered on May 18, 1967 in King County Superior Court Cause No. 666-512. The terms of the decree provided that plaintiff was required to pay the defendant child support for the parties' two minor children in the amount of $75.00 per child per month.
On October 23, 1979, defendant Linda Cerbello executed a document entitled "Assignment of Back Child Support" in favor of Seattle Bonded, Inc. The assignment provided:
. . . Linda Gionetto Cerbello does hereby assign and transfer together with all her right, title and interest therein in Back Child Support Judgment case No. [666-512] in the amount of $22,200.00 plus interest to Seattle Bonded, Inc. hereafter known as assignee. Assignee hereby is granted full power to collect, compromise, sue for and discharge same. . . . Costs, court costs and interest shall be retained by Assignee. The standard fee shall be 50%. The fee applies whether judgment debtor pays Assignor or Assignee. Should Assignor wish to cancel this assignment anytime after work has been performed to initiate collection, Assignor does hereby agree to pay Assignee $11,100.00 for said cancellation. That said cancellation must be with approval of Assignee in writing. . . .
On February 9, 1981, an agreed judgment in the amount of $11,000.00 was entered against plaintiff in favor of "Linda Gianetto now Linda Cerbello and Seattle Bonded, Inc., assignee of Linda Cerbello."
The plaintiff herein filed a Petition for Relief under Chapter 7 of the Bankruptcy Code on December 7, 1981. In his petition the plaintiff listed Linda Cerbello and Seattle Bonded, Inc. as creditors, indicating the $11,000.00 judgment as a debt. On April 15, 1982, Konrad Reichurdt was granted a discharge.
Subsequently a document entitled "Assignment" was filed in King County Superior Court cause No. 666-512 on June 8, 1982 which provided that Seattle Bonded, Inc. ". . . do[es] hereby assign to Linda Cerbello all right, title and interest in [the] above captioned case that Seattle Bonded, Inc. may have."
The issue presented is whether defendant Linda Cerbello's child support obligation was ". . . assigned to another entity voluntarily, by operation of law or otherwise . . ." pursuant to 11 U.S.C. § 523(a)(5).
The legislative history of the dischargeability of child support indicates that three definite changes in the statute have occurred in the last six years. On January 4, 1975, 42 U.S.C. 656(b) was adopted which provided that child support assigned to the states pursuant to federal statute was nondischargeable in the same manner as direct payment of child support. Later this provision was repealed by the Bankruptcy Reform Act of 1978 on November 6, 1978. As originally enacted, 11 U.S.C. § 523(a)(5)(A) stated that child support would be dischargeable to the extent that it was ". . . assigned to another entity, voluntarily, by operation of law, or otherwise."
Most recently 42 U.S.C. § 656(b) was readopted by § 2334 of P.L. 97-35, effective August 13, 1981. The new statute reads:
A debt which is a child support obligation to a state under Section 402(a)(26) is not released by a discharge in bankruptcy under Title 11, United States Code.
In conjunction with the readoption of 42 U.S.C. § 656(b), 11 U.S.C. § 523(a)(5)(A) was amended to state:
(a) A discharge under section 727, 1141, or 1328(b) of this title does not discharge an individual debtor from any debt
(5) to a spouse, former spouse, or child of the debtor, for alimony to, maintenance for, or support of such spouse or child, in connection with a separation agreement, divorce decree, or property settlement agreement, but not to the extent that
*753 (A) such debt is assigned to another entity, voluntarily, by operation of law, or otherwise (other than debts assigned pursuant to section 402(a)(26) of the Social Security Act).
The public policy in favor of the debtor's former spouse and children is only afforded where said parties derive a direct benefit from alimony, child support or maintenance.
Paragraph (5) of 11 U.S.C. § 523(a) excepts from discharge debts to a spouse, a former spouse or child of the debtor for alimony to, maintenance for, or support of the spouse or child. This language in combination with the repeal of § 456(b) of the Social Security Act (42 U.S.C.S. § 656(b)) by § 328 of the Act of November 6, 1978, will apply to make nondischargeable only alimony, maintenance or support owed directly to a spouse or dependent. The purpose of this limitation is to prevent persons other than the debtor's and children from obtaining this privileged status. 3 Bkr.L.Ed.Code Commentary and Analysis, § 22.34, p. 53.
See also H.Rep. No. 95-595, p. 364, U.S. Code Cong. & Admin.News 1978, pp. 5787, 6320, Bkr.L.Ed. Legislative History § 82.17.
This court previously held that a child support debt which has been assigned to the state for collection purposes only is not in the nature of a true assignment but ". . . merely facilitates the custodial parent's enforcement of child support rights without transferring their beneficial right to receive child support. Matter of Beggin, 19 B.R. 759, 761 (Bkrtcy.1982)." Similarly, other courts have found payments directed through the Clerk of the Court, In Re Sturgell, 7 B.R. 59, CCH Bankruptcy Reporter ¶ 67,701 (Bkrtcy.1980), In Re Gilbert, 10 B.R. 462 (Bkrtcy.1981), and assignment of child support rights to a law firm for collection purposes, In Re Deblock, 11 B.R. 51 (Bkrtcy.1981) not to be in the nature of true assignment.
The prevailing definition of a true assignment is as follows:
A legal assignment is a transfer or setting over of property, or of some right or interest therein, from one person to another, and unless in some way qualified, it is properly the transfer of one's whole interest in an estate, or chattel, or other thing. It is the act by which one person transfers to another, or causes to vest in another, his right of property or interest therein. But to effect a legal assignment, there must be evidence of intent to assign or transfer the whole or part of a specific thing, debt, or chose in action, and the subject matter should be sufficiently described to make it capable of being identified. 6 Am Jr 2d Assignments, § 1, p. 185.
The operative document entitled "Assignment of Back Child Support" appears to be in the nature of a true assignment. A definite property interest in the obligation assigned vested in Seattle Bonded, Inc. upon the execution of the assignment. That 50% interest in the back support would inure to the collection agency even in the event the assignee would cancel the assignment at a later time. This reflects more than an intent to make a mere assignment for collection purposes only. It was intended to be a true assignment.
The defendants argue that even if the parties' original agreement is construed to be a true assignment, the subsequent "Assignment" back to Linda Cerbello, filed in King County Superior Court Cause No. 666-512 on June 8, 1982 restored to her any rights she may have previously conveyed to Seattle Bonded, Inc. The court cannot agree with the defendant's assertion given the language of 11 U.S.C. § 523(a)(5)(A). The statute already states that the exception to discharge will be allowed as long as the support obligation is not ". . . assigned to another entity, voluntarily, by operation of law or otherwise. . . ." Once the debt is assigned, the privileged party's status is altered, the purpose for the exception falls, and any right to an exception to discharge under § 523(a)(5)A) is effectively waived. The defendant's attempt to resurrect the exception to discharge after the fact, by execution of the subsequent document, must fail in light of the underlying policy *754 that exceptions to discharge must be narrowly construed in favor of the debtor. In Re Stewart, 10 B.R. 214, 216, (Bkrtcy.1981); In Re Harlan, 7 B.R. 83, 85 (1980); In Re Nichols, 6 B.R. 842, 845, (Bkrtcy.1980); 3 Collier on Bankruptcy, § 523.05A, p. 523-14 (15th ed. 1982). Therefore, it is
ORDERED, ADJUDGED AND DECREED that defendants' debt is dischargeable in the bankruptcy proceeding herein and the plaintiff shall be afforded protection of the permanent injunction relief set forth in 11 U.S.C. § 524; and it is further
ORDERED that this decision shall constitute Findings of Fact and Conclusions of Law as required by Rule 782 of the Federal Rules of Bankruptcy Procedure; and it is further
ORDERED that the attorney for the plaintiff prepare a judgment in accordance with this decision and note said judgment for presentation within ten days of the issuance of this decision. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537347/ | 27 B.R. 644 (1982)
In re Ronald Lavern SCHUCK, Debtor,
Bonnie L. ECK, Plaintiff,
v.
Ronald Lavern SCHUCK, Defendant.
Bankruptcy No. BK 5-79-00936, Adv. No. 5-80-0014.
United States Bankruptcy Court, M.D. Pennsylvania.
April 30, 1982.
William Carlucci, Williamsport, Pa., for plaintiff Bonnie L. Eck.
Ambrose Campana, Williamsport, Pa., for debtor.
OPINION AND ORDER
THOMAS C. GIBBONS, Bankruptcy Judge:
The plaintiff, a creditor of the above captioned Chapter 7 debtor, commenced this proceeding for a determination that the debtor's debt to her is nondischargeable under § 523(a)(6) of the Bankruptcy Code. Section 523(a)(6) states that a Chapter 7 discharge will not discharge an individual debtor from any debt for willful and malicious injury.
FINDINGS OF FACT
1. The plaintiff and the debtor were married on May 8, 1971.
2. The plaintiff purchased a mobile home on April 14, 1976. The home was titled in the name of the plaintiff.
3. The plaintiff separated from the debtor on April 30, 1978.
4. Immediately prior to the time of the separation the plaintiff and the debtor were residing in the mobile home. Following April 30, 1978, the plaintiff vacated and left the debtor in possession of the premises.
5. Upon vacating the mobile home the plaintiff left behind numerous articles of personal property.
6. The plaintiff first returned to the home on June 1, 1978. She found that substantial damage had been done to the home and her personal possessions.
7. The plaintiff commenced a civil action against the debtor in the Court of Common Pleas of Lycoming County for trespass to chattels.
*645 8. A court appointed panel of arbitrators entered judgment against the debtor and fixed the extent of the damage done by the debtor at $1,590.00.
9. The debtor filed a petition under Chapter 7 of the Bankruptcy Code on December 10, 1979.
10. The debtor willfully and maliciously damaged the mobile home and its contents.
DISCUSSION
Insofar as it relates to this proceeding, § 523(a)(6) of the Bankruptcy Code states that a discharge received under Chapter 7 does not discharge an individual debtor from any debt "for willful and malicious injury by the debtor to another entity or to the property of another entity." The meaning of the key phrase "willful and malicious injury" has been summarized as follows:
In order to fall within the exception of section 523(a)(6), the injury to an entity or property must have been willful and malicious. An injury to an entity or property may be a malicious injury within this provision if it was wrongful and without just cause or excessive, even in the absence of personal hatred, spite or ill-will. The word "willful" means "deliberate or intentional", a deliberate and intentional act which necessarily leads to injury. Therefore, a wrongful act done intentionally, which necessarily produces harm and is without just cause or excuse, may constitute a willful and malicious injury. (Footnotes omitted.)
3 Collier on Bankruptcy ¶ 523.16(1) (15th ed. 1979). This view is supported by the legislative history of the Bankruptcy Code and the case law. See, e.g., H.R.Rep. No. 95-595, 95th Cong., 1st Sess. 365 (1977); S.Rep. No. 95-989, 95th Cong., 2d Sess. 79 (1978), U.S.Code Cong. & Admin.News 1978, p. 5787; Farmers Bank v. McCloud (In Re McCloud), 7 B.R. 819 (Bkrtcy.M.D.Tenn. 1980); Borg-Warner Acceptance Corporation v. Simmons (In Re Simmons), 9 B.R. 62 (Bkrtcy.S.D.Fla.1981); Credithrift of America v. Auvenshine (In Re Auvenshine), 9 B.R. 772 (Bkrtcy.W.D.Mich.1981); Meneley Motors, Inc. v. Giantvalley (In Re Giantvalley), 14 B.R. 457 (Bkrtcy.D.Nev.1981).[1]
In support of her position the plaintiff relied heavily upon the arbitrators award of judgment. Apparently, this award was not accompanied by any findings of fact. The grant of this judgment does not end our inquiry into the dischargeability of the debt since the Bankruptcy Court has the obligation to look behind such a judgment. Brown v. Felsen, 442 U.S. 127, 99 S. Ct. 2205, 60 L. Ed. 2d 767 (1979). In Brown, supra, the Court held that a Bankruptcy Court was not confined to a review of the judgment and record in the prior state court proceedings when considering the dischargeability of a debt. Consequently, an independent determination of the nature of the debtor's alleged acts must be undertaken by this Court.
At trial the plaintiff clearly established that the debtor intentionally damaged the trailer and its contents. The debtor presented no evidence which would justify his actions. We therefore find that the debtor willfully and maliciously damaged the plaintiff's property. Since neither party introduced evidence controverting the value fixed by the panel of arbitrators for the damage done to the mobile home and its contents, we adopt that figure as an accurate representation of the extent of the plaintiff's damages.
CONCLUSION OF LAW
Since the plaintiff met her burden of proving that the debtor willfully and maliciously damaged her mobile home and its contents, the debtor's $1,590.00 obligation to her for the damage incurred is to be determined nondischargeable under § 523(a)(6) of the Bankruptcy Code.
NOTES
[1] We decline to follow the alternate line of authority that requires a showing of specific malice or intent to do harm for a determination of nondischargeability under § 523(a)(6). See, e.g., Liberty National Bank & Trust Company v. Hawkins (In re Hawkins), 6 B.R. 97 (Bkrtcy. W.D.Ky.1980). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537365/ | 27 B.R. 529 (1983)
In re LIPMAN BROTHERS, INC., Debtor.
LIPMAN BROTHERS, INC., Plaintiff,
v.
Frank LIPMAN, Harold Lipman, Bernard Lipman, Anna Lipman, and Dirigo Bank and Trust Company, Defendants.
Bankruptcy No. 82-969-HL, Adv. No. A82-1205.
United States Bankruptcy Court, D. Massachusetts.
February 24, 1983.
Philip Heller, Sullivan & Worcester, Boston, Mass., for plaintiff.
Peter B. McGlynn, Richmond, Rosen, Crosson & Resnek, Boston, Mass., for Frank & Anna Lipman.
Michael A. Nelson, Jensen, Baird, Gardner & Henry, Portland, Me., for Harold Lipman.
Timothy J. Dacey, Hill & Barlow, Boston, Mass., for Bernard Lipman.
Benjamin Zuckerman, Verrill & Dana, Portland, Me., for Dirigo Bank & Trust Co.
MEMORANDUM ON MOTIONS TO DISMISS
HAROLD LAVIEN, Bankruptcy Judge.
The defendants in this proceeding, Harold Lipman, Bernard Lipman, Frank and Anna Lipman, and the Dirigo Bank and Trust Company, have all filed motions to dismiss the complaint against them. The complaint seeks recovery basically three on grounds, for money owed, recovery of insider preferences, and fraudulent conveyances. All four motions to dismiss were briefed and argued. All four motions are based on the Court's lack of jurisdiction as a result of the Supreme Court's decision in Northern Pipeline Construction Company v. Marathon Pipe Line Company, ___ U.S. ___, 102 S. Ct. 2858, 73 L. Ed. 2d 598 (1982) and Congress' inaction in response thereto. At oral argument, counsel also argued the unconstitutionality of the District Court's emergency bankruptcy rule.[1]
As a result of the Supreme Court's decision in Northern Pipeline Construction Co. v. Marathon Pipe Line Co., ___ U.S. ___, 102 S. Ct. 2858, 73 L. Ed. 2d 598 (1982) invalidating the entire jurisdiction grant of the Bankruptcy Reform Act of 1978, Pub.L. No. 95-598 § 241(a), 92 Stat. 2549, 2668 (1978) and the failure of Congress to act, neither this Court nor I as one of its judges may *530 well have any existence or jurisdiction independent of the District Court's Rule of December 23, 1982. As an arm of the District Court, like any agent, I cannot create my own authority and at most would only have that power which is delegated to me and that does not include the power to pass on the validity of the orders of the District Court. After Marathon, I can only conclude that the constitutionality of this Emergency Rule can only be decided by an Article III court.[2] Any challenge to that order must be addressed to the District Court or, if appropriate, to the proper appellate court. Until the order of December 23, 1982 is altered by some proper authority, or in keeping with the said order, proceedings referred to me are stayed or removed, I am bound by that order and therefore, I will proceed in accordance with that order to hear the matters before me.
The motions to dismiss are denied.
The parties will submit a discovery schedule and recommended trial date within 20 days.
NOTES
[1] Bernard Lipman also had added the ground of lack of personal jurisdiction due to improper service but that objection was withdrawn now that post-December 24th proper service has been made.
[2] While certainly not conclusive, the Supreme Court's cryptic denial of the petition for Writs of Prohibition and Mandamus in In re Keene Corporation, GAF Corporation and Pacor, Inc., ___ U.S. ___, 103 S. Ct. 1237, 74 L. Ed. 2d ___, Petitioners, (related to the Manville Corporation Chapter 11 bankruptcy in the Southern District of New York) filed with the Supreme Court in January of 1983, would at least indicate that the court did not consider the continual operation of the Bankruptcy Court under the emergency rule so egregious as to require it to grant this extraordinary relief. Counsel reported that the request for mandamus had been denied without any further comment by the Supreme Court on Tuesday, February 22, 1983. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537441/ | 797 A.2d 309 (2002)
Lillie BORGER, Individually and as Executrix of the Estate of Morris Borger
v.
George F. MURPHY, M.D., Theodore Matulewicz, M.D., Harvey Passman, M.D., and John Farrell, M.D.
Appeal of: Lillie Borger
Superior Court of Pennsylvania.
Argued January 16, 2002.
Filed April 3, 2002.
*310 Richard P. Abraham, Philadelphia, for appellant.
Gregory S. Nesbitt, Philadelphia, Allentown, for Farrell, appellee.
Terence Pitt, Blue Bell, for Passman, appellee.
Before: HUDOCK, KLEIN and BECK, JJ.
HUDOCK, J:.
¶ 1 This is an appeal from an interlocutory order appealable as of right transferring venue from Philadelphia County to *311 Lehigh County. See Pa.R.A.P. 311(c) (changes of venue). We affirm.
¶ 2 Morris Borger went to the office of John Farrell, M.D., and Harvey Passman, D.O., on September 1, 1995, for treatment of a mole on his back. Dr. Passman removed some, but not all, of the tissue and sent it to Theodore Matulewicz, M.D., for analysis. Dr. Matulewicz was uncertain of the diagnosis and sent the tissue to George Murphy, M.D. Dr. Murphy recommended the complete removal of the affected area. However, his recommendation was not followed by Drs. Farrell and Passman.
¶ 3 On September 10, 1996, Mr. Borger returned to the medical office of Drs. Farrell and Passman. At that time, Dr. Farrell allegedly removed a sebaceous cyst from the same area of Mr. Borger's back where the mole had been removed. Dr. Farrell discarded the cyst without pathological examination. On March 12, 1997, Mr. Borger returned to the same medical office to have two more cysts removed. The tissue was sent to Dr. Matulewicz, who diagnosed malignant metastic melanoma. Mr. Borger later received treatment from a melanoma specialist in Philadelphia County, David Berd, M.D.
¶ 4 Mr. Borger and Lillie Borger, his wife, commenced a medical malpractice action against Drs. George Murphy, Theodore Matulewicz, Harvey Passman, and John Farrell (Appellees) by filing a writ of summons in Philadelphia County on March 5, 1999. Venue in Philadelphia County was based on the fact that Drs. Murphy and Matulewicz were residents of Philadelphia County at the time the suit was commenced. No allegations of medical malpractice were made against Dr. Berd, but he was listed as a potential trial witness by the Borgers. On July 9, 1999, Mr. Borger died from metastasis of the malignant melanoma to his brain. Lillie Borger, Appellant, now maintains this suit individually and as executrix of the estate of her husband.
¶ 5 On February 26, 2001, Dr. Farrell filed a petition to transfer venue. Dr. Farrell based his venue challenge on the contention that venue in Philadelphia County was inconvenient under Rule 1006(d)(1), in that it was oppressive and vexatious. Dr. Farrell did not argue that Philadelphia County was an improper forum in which to bring the case.
¶ 6 The trial court granted an uncontested motion for summary judgment in favor of Dr. Murphy on March 6, 2001. Dr. Matulewicz subsequently was dismissed from the suit by stipulation of all the parties. On April 9, 2001, the trial court granted Dr. Farrell's motion to transfer venue from Philadelphia County to Lehigh County. Appellant filed a timely notice of appeal on May 4, 2001.
¶ 7 Appellant raises the following issues for our review:
A. WHETHER THE TRIAL COURT COMMITTED AN ABUSE OF DISCRETION IN TRANSFERRING VENUE BASED ON FORUM NON CONVENIENS TO LEHIGH COUNTY, WHERE:
1. DEFENDANT DID NOT SUSTAIN ITS BURDEN OF PROVING [THAT] TRIAL IN PLAINTIFF'S CHOSEN FORUM WOULD BE VEXATIOUS OR OPPRESSIVE;
2. A CHANGE OF VENUE WAS GRANTED THREE DAYS BEFORE JURY SELECTION;
3. THERE WAS NO EVIDENCE THAT VENUE WAS CHOSEN TO HARASS THE DEFENDANTS?
Appellant's Brief at 4. Appellant argues that under Pennsylvania Rule of Civil Procedure 1106(e), Appellees had to assert a challenge to improper venue by preliminary objections and failed to do so, thereby *312 waiving the claim. However, Appellees did not seek a transfer of venue on the basis that venue was improper in Philadelphia County, but rather that it was inconvenient, pursuant to Pennsylvania Rule of Civil Procedure 1006(d). The applicable Rule allows parties to raise the issue of inconvenient venue by petition. Pa.R.C.P. 1006(d). The trial court transferred venue for reasons of forum non conveniens pursuant to Rule 1006(d), not because Philadelphia County was an improper forum.
¶ 8 A trial court's ruling on venue will not be disturbed if the decision is reasonable in light of the facts. Mathues v. Tim-Bar Corp., 438 Pa.Super. 231, 652 A.2d 349, 351 (1994). A decision to transfer venue will not be reversed unless the trial court abused its discretion. Id. A plaintiff's choice of forum is given great weight, and the burden is on the party challenging that choice to show it is improper. Masel v. Glassman, 456 Pa.Super. 41, 689 A.2d 314, 316 (1997). "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." Pa.R.C.P. 1006(d)(1). A petition to transfer venue on this basis should not be granted unless the party seeking to transfer venue meets its burden of showing that venue in the chosen forum is oppressive or vexatious. Hoose v. Jefferson Home Health Care, Inc., 754 A.2d 1 (Pa.Super.2000), appeal denied, 564 Pa. 734, 766 A.2d 1249 (2001); see also Cheeseman v. Lethal Exterminator, Inc., 549 Pa. 200, 213, 701 A.2d 156, 162 (1997) (explaining that a petition to transfer venue on grounds of forum non coveniens should not be granted unless the defendant meets its burden of demonstrating with detailed information on the record that the plaintiff's chosen forum is oppressive or vexatious to him). As this Court stated in Hoose:
The defendant may meet its burden of showing that the plaintiff's choice of forum is vexatious to him by establishing with facts on the record that the plaintiff's choice of forum was designed to harass the defendant, even at some inconvenience to the plaintiff himself. Alternatively, the defendant may meet his burden by establishing on the record that the chosen forum is oppressive to him; for instance, that trial in another county would provide easier access to witnesses or other sources of proof, or the ability to conduct a view of premises involved in the dispute. But, we stress that the defendant must show more than that the chosen forum is merely inconvenient to him.
Hoose, 754 A.2d at 3 (emphasis omitted). Claims by a defendant that no significant aspect of a case involves the chosen forum, and that another forum would be more convenient, are not the type of record evidence that proves that litigating the case in the chosen forum is oppressive or vexatious. Id., 754 A.2d at 4. There is a vast difference between a finding of inconvenience and one of oppressiveness. Id., 754 A.2d at 5.
¶ 9 Appellant argues that Dr. Farrell did not sustain his burden of proving that trial in Philadelphia County would be oppressive or vexatious. In support of his petition to transfer venue, Dr. Farrell relied on the deposition testimony of Appellant, who stated that all of the witnesses who could testify as to damages were located in Lehigh County. Dr. Farrell also indicated in a sworn affidavit that trial in Philadelphia County would burden his participation in his medical practice in Lehigh County. He testified in a deposition that he would have to travel eighty miles each way between Lehigh County and the site of the trial if the case were heard in Philadelphia County. The commute to *313 Philadelphia County would take an hour and a half, compared to the twenty minutes for a trip to the courthouse in Lehigh County. The time required for travel would make it necessary for him to stay in Philadelphia County, or at least greatly curtail his ability to see patients in Lehigh County before and after court sessions. He indicated that many of the employees in his office, although not specifically named in his pre-trial memorandum, were potential witnesses and that attending trial in Philadelphia County would lead to a temporary closing of the office.
¶ 10 Dr. Farrell also cited the testimony of Dr. Passman, who testified in a deposition that while the courthouse in Lehigh County was only twenty minutes from his office, Dr. Passman would have to travel two hours each way for trial in Philadelphia. After a review of the record, it is clear that Dr. Farrell presented detailed evidence that it would be oppressive for Appellees and their witnesses to travel to Philadelphia County for trial. We conclude that the trial court did not abuse its discretion when it concluded that venue in Philadelphia County was not merely inconvenient, but was so oppressive as to require transfer of venue.
¶ 11 Appellant next maintains that the timing of the trial court's transfer of venue was an abuse of discretion, in that the case was transferred three days before trial. Appellant cites Greenfeig v. Seven Springs Farm, 416 Pa.Super. 580, 611 A.2d 767 (1992), in support of this contention. In Greenfeig, the trial court transferred venue sua sponte after the jury had been selected and minutes before the trial was to begin. This Court found that the trial court had abused its discretion and reversed. We determined in Greenfeig that the transfer of venue was improper in absence of both a petition and evidence that it would be more convenient for the parties or witnesses to litigate in the new forum. Greenfeig, 611 A.2d at 769-70. In contrast, in the present case, Dr. Farrell filed a petition to transfer venue and supported the petition with evidence concerning the convenience of litigating in the potential forums. The other case cited by Appellant in support of her argument on this issue, Goodman v. Pizzutillo, 452 Pa.Super. 436, 682 A.2d 363 (1996), involved a dismissal of a case sua sponte on the basis of forum non conveniens after six years of discovery and pre-trial preparation in the original forum. Both Greenfeig and Goodman involved sua sponte transfers of venue by the trial court and were, therefore, quite different from the circumstances in this case. The trial court in the present case transferred venue in response to a petition several days before the trial was scheduled to begin. We find that the trial court did not abuse its discretion by granting the motion to transfer venue when it did.
¶ 12 Appellant's final contention is that the trial court abused its discretion when it transferred venue because there was no evidence that the choice of forum was designed to harass Appellees. A defendant can support a petition to transfer venue by showing either that a forum is oppressive or, alternatively, that it is vexatious. See Hoose, supra. As indicated above, the record supports the trial court's conclusion that venue in Philadelphia County would be oppressive. The trial judge, therefore, had a sufficient basis to transfer venue under the standard set forth in Cheeseman and Hoose. We therefore affirm the decision of the trial judge to transfer venue to Lehigh County.
¶ 13 Order affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537515/ | 355 A.2d 563 (1976)
AMERICAN CENTURY MORTGAGE INVESTORS, Appellant,
v.
UNIONAMERICA MORTGAGE AND EQUITY TRUST et al., Appellees.
Nos. 9446, 9630.
District of Columbia Court of Appeals.
Argued January 7, 1976.
Decided April 13, 1976.
*564 Samuel Intrater, Washington, D.C., with whom Albert Brick, Washington, D.C., was on the brief, for appellant.
Alvin Friedman and Richard S. Arfa, with whom Richard J. Medalie and William B. Beebe, Washington, D.C., were on the brief, for appellees. Irving B. Yochelson, Washington, D.C., also filed an appearance.
Before FICKLING and KERN, Associate Judges, and PAIR, Associate Judge, Retired.
KERN, Associate Judge:
Appellant American Century Mortgage Investors [ACMI] appeals from the entry of two orders granting summary judgment in favor of appellees. The first order, entered February 3, 1975, decreed that appellees' liens were superior and prior to appellant's lien on the subject property, 425 Eye Street, N.W., located at lot 57, square 516 in the District of Columbia. The second order, entered April 11, 1975, granted appellees' motion for summary judgment declaring that the foreclosure sale of the subject property was valid and proper and denied appellant's motion to invalidate the sale.[1]
On June 24, 1971, ACMI loaned $1.5 million to the Chester Arthur Corporation to enable it to purchase the subject property, and to secure the loan ACMI received a deed of trust that was duly recorded the next day.[2] Sometime later, Chester Arthur applied to the Royal National Bank [Royal] for a $9.4 million construction loan. Royal agreed to lend this money on two conditions: (1) that Royal's loan be secured *565 by the first lien on the property and (2) that ACMI's deed of trust be subordinate to Royal's deed of trust. On October 8, 1971, an agreement was entered into between inter alia ACMI and Royal, which stated that the ACMI deed of trust was coordinate and equal to the Royal deed of trust, except as otherwise provided. Paragraph three of the agreement did provide otherwise, for it stated that the ACMI deed was to be subordinate upon maturity; that is, in the event of default the Royal deed was to be paramount and superior.
In the summer of 1972, Chester Arthur defaulted on the Royal loan after $5.4 million had been advanced. The lenders all agreed to forebear from foreclosure and to enter an agreement with 425 Eye Street Associates [Associates], Chester Arthur's successor. An additional $3.8 million was to be loaned by Girard Bank of Philadelphia [Girard], and a second coordinate lien agreement was executed. This second agreement was substantially identical to the first, except that ACMI's deed of trust was subordinated at maturity to both the Royal and Girard deeds of trust.
In 1973, Associates defaulted on its obligations and in July, 1974, Unionamerica Mortgage and Equity Trust [UMET], successor to Royal and Girard, filed notice of intent to sell the property at a foreclosure sale. On August 7, 1974, appellant sued UMET, Associates, and others, claiming that the first coordinate loan agreement was invalid for lack of consideration and that consequently its deed of trust had priority. The property was sold, after public notice, at a foreclosure sale on August 26, 1974, for $4.6 million.
In its order of February 3, 1975, the trial court ruled that ACMI was estopped from challenging the validity of the first coordinate lien agreement, since ACMI induced Royal to loan $9.4 million to Chester Arthur by agreeing to allow Royal's lien to take precedence over the existing ACMI lien. The elements of a claim of equitable estoppel were described in Parker v. Sager, 85 U.S.App.D.C. 4, 8, 174 F.2d 657, 661 (1949). With reference to the party to be estopped, the elements are:
(1) Conduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intention, or at least expectation, that such conduct shall be acted upon by the other party; (3) knowledge, actual or constructive, of the real facts. As related to the party claiming the estoppel, they are: (1) Lack of knowledge and of the means of knowledge of the truth as to the facts in question; (2) reliance upon the conduct of the party estopped; and (3) action based thereon of such a character as to change his position prejudicially. [Id. quoting 19 Am.Jur.Estoppel § 42.]
There was evidence introduced at the hearing on appellees' motion for summary judgment indicating that ACMI knew that Royal would not lend money for construction of a building on the subject property unless Royal received a first lien on the property. The contract of October 8, 1971, itself stated this condition and there was evidence in the record to this effect in the form of letters and statements by employees of the parties on both sides of the litigation. The evidence thus adduced showed by a clear preponderance that ACMI's agreement to subordinate its lien served as an inducement to Royal to lend funds for construction, and that Royal relied on this inducement to its detriment in making the loan to Chester Arthur, consequently, we are persuaded that the trial court did not err in concluding that ACMI was estopped from challenging the first contract for lack of consideration. See Solway Decorating Co. v. Merando, Inc., D.C.App., 264 A.2d 501 (1970); Parker v. Sager, supra; Goodman v. Dicker, 83 U. S.App.D.C. 353, 169 F.2d 684 (1948).
As to the second contract, which subordinated ACMI's lien to the interests *566 of both Royal and Girard, the trial court found that ACMI was also estopped from attacking the validity of this contract, and that alternatively there was actual consideration for the contract arising from appellees' foregoing their right to foreclose. As with the first contract, the evidence indicates that Girard was induced to lend construction money to Associates in reliance on ACMI's agreement to subordinate its lien to Royal and Girard. Since we agree that ACMI's conduct in entering the second contract estops it from attacking the validity of this contract also,[3] we need not determine whether appellees' forebearing from foreclosure constituted consideration for this second contract.
Since ACMI is estopped from challenging both agreements with Royal and Girard, the trial court correctly ruled that, pursuant to the agreements, their deeds of trust were prior in lien to that of ACMI. The total amount derived from the sale of the property, when credited against appellees' liens, was insufficient to satisfy these prior liens, and therefore appellant's lien was extinguished. See Rosslyn Steel & Cement Co. v. Etchison, 61 App.D.C. 43, 57 F.2d 409, cert. denied, 287 U.S. 614, 53 S. Ct. 17, 77 L. Ed. 534 (1932); D.C.Code 1973, § 45-617. As no genuine issue of material fact concerning this claim remained,[4] the award of summary judgment in favor of appellees was appropriate. Yates v. District Credit Clothing, Inc., D. C.App., 241 A.2d 596 (1968); Super.Ct. Civ.R. 56.
Appellant also claims that the trial court erred in refusing to invalidate the foreclosure sale. Specifically, ACMI alleges there were several irregularities in the conduct of the sale, including the facts that (1) the trustee was not a disinterested party but was a member of the law firm representing appellees, (2) prohibitive conditions were imposed in requiring prospective bidders to deposit one million dollars before being allowed to bid, and (3) minimal advertising was used.[5]
In granting appellees' second motion for summary judgment the trial court concluded that no genuine issue as to any material fact existed. The court relied on appellees' statement of material facts, which included the provisions in the deeds of trust in favor of Royal and Girard pursuant to which the foreclosure sale was held. Both agreements provided that upon default:
. . . the said Trustees or substitute trustees shall have the power and duty to sell . . . the aforesaid land and premises and improvements at public auction at such time and place, upon such terms and conditions, and after such previous public notice, . . . as the Trustees, or substitute trustees, shall deem best for the interest of all parties concerned . . ..
Both agreements also stated that:
The Trustees may act hereunder and may sell and convey said land and premises under power granted by this instrument, although the Trustees have been, may now be and may hereafter be, attorneys or agents of the holder of the Note secured hereby in respect to the loan made by the holder of the Note . . . or in respect to any matter of business whatsoever.
Since the foreclosure sale was conducted in accordance with the terms of the *567 deeds of trust authorizing such sale, and since D.C.Code 1973, § 45-615 allows the parties to prescribe "the length of notice and terms of sale," see S & G Investment Inc. v. Home Federal Savings & Loan Ass'n, 164 U.S.App.D.C. 263, 505 F.2d 370 (1974), we cannot conclude that the trial court erred in granting appellees' motion for summary judgment declaring the sale valid and proper and in denying appellant's motion to invalidate the sale on these grounds.
Affirmed.
NOTES
[1] On August 26, 1974, a different judge had denied a motion made by appellant in its complaint filed August 7, 1974, requesting that a receiver be appointed by the court to manage the property pendente lite, that the foreclosure sale be enjoined, and that the trustee of the property be removed. Appellant apparently does not contest this ruling.
[2] See D.C.Code 1973, § 45-601.
[3] See Solway Decorating Co. v. Merando, Inc., supra; Parker v. Sager, supra; Goodman v. Dicker, supra.
[4] ACMI persistently asserts that both coordinate loan agreements were ambiguous on their faces and in need of judicial construction, and hence that summary judgment could not be entered. As we have stated above, we are satisfied that these agreements clearly stated the purposes of the parties and established the priorities between them.
[5] We note that the advertising used in the instant case, publication on five separate days in the Washington STAR, was the exact method approved by the Court of Appeals for the District of Columbia Circuit in S & G Investment Inc. v. Home Federal Savings & Loan Ass'n, 164 U.S.App.D.C. 263, 505 F.2d 370 (1974). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537551/ | 167 Conn. 100 (1974)
ELLEN HILLIER
v.
CITY OF EAST HARTFORD
Supreme Court of Connecticut.
Argued June 7, 1974.
Decision released August 13, 1974.
HOUSE, C. J., SHAPIRO, LOISELLE, MACDONALD and BOGDANSKI, JS.
*101 James A. Kane, Jr., assistant corporation counsel, for the appellant (defendant).
D. Michael Hurley, with whom, on the brief, were Leon RisCassi and William R. Davis, for the appellee (plaintiff).
MACDONALD, J.
This appeal arises out of an action brought against the town of East Hartford under § 13a-149 of the General Statutes to recover damages for injuries sustained by the plaintiff, Ellen Hillier, as a result of her fall on an icy sidewalk. From a judgment for the plaintiff, rendered after a jury verdict in her favor, the defendant has appealed on the limited ground that the trial court erred in refusing to hold unconstitutional a special act of the legislature validating the plaintiff's notice *102 of the accident which was not received by the defendant until more than one year after the plaintiff's fall occurred.
The facts, which are not in dispute, disclose that the plaintiff, while walking on a public sidewalk in East Hartford on March 3, 1969, suffered personal injuries from a fall alleged to have been caused by a defective condition consisting of a sidewalk covered with ice and snow, a condition which, it was claimed, had existed for an unreasonable length of time. Although the complaint alleged that notice of the fall was given to the defendant, pursuant to § 13a-149, by a written notice dated March 3, 1969, a copy of which was attached to the complaint, it is uncontroverted that such notice was not actually received by the defendant until March 20, 1970.
Section 13a-149 of the General Statutes gives the right to any person injured by means of a defective road to recover damages from the party bound to keep it in repair, but expressly provides, in relevant part, that "no action for any such injury shall be maintained against any town, city, corporation or borough, unless written notice of such injury and a general description of the same, and of the cause thereof and of the time and place of its occurrence shall, ... if such defect consists of snow or ice or both, within thirty days thereafter, be given to a selectman or the clerk of such town, or to the clerk of such city or borough ... unless the action is commenced by complaint setting forth the injury and a general description of the same ... within the time limited for the giving of such notice...." The complaint in this case was dated February 9, 1970, almost a year after the plaintiff's fall.
*103 During the January, 1971, Special Session of the General Assembly, there was enacted into law Special Act No. 169 (Senate Bill No. 384) designated "An act concerning validation of notice given by Ellen Hillier and granting her permission to institute and prosecute to final effect a suit against the town of East Hartford," the full text of which bill appears in the footnote.[1] The trial court, over the objection of the defendant, admitted a copy of the special act into evidence, denied the defendant's motion for a directed verdict and denied its motion to set aside the verdict as against the law, overruling, in each case, the defendant's claim that Special Act No. 169 is unconstitutional as violative of article first, § 1, and article second of the constitution of the state of Connecticut and of § 1 of the fourteenth amendment to the United States constitution. In each instance the defendant duly excepted to the court's ruling and the sole issue raised by the three assignments of error not expressly abandoned by the defendant is whether the judgment rendered for the plaintiff should be reversed because the trial *104 court refused to rule Special Act No. 169 of the January, 1971, Special Session of the General Assembly unconstitutional.
"The liability, if any, of the defendant for the injuries sustained by the ... [plaintiff] is purely statutory. It rests upon the statute which imposes liability for an injury upon a highway upon the party bound to keep the highway in repair.... Wethersfield v. National Fire Ins. Co., 145 Conn. 368, 371, 143 A.2d 454; Hornyak v. Fairfield, 135 Conn. 619, 621, 67 A.2d 562; Bartram v. Sharon, 71 Conn. 686, 692, 43 A. 143." Burke v. West Hartford, 147 Conn. 149, 151, 157 A.2d 757. No right of action for such injuries exists at common law; Tuckel v. Argraves, 148 Conn. 355, 357, 170 A.2d 895; and no cause of action arises against the defendant in a case such as this until the statute creating it has been complied with. The plaintiff, in her brief, seeks to distinguish "between a special act which creates a right of action for one person only, and an act which merely restores, or revives a remedy already possessed by the plaintiff," claiming that "[h]ere the special act merely perfects the remedy, already available to the plaintiff, by extending the period for giving notice to the defendant municipality." (Emphasis added.) As a basis for this claim, reference is made to Tough v. Ives, 162 Conn. 274, 294 A.2d 67, more particularly to a statement (p. 294) where this court, distinguishing several cases cited in support of the validity of a special act, states: "Each of these cases involves a situation where at most the remedy, rather than the grounds of the action, was affected; where no right of the opposing party was affected; or where the state recognized an honorary obligation so that substanital *105 stantial justice could be realized. In the case at bar, the special act attempted to create a right, rather than a remedy, which is unrelated to any honorary obligation."
It appears to us that the foregoing language from Tough v. Ives, supra, tends to strengthen the position of the defendant on each of the three grounds for distinction mentioned therein. First, as to whether "the remedy, rather than the grounds of the action, was affected," it seems clear that the special act involved here was creative rather than curative. But even if viewed as a curative act, "[c]urative acts cannot cure a want of authority to act at all." Montgomery v. Branford, 107 Conn. 697, 705, 142 A. 574. In State v. Aetna Casualty & Surety Co., 138 Conn. 363, 84 A.2d 683, this court said, at page 367: "Accordingly, as our repeated decisions have determined, allegations and proof of the sixty days' notice required by the statute were a vital part of ... [the plaintiff's] case. `They go to the very existence of the action, which in the absence of compliance with the requirements of the statute does not exist at all. "Until such notice is given no right of action exists."...'" (Emphasis added.)
Similar language, tending to indicate that the very existence of the right in the first instance depends upon the giving of the required statutory notice, has been employed recently by our federal courts in interpreting the statute under consideration. "Giving of timely notice as prescribed by the said statute [§ 13a-149] is a condition precedent to the existence of a cause of action against the municipality; and the absence of such notice bars recovery *106 against the municipality as a matter of law." (Emphasis added.) Murray v. City of Milford, 256 F. Sup. 350 (D. Conn.), aff'd, 380 F.2d 468 (2d Cir.).[2]
The conclusion that the existence of a statutory right is conditioned upon compliance with the terms of the statute creating it is entirely consistent with the views we have expressed with relation to other types of rights created by statute. "The general rule is that where a statute gives a right of action which did not exist at common law, and fixes the time within which the right must be enforced, the time fixed is a limitation of condition attached to the rightit is a limitation of the liability itself as created, and not of the remedy alone." DeMartino v. Siemon, 90 Conn. 527, 528-29, 97 A. 765. We recently quoted the foregoing language with approval in Diamond National Corporation v. Dwelle, 164 Conn. 540, 325 A.2d 259, adding further (pp. 546-47): "Generally, `limitations on actions ... are considered procedural or personal and thus subject to waiver.... This is so because it is considered that the limitation merely acts as a bar to a remedy otherwise available.... Such is not considered to be the case, however, where a specific limitation is contained in the statute which establishes the remedy. Here the remedy exists only during the prescribed period and not thereafter.'" Although, as argued by the plaintiff, the Diamond National case involved the time limits on the validity *107 of a mechanic's lien under § 49-39 of the General Statutes rather than a validating act, the language is equally applicable to a situation where, as here, the remedy comes into existence only when the condition precedent imposed by the statute creating it has been complied with.
To return to the three grounds for supporting the validity of special acts, which grounds were mentioned in Tough v. Ives, 162 Conn. 274, 294, 294 A.2d 67 and which do not appear to exist here, we consider briefly the second, "where no right of the opposing party was affected." Here the right of the defendant municipality to investigate the plaintiff's claim and to prepare its defense obviously was hopelessly prejudiced by the passage of over a year after a snow and ice fall. Both this and the third ground for supporting the validity of a special act mentioned in Tough, namely "where the state recognized an honorary obligation so that substantial justice could be realized" are well illustrated by reference to the case most heavily relied upon by the plaintiff, namely, Sanger v. Bridgeport, 124 Conn. 183, 198 A. 746, where this court, upon facts somewhat similar to those now before us, upheld the constitutionality of a special act validating a defective notice to the defendant municipality of an injury caused by a defective sidewalk. The defendant has gone to some lengths to distinguish Sanger on the ground that it was "based on the belief that a municipality could not challenge what the Legislature did by legislation," urging that it therefore has been overruled by the later decision of this court in Ducharme v. Putnam, 161 Conn. 135, 285 A.2d 318, which held that a city, although a subdivision of the state, has sufficient interest and standing to raise a constitutional issue where the city was properly in *108 court on non-constitutional questions. As a matter of fact the defendant, after claiming that Sanger has been overruled, urges that "if it hasn't, ... it should be."
Upon the facts presented, however, Sanger can be distinguished without being considered overruled. There the plaintiff's notice was prepared by an assistant to the city clerk of Bridgeport, upon whom the plaintiff relied, and, although filed within the required time, was deficient in respect to the description of injuries and the exact place of occurrence. The city did receive some notice from the plaintiff of the claim, even though it may not have been entirely correct. In upholding the constitutionality of the special act which validated the defects in the notice the court repeatedly mentions the equitable basis for correcting an innocent error, stating (p. 186): "When the object is to correct an innocent mistake and remedy a resulting impediment to the enforcement of an obligation of one party to another, if the effect is to promote justice the law should be sustained unless it conflicts with vested rights" and again stating (p. 189): "It remains to be considered whether the act violates the constitutional guaranty, under the Fourteenth Amendment, of equal protection of the laws. The State may grant privileges to specified individuals without violating any constitutional principle in cases where sufficient reason exists.... Before a court can interfere it must be able to say that there is no fair reason for the law which would not require with equal force its extension to others whom it leaves untouched.... In the present case the plaintiff's reply alleges a situation which would afford strong equitable grounds for legislative interference... and it is safe and fair to presume that *109 these grounds were considered by the General Assembly and motivated the passage of the special act. Municipalities may be compelled not only to recognize their legal obligations but also to discharge those of an equitable and moral nature."
Obviously, the "equitable and moral" grounds existing in Sanger, where a timely notice was partially defective by reason of its preparation by a city employee upon whom the plaintiff relied, are not present in the instant case. The legislative records are devoid of any discussion of the special act, introduced as Senate Bill No. 384 into the senate "by request," other than the appended "Statement of Purpose" to the effect that "Mrs. Hillier was not aware of the thirty-day notice requirement, nor did she consult an attorney within the notice period."
Section 13a-149 of the General Statutes expressly gave to the defendant a defense against claims of the type made by the plaintiff. "The defendant's right of defense, which affected its substantial interests, became fixed in present enjoyment and available to the defendant under the statute in effect at the time of the injury .... It was a property right which vested in the defendant and for whose protection against legislative invasion in the form of a validating act or otherwise it could rely on Article First of our State Constitution and upon the Fourteenth Amendment of the Federal Constitution." Preveslin v. Derby & Ansonia Developing Co., 112 Conn. 129, 141, 151 A. 518. The special act involved here denies both the defendant and others similarly situated with the plaintiff the equal protection of the laws in the absence of any of the compelling equitable considerations which were present in Sanger v. Bridgeport, 124 Conn. 183, 198 A. 746.
*110 In addition, the passage of a validating act in the absence of such equitable justification, as in this instance, constitutes the creation of a right not already extant which grants to this plaintiff a privilege exclusive of that of the community. This clearly violates the mandate of article first, § 1, of the constitution of Connecticut providing that: "All men when they form a social compact, are equal in rights; and no man or set of men are entitled to exclusive public emoluments or privileges from the community." Over 150 years ago, shortly after the adoption of the foregoing language into our constitution. in 1818, this court stated that the direct infraction of vested rights by the legislature would be considered "as a violation of the social compact, and within the control of the judiciary." Goshen v. Stonington, 4 Conn. 209, 225. We hold Special Act No. 169 to be unconstitutional for the reasons given.
Our opinion in Sanger, supra, although it has been read to indicate a general constitutional imprimatur for validating acts of this general type is not inconsistent with the result we reach today. Rather, we have limited Sanger to the compelling equitable circumstances discussed therein.
There is error, the judgment is set aside and the case is remanded with direction to render judgment for the defendant.
In this opinion the other judges concurred.
NOTES
[1] "Be it enacted by the Senate and House of Representatives in General Assembly convened:
The notice given the town of East Hartford on March 20, 1970, concerning injuries received by Ellen Hillier on or about March 3, 1969, otherwise valid except that said notice was not filed within the time limited by section 13a-149 of the general statutes is validated. Said notice shall have the same power and effect as though the provisions of said section 13a-149 had been complied with and said town shall be barred from setting up the failure to comply with said section 13a-149 as a defense to said action and shall also be barred from denying that proper and sufficient notice of said injuries had been given to said town. Said Ellen Hillier may maintain and prosecute to final effect an action now pending in the supreme [sic] court for Hartford county for said injuries. Statement of Purpose: Mrs. Hillier was not aware of the thirty-day notice requirement, nor did she consult an attorney within the notice period."
[2] It is interesting to note that in the Murray case, the United States District Court for the District of Connecticut and the Circuit Court of Appeals for the Second Circuit were confronted with the unfortunate situation of an icy highway condition, where the plaintiff, a minor, was so badly injured that she claimed to have been unable to communicate the necessary information for the statutory notice to her mother until after lapse of the thirty-day limitation of time for giving notice. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537559/ | 355 A.2d 718 (1976)
GREATER PROVIDENCE TRUST COMPANY
v.
NATIONWIDE MUTUAL FIRE INSURANCE COMPANY.
No. 74-171-Appeal.
Supreme Court of Rhode Island.
April 14, 1976.
Adler, Pollock & Sheehan, Inc., Peter Lawson Kennedy, Stanley J. Kanter, George L. Chimento, Providence, for plaintiff.
John G. Carroll, Providence, for defendant.
OPINION
KELLEHER, Justice.
This is a suit concerning a fire insurance policy. It is before us on the plaintiff's appeal from a judgment entered in the Superior Court for the defendant, Nationwide Mutual Fire Insurance Company (Nationwide), after a jury-waived trial.
*719 Apex Realty, Inc. (Apex) d/b/a Apex Auto Body, Inc. owned a four-unit apartment house located at 433 Washington Street in the town of Coventry. The apartment house and a next-door garage, which served as the headquarters of Apex's auto body business, were subject to a first mortgage of $35,000 held by Centreville Savings Bank and a second mortgage of $16,641.91, which had been given by Greater Providence Trust Company (Greater Providence). The first mortgage was issued on June 4, 1969, and thereafter, in September 1970, Nationwide issued its fire policy on the apartment house property designating Centreville as the mortgagee. Greater Providence's mortgage was executed and recorded on October 19, 1970. The repair shop and apartment house were located on separate but contiguous parcels of real estate. The shop's address was 439 Washington Street.
On September 23, 1971, a fire destroyed a portion of the apartment house. Nationwide paid the fire loss by issuing a draft dated November 1, 1971, to Apex for $16,492. Shortly after this payment Apex went into receivership and subsequent developments explain the involvement of Greater Providence. The controversy in this appeal centers around the contention that Nationwide under the policy should have paid the mortgagee, Centreville Savings Bank, instead of Apex.
In May 1972, Greater Providence, having received the approval of the Superior Court, foreclosed its mortgage. After successfully acquiring the property with a $4,000 bid, the mortgagee's deed was recorded in June. On July 26 Centreville transferred its mortgage and note to the Greater Providence Deposit Corporation for a consideration of $33,681.43. The deposit corporation was described by its executive vice president as a holding company that owns all the stock in the trust company. On August 1 Centreville assigned all its interest in its fire claim to the deposit corporation. Later, the corporation assigned its rights under the policy to the trust company.
On August 17, 1972, Greater Providence made a demand upon Nationwide for payment of the $16,492 which it claimed should have been paid to Centreville. Thereafter, discussions ensued between Greater Providence's attorney and Nationwide's district claims manager. On September 22, 1972, the manager met with one of Nationwide's attorneys, who, in discussing the claim, pointed out that the 1-year period following the fire in which all claims must be brought under the policy would expire the next day. When Greater Providence's attorney called the claims manager in early October, the manager pointed to the policy and the 1-year stipulation. The attorney, after being informed that there would be no settlement, commenced this suit.
The trial justice, in finding for the defendant, relied upon the 1-year contractual limitation and further ruled that Nationwide was not estopped from asserting this defense. The policy issued by Nationwide contains what is known in the insurance trade as a "standard" mortgagee clause. The inclusion of such a clause is mandated by G.L.1956 (1968 Reenactment) §§ 27-5-2 and 27-5-3 and creates two separate contracts, one between the mortgagor and the insurer and the other between the mortgagee and the insurer. Old Colony Co-operative Bank v. Nationwide Mut. Fire Ins. Co., 114 R.I. 289, 292, 332 A.2d 434, 436 (1975); Greater Providence Trust Co. v. Nationwide Mut. Fire Ins. Co., 114 R.I. 926, 332 A.2d 784 (1975).
The fact that the policy contains two separate contracts, however, is of no help to Greater Providence. Since its claim emanates from the policy, we look to its provisions which in clear, precise, and allencompassing language state that "[n]o suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity unless all the requirements of this policy shall have been *720 complied with, and unless commenced within twelve months next after inception of the loss." This policy also stipulates that if the insured fails to render proof of loss, the mortgagee, upon notice, shall render proof of loss within 60 days thereafter and shall be subject to the provisions relating to appraisal, time of payment, and of bringing suit. While Greater Providence claims that the dual contract concept frees it from the 1-year proviso, it cites no case which supports this position.
To the contrary, courts which have considered policies containing the identical language to which we have just referred have ruled that both the owner and the mortgagee are bound by the limitation period set forth in the policy. Blanton v. Northwestern Nat'l Ins. Co., 335 F.2d 965, 969 (9th Cir. 1964); Sterling Savings & Loan Ass'n v. Reserve Ins. Co., 63 Ill.App.2d 220, 222, 211 N.E.2d 412, 415 (1965); Miners Say. Bank v. Merchants Fire Ins. Co., 131 Pa.Super. 21, 27, 198 A. 495, 498 (1938); see also 20A Appleman, Insurance Law § 11616 at 12 (1963 ed.); 18 Couch, Insurance § 75.43 at 733 (Anderson 2d ed. 1968). We are dealing with a uniform, standard form of policy provision, and we can see no reason why the plain language of the policy should receive a construction which differs from that it has received in other jurisdictions. Greater Providence, as assignee of Centreville, was bound by the policy to commence suit within the 12-month period following the fire.
Notwithstanding the application of the 1-year limitation, Greater Providence argues with great vigor that Nationwide's creation of a "settlement atmosphere" should estop the insurer from relying on this provision. In support of this theory, Greater Providence points to the fact that at some point in their discussions the claims manager failed to abide by his promise that he would furnish the attorney with a copy of the policy. Moreover, Greater Providence contends that once the insurer discovered that the 1-year period was about to lapse, it should have informed Greater Providence that the claim would not be settled. We do not agree with these contentions.
Mere negotiations between the insurer and a claimant cannot alone justify the application of estoppel. If so, settlement negotiations would be frustrated and impeded. Peloso v. Hartford Fire Ins. Co., 102 N.J.Super. 357, 369, 246 A.2d 52, 59 (1968). Therefore, these negotiations will not amount to estoppel unless they are accompanied by certain statements or conduct "* * * calculated to lull the claimant into a reasonable belief that his claim will be settled without suit." Flagler v. Wessman, 130 Ill.App.2d 491, 494, 263 N.E.2d 630, 632 (1970). See Shea v. Gamco, Inc., 81 R.I. 12, 17, 98 A.2d 864, 867 (1953); Lee v. City & County of Denver, 29 Colo. App. 256, 261-62, 482 P.2d 389, 392 (1971); Knight v. Lawrence, 331 Mass. 293, 295, 118 N.E.2d 747, 748 (1954). See generally, Annot., 39 A.L.R. 3d 127 (1971); Annot., 29 A.L.R. 2d 636 (1953).
While the circumstances and facts of each case play an important part in applying the test to which we have just referred, most courts usually will not find an estoppel unless at least one of the following situations is present: (1) the insurer by his actions or communications has assured the claimant that a settlement would be reached, thereby inducing a late filing, W. P. Hamblin, Inc. v. Newark Fire Ins. Co., 48 R.I. 473, 139 A. 212 (1927); Schaefer v. Kerber, 105 Cal. App. 2d 645, 234 P.2d 109 (1951), see Annot., 29 A.L.R. 2d 636, 658-61 (1953), or (2) the insurer has intentionally continued and prolonged the negotiations in order to cause the claimant to let the limitation period pass without commencing suit. Shea v. Gamco, Inc., supra; Triple Cities Constr. Co. v. Maryland Casualty Co., 4 N.Y.2d 443, 449-50, 176 N.Y.S.2d 292, 296, 151 N.E.2d 856, 859 (1958); see cases collected in 39 A.L.R. 3d 127, 140 n. 3 (1971). Neither of *721 these situations is present in this controversy.
The claims manager testified that he contacted the vice president of Centreville Savings on May 19, 1972, and asked him if the bank was going to file a proof of loss. According to the manager, the vice president replied that the bank would hold off on any filing because Greater Providence was going to take over, the first mortgage and he expected the bank would be paid off in full. The vice president conceded that in talking with the manager he might have said, "I'm going to wait and take our payment [out] of the sale there's enough equity there." The vice president also conceded that in transferring its mortgage, it was paid in full by Greater Providence. Once the transfers were completed, Greater Providence entered into a leasepurchase agreement whereby a trucking company agreed to buy the mortgaged premises for $47,500.
Actually, there was little difference in the testimony offered by Greater Providence's attorney and the claims manager relative to the content of their conversations with each other. As noted earlier, Greater Providence's August 1972 demand letter asked for the full $16,000. Thereafter, the attorney and the manager had several discussions. Throughout the discussions the manager took the position that if Nationwide paid, it would insist that Greater Providence assign its interest in the first mortgage to the insurer. This insistence caused a difference of opinion as to whether or not the policy conferred such a right on Nationwide.[1] The manager, in light of the $47,500 lease-purchase agreement, took the position that the trust company's actual loss would be negligible. Admittedly, Greater Providence's demand figures were lowered as negotiations continued on after mid-September, but the 1-year period ran out in the meantime. The trial justice, in making his findings of fact, aptly described the ongoing discussions between Nationwide and Greater Providence as, at most, a "probing" by the trust company without any "commitment" from the insurer.
An insurer may be estopped when it wrongfully or unjustifiably withholds the policy from an insured. Heezen v. Hartland Cicero Mitt. Ins. Co., 63 Wis. 2d 449, 454, 217 N.W.2d 272, 275 (1974). But here there is no evidence which would support a belief that Nationwide attempted to hoodwink the trust company by an intentional withholding of the policy. In fact the claims manager admitted that the fulfillment of his promise to supply a copy of the policy was delayed by his mandatory attendance during the week following their conversation at an instruction course on the latest developments in the fire insurance business conducted by his employer at an out-of-state location. Anyway, there was evidence that at this time Centreville had given its copy of the policy to the trust company.
At the trial it was also disclosed that Greater Providence had purchased from Lloyd's of London a blanket type fire insurance policy that covered any property upon which the trust company held a mortgage. The Superior Court records indicated that on September 22, 1972, Greater Providence had commenced suit against Lloyd's for the Apex loss. The trial justice specifically found that this suit was an indication that Greater Providence was well aware of its obligation to bring suit within the 1 year.
If an insured (or in this case the mortgagor's assignee) relies upon estoppel to avoid the, consequences of noncompliance with the 1-year limitation provision of the policy, he must prove the misleading conduct of the insurer and his reliance on that to his detriment. Ottendorfer v. Aetna Ins. Co., 231 A.2d 263, 265 (Del.Sup.Ct.1967). Here the trust company has failed to sustain its burden. We have reviewed the *722 record and find no reason to fault either the trial justice's findings of fact or his conclusions of law.
The plaintiff's appeal is denied and dismissed.
DORIS, J., did not participate.
APPENDIX
The pertinent portion of the mortgage clause reads as follows: "C. Mortgage Clause: * * * Loss, if any, under this policy, shall be payable to the mortgagee * * * named on the first page of this policy, as interest may appear under all present or future mortgages upon the property herein described in which the aforesaid may have an interest as mortgagee * * * this insurance as to the interest of the mortgagee * * * shall not be invalidated by any act or neglect of the mortgagor or owner of the within described property, nor by any foreclosure or other proceedings or notice of sale relating to am property, nor by any change in the title or ownership of the property, nor by the occupation of the premises for purposes more hazardous than are permitted by this policy * * *.
"Whenever the Company shall pay the mortgagee * * * any sum for loss under this policy, and shall claim that, as to the mortgagor or owner, no liability therefore existed, the Company shall to the extent of such payment, be thereupon legally subrogated to all the rights of the party to whom such payment shall be made * * * or may at its option pay to the mortgagee * * * the whole principal due * * * on the mortgage, with interest accrued and shall thereupon receive a full assignment and transfer of the mortgage * * * but no subrogation shall impair the right of the mortgagee * * * to recover the full amount of said mortgagee's * * * claim."
NOTES
[1] See Appendix. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537543/ | 167 Conn. 49 (1974)
DOUGLAS P. HALL, CONSERVATOR (ESTATE OF JULIE P. REVSON)
v.
TOWN OF WESTON
Supreme Court of Connecticut.
Argued May 7, 1974.
Decision released July 30, 1974.
HOUSE, C. J., SHAPIRO, LOISELLE, MACDONALD and BOGDANSKI, JS.
*50 L. Paul Sullivan, for the appellant (plaintiff).
Robert M. Wechsler, with whom was Bernard Glazer, for the appellee (defendant).
SHAPIRO, J.
The plaintiff, conservator of the estate of Julie Phelps Revson, brought this action against the town of Weston seeking damages and an injunction in order to restrain it from proceeding with the acquisition of certain of the Revson land intended to be used by the defendant town for school purposes. From a judgment rendered denying the prayer for relief, the plaintiff has appealed to this court.
The plaintiff assigns error in the court's refusal to find sixty-six paragraphs of his draft finding which he claims are admitted or undisputed, in the finding by the court of twenty-three paragraphs in *51 its finding which he claims are found without evidence or are of doubtful meaning, and in the failure by the court to reach the conclusions contained in the seventy-one paragraphs of the plaintiff's draft finding. Since these claims of error have not been briefed or argued, they are treated as abandoned. Multiplastics, Inc. v. Arch Industries, Inc., 166 Conn. 280, 282 n., 348 A.2d 618; Mahon v. Heim, 165 Conn. 251, 252, 332 A.2d 69; Maltbie, Conn. App. Proc. § 327. The plaintiff's remaining claims of error relate to the court's determination regarding the burden of proof as to the necessity of the taking by the defendant of the Revson property and to various claims regarding the rendering of the judgment by the court.
The salient facts found by the court follow, and while seemingly lengthy in our recitation of them, we consider this to be necessary for a proper discussion of the issues involved in this appeal: The defendant filed a "notice of taking" and a "statement of compensation" pursuant to General Statutes §§ 48-6, 48-12 and 8-129,[1] which notice and *52 statement are dated September 18, 1970, as the first steps in taking by eminent domain 10.5 acres of the Revson property. The defendant deposited with the clerk of the Superior Court the amount set forth in the "statement of compensation." Thereafter the plaintiff instituted this action. The 10.5 acres, part of 30.25 acres owned by Julie Phelps Revson, lie immediately north of the present middle school building, and condemnation of this land was sought for the dual purpose of providing playfields and subsurface septic facilities for an 800-pupil addition to that school. The acquisition of this land was recommended by the Weston board of education. This acreage is on the west side of the Revson property and comes within eighty feet of the westerly corner of the dwelling. Located on the 30.25 acres are a house with outbuildings, a swimming pool, a *53 tennis court, a dressing room or a bath. The court together with counsel viewed the premises and surrounding area.
In 1965 the Weston board of education adopted a grade organization known as 4-4-4, whereby kindergarten through the fourth grade are housed and administered in one complex known as the elementary school; grades five through eight are housed and administered in the middle school; grades nine through twelve are housed and administered in the high school. This grade grouping was adopted after recommendation by the superintendent of schools, studies and review by the board of education, and was decided upon as being the best and most desirable organization of Weston's school system. The existing middle school building as well as the other school buildings are located on a ninety-acre tract of town-owned land which is immediately adjacent to the condemned Revson property. Also located on this ninety-acre tract are other buildings including the town hall, the fire house, the town library, the school garage, the town dog pound, and the town highway department with buildings for garaging and storing heavy-duty highway equipment as well as nearby land used for storing piles of sand and salt.
The elementary school complex has a capacity of 950 pupils. The high school has a capacity of 750 pupils and, as of October 1, 1970, had 685 pupils. A third wing to the high school has been planned for 1974-1975. The existing middle school was built in 1960, has a capacity of 375-400 pupils, and, because of its limited space, houses only grades seven and eight, comprising 384 pupils. Grade six, comprising 191 pupils, is located in temporary classrooms *54 some distance from the middle school, while grade five is located in the elementary school complex. Thus, the present enrollment in the elementary school complex is 1048, thereby causing an excess in its capacity limit of 950. After completion of the addition to the middle school, its capacity will be 1200 pupils and this will allow some room for expected growth. In 1968, the total pupil capacity for the three schools was 2000 and in that year there were 2079 pupils. Enrollment projections for the town were made in 1969 and such projections were reviewed by the state board of education and found to be reasonable. In the past, by actual experience, such enrollment projections have been proved accurate. Historically, the greatest growth in the Weston school system is in the middle and high schools. After reviewing various matters in connection with its projections, the state board of education was of the opinion that its projections were conservative.
The state board of education recommends twenty-seven usable acres for a middle school capacity of 1200 pupils. The addition to the school building will be on the town-owned land connected to the present school. The town explored many sites, including town-owned and other property, in an effort to find a location for the playfields required by the educational program for the expanded middle school. This review covered a period of two years. Physical education is an important part of the curriculum of the middle school as it is in all other schools. The playfields for girls in the middle school will be located on present town-owned property which is adequate. The boys' playfields will consist of two baseball fields of approximately three-and-one-half acres each for use in the spring, and superimposed thereon will be a soccer field and football field for *55 use in the fall. There is no suitable land on the town-owned property for the boys' playfields needed for the middle school addition. The town owns approximately six acres of land lying to the west of the middle school and adjoining a service road, which tract is irregular in shape and very steep. To obtain one baseball field in that area would require construction of a 600-foot retaining wall which would be excessive in cost. If sloping were used instead of a retaining wall, a shoulder on ninety feet would be required to support the service road thereby leaving insufficient area for one baseball field. In addition, this area is presently the site of the subsurface septic leaching field for the existing middle school and the leaching field would have to be relocated and rebuilt. Four-and-one-half acres of this land are swampy with a peat bog and very wet. To construct a baseball field thereon would require drainage, clearing, excavation of the peat and refilling to a height above the water table for which the estimated cost was $200,000. Other areas in the town-owned complex are at too great a distance to be suitable for playfields for the middle school. The 10.5-acre Revson site is suitable for providing the area necessary for the boys' playfields for use with the expanded middle school.
Adequate subsurface facilities must also be provided for the 800-pupil addition to the middle school. The town explored many sites both on and off its own property in an effort to find a location for such subsurface septic facilities. The state department of health will approve subsurface septic facilities in this area for only an additional 600 pupils and this does not take into account a 100 percent reserve area requirement by this department, effective January 14, 1970, which now must be met by the town. *56 Various areas near the middle and high schools cannot comply with requirements of the state health code for subsurface septic facilities. The area where the temporary classrooms are located shows evidence of capacity for such facilities but its distance from the middle school renders its use too costly for this purpose. There is no suitable land on the town-owned property for the subsurface septic facilities required for the 800-pupil addition. After soil percolation tests of the Revson property, the state department of health approved that site for the subsurface septic facilities. These facilities will consist of two subsurface leaching fields and connecting facilities as well as a reserve area for each field which is necessary in case of a breakdown of the main system.
The town made an extensive and exhaustive reevaluation of its educational program and system and only after exploring all alternative sites, considering the requirements of its educational program, was action taken by vote to acquire the Revson land as a solution to the town's immediate educational needs. This review, over a period of two years, included grade groupings, sites off and on the town property and various building combinations, assistance by architects and engineers who designed the proposed middle school addition and who previously designed the high school, and a review of town-owned property and surrounding privately-owned properties. From this review the Revson site was determined to be the most suitable for both playfields and subsurface septic fields. Other private properties reviewed by the town were found unsuitable because they were too wet or swampy, contained springs or were too distant to be feasible. Charles J. Owen, Jr., the town's consuiting *57 engineer, who had been involved in services related to seventy-five schools and colleges, and is the soils engineer for the architectural firm designing the middle school addition, recommended that the Revson property would be needed to provide the necessary area for the septic fields and the boys' playfields. Owen worked on the design and location of the high school which was completed in 1968. He is familiar with the entire town property complex on which the schools are located and has spent considerable time in all seasons of the year during the past five years on the town properties in his work as engineer on town projects. He studied the areas between the middle school and the highway department which are upland swamps with a peat bog and the area east and south of the high school and determined that they were unsuitable for subsurface septic facilities. The opinion of the chief of the bureau of school buildings of the state board of education was that acquisition of the Revson land was essential to the school expansion to a 1200 pupil capacity. Thereafter, on June 1, 1970, the town board of education resolved to acquire the Revson property. The plaintiff made no tests and has failed to demonstrate the suitability of any other property for subsurface septic facilities for the proposed middle school.
On June 29, 1970, by referendum, the town appropriated $305,000 for architects' fees for preparation of final plans and specifications and bid documents for the 800-pupil addition to the middle school. This referendum was preceded by a town meeting on June 19, 1970, at which time the proposed condemnation was discussed. For a year or more prior to the town meeting the need and planning for the school were discussed by the town board of education at *58 numerous meetings with the townspeople. The town board of education, the board of finance and the board of selectmen recommended and approved the acquisition of the Revson site for school purposes and recommended and approved the appropriation of $235,000 for its acquisition and the costs and expenses thereof.[4] After the referendum vote on June 29, 1970, the town attempted to agree with the plaintiff on a sales price for the land but these efforts failed. The final plans and specifications for the construction of the addition to the middle school went out to bid on December 2, 1970. As of the date of the conclusion of the trial, December 15, 1970, no referendum was yet held by the town for the appropriation of funds for the construction of the school addition. The total cost of the 800-pupil addition including the cost of acquiring the Revson site is estimated at a little over $6,000,000. The town's bonding capacity based on tax receipts as of June 30, 1969, is $7,329,464.32.
*59 On the facts as found, the court concluded that the defendant complied with General Statutes §§48-6, 48-12, 8-128[5] and 8-129; that the condemnation proceeding was begun in accordance with § 48-12 by the filing of a statement of compensation, lis pendens and service of a notice of taking within six months of a referendum vote as required by § 48-6; that the burden of proof that the decision of the town to condemn the Revson property was arbitrary, unreasonable, in bad faith or in abuse of its power or discretion is upon the plaintiff and the determination of the necessity for such taking is subject to review only for the same reasons; that necessity means only reasonable necessity and there is no requirement that the town plead or prove it; that the town did not act arbitrarily, unreasonably or in bad faith, or abuse the power or discretion conferred upon it, nor did it so act in determining that the Revson property should be condemned for playfields and subsurface septic facilities for the expansion of the middle school as being reasonably necessary for the addition to it; that the town is not required to have a referendum to approve the actual construction of the school or vote the funds therefor prior to the condemnation of the Revson property; and that the plaintiff has failed to sustain the burden of proving unreasonableness, abuse of power, discretion or bad faith in the actions of the town and has failed to demonstrate the suitability of any other land for subsurface septic facilities for the proposed school.
*60 In his appeal the plaintiff assigns as error the conclusions of the trial court. The court's conclusions are tested by the finding. C & R Connair, Inc. v. Hartford, 166 Conn. 413, 352 A.2d 298; Hartford Kosher Caterers, Inc. v. Gazda, 165 Conn. 478, 480, 338 A.2d 497. They must stand unless they are legally or logically inconsistent with the facts found or unless they involve the application of some erroneous rule of law material to the case. Klein v. Chatfield, 166 Conn. 76, 80, 347 A.2d 58.
The plaintiff's claims will be discussed in the order raised in his brief. The first contention made is that the condemnation was speculative in nature in not being based upon a decision to use the property for public use. The main thrust of this claim is that no town meeting and referendum had been held to determine whether the proposed middle school addition would ever be built and that the referendum of June 29, 1970, merely appropriated money to prepare a detailed proposal to build to be later submitted to the electorate.
The court found that the town plan, published in 1969, included the Revson property as a possible site and this plan proposed that part or all of the Revson property be acquired for middle school purposes to implement the 4-4-4 grade division system. The referendum vote of June 29, 1970, appropriated a sum for architects' fees for preparation of final plans, specifications and bid documents for the middle school addition on this site. After this referendum vote the town attempted to agree with the plaintiff on a sales price for the 10.5 acres of the Revson land, but without success. Thereafter, the condemnation proceeding was begun in accordance with § 48-12 by filing a statement of compensation, lis pendens and service of a notice of taking within *61 six months of the referendum vote as required by § 48-6. The plaintiff argues in his brief and before this court that the town should have waited with regard to these condemnation proceedings, that is, held up finalizing its plans and specifications and not have expended money for architects' fees until it had decided on the construction of the school, and that, therefore, the condemnation proceedings were premature and speculative in nature and could not be construed as intended to utilize the property for a public purpose. The plaintiff cites no authority for this proposition. We view this as an untenable position since it clearly suggests that the first step required is a referendum whereby funds might be appropriated for the actual construction of the school addition, such action to take place prior to the acquisition of the building site.
In West Hartford v. Talcott, 138 Conn. 82, 82 A.2d 351, in which the town took land fixed upon as a school site, this court held (p. 88):[6] "Plans for the use of the properties sought to be taken for an addition to the school and for a playfield, along the lines stated above, were carefully prepared by the principal and the superintendent of schools, were approved by the board of education and formed the basis of the action of the town council in voting to acquire the property." Thereafter, the West Hartford town council authorized and directed its corporation counsel to institute condemnation proceedings for the purpose of acquiring the defendant's *62 land. In the present case § 48-6 in connection with § 48-12 provides the procedures whereby a municipal corporation may take land by condemnation for municipal purposes. As the finding discloses, care was exercised by the town in determining its school needs in discussions held by the board of education with the townspeople at numerous meetings; in reviewing various properties over a two-year period; in receiving the recommendation of the boards of education, finance and selectmen for the acquisition of the site; in concluding that the Revson property was the most suitable to fill its needs; and in its eventual resorting to condemnation in accordance with the statutory requirements. The conclusions reached by the court that the town has complied with §§48-6, 48-12, 8-128 and 8-129 are fully supported by the finding.
The claim that the property cannot be condemned without a prior decision by the town that the land is necessary for a specific and determined public use requires some discussion. First, it must be remembered that §§ 48-6 and 48-12 limit a municipal corporation to taking real estate by condemnation for its municipal purposes. In dealing with a right of condemnation regarding an easement for public use this court held that "it is sufficient to observe that an obligation to devote the easement to the specified public use authorized by the legislature grows out of the acceptance and exercise of the delegated power of eminent domain. Water Commissioners v. Manchester, 87 Conn. 193, 200, 87 A. 870.... Should the plaintiff breach its duty ... [to use the land for some objective foreign to the purpose for which it was taken], there is ample judicial machinery available to the defendants to rectify the wrong. A claim of the nature under discussion *63 can be made in almost every condemnation case. It amounts to nothing more than legal bugaboo. By exercising the power of eminent domain granted by the act, the plaintiff becomes bound to devote the property acquired to the purpose for which the legislature has authorized the taking...." Northeastern Gas Transmission Co. v. Collins, 138 Conn. 582, 588-89, 87 A.2d 139. Thus, it can be seen that the town of Weston, in exercising its power of eminent domain is bound to devote the condemned property to the public use for which it was thus acquired. The claim is without merit.
The plaintiff makes the claim that the court was in error in requiring him to go forward with the evidence and assume the burden of proof as to the necessity of the taking. The plaintiff relies upon State v. Simmons, 153 Conn. 351, 216 A.2d 632, as authority for this contention. A careful reading of that case will disclose that such a reliance is unwarranted. The plaintiff alleged in his complaint that the town "has failed and neglected to comply with the General Statutes prescribing the procedure for taking land by eminent domain." The defendant in its answer denies this allegation. This left the burden of proof with the plaintiff as to his affirmative allegation. As already pointed out, the town proceeded under statutory authority to condemn the plaintiff's land. The burden of attacking that authority rested upon the plaintiff. See State v. Simmons, supra, 353; State v. Fahey, 147 Conn. 13, 18, 156 A.2d 463; Bridgeport Hydraulic Co. v. Rempsen, 124 Conn. 437, 442, 200 A. 348; Water Commissioners v. Johnson, 86 Conn. 151, 160, 84 A. 727.
The plaintiff makes the claim that the town ignored the existence of its own adequate and *64 unappropriated land adjacent to the existing school. The finding discloses that the town explored many sites both on and off town property; that the land comprising the six acres west of the middle school was too steep and excessive in cost so as to be used as a baseball field; that such construction would require the relocation and rebuilding of the septic leaching fields; that the four-and-one-half acres between the highway department area and the middle school are swampy with a peat bog and very wet, and in order to construct a baseball field thereon the cost to drain, clear, excavate and refill the area would be $200,000, an excessive sum; that the area south and west of the middle school was found unsuitable by the state health department; that the area east of the school is a swamp with peat bog overlaying clay or till and is unsuitable for underground septic facilities; that other areas were either unsuitable, too far removed or too costly to develop; and that there is no suitable land on the town-owned property for the subsurface septic facilities required for the school addition. The court further found that the town's consulting engineer recommended the need for the Revson land for the septic fields; that the chief of the bureau of school buildings of the state board of education gave his opinion that the land was essential to the completion of the school; and that Charles J. Owen, Jr., the town's consulting engineer, recommended the use of the Revson land. The plaintiff contends that Owen's recommendation should be disregarded in the light of testimony given by his own expert. "The trier may accept or reject the testimony of an expert offered by one party or the other in whole or in part. Richard v. A. Waldman & Sons, Inc., 155 Conn. 343, 348, 232 A.2d 307. It is elementary that *65 the trier is the final judge of the credibility of the evidence and the weight to be given to it. Morgan v. Hill, 139 Conn. 159, 161, 90 A.2d 641." Cecio Bros., Inc. v. Feldmann, 161 Conn. 265, 271, 287 A.2d 374. We find no merit to this claim.
The next claim made by the plaintiff is that the court erred in allowing the town to condemn a greater legal interest in the land, here the fee, where a lesser legal interest, an easement, would satisfy the town's need. The plaintiff argues in his brief "that a condemnor cannot take the fee in the land where an easement would completely satisfy its requirements." As his authority the plaintiff cites Northeastern Gas Transmission Co. v. Collins, supra. There the court (p. 592) held: "It is within the province of the legislature to determine both the quantity and the quality of the estate which a condemnor may acquire. 3 Nichols, Eminent Domain (3d Ed.) §9.2 [1]. Thus, authority may be granted to take the fee or an easement. Driscoll v. New Haven, 75 Conn. 92, 99, 52 A. 618. The legislature may likewise authorize the taking of an interest which is either permanent or temporary. Waterbury v. Platt Bros. & Co., 75 Conn. 387, 392, 53 A. 958." In Collins the plaintiff sought to obtain a right of way fifty feet in width to cross the defendant's land of which the inner thirty feet were sought for a permanent easement within which to lay the gas pipe while the outer ten feet on each side temporarily were needed solely for the purpose of providing ample space for the movement of heavy equipment used in the installation of the pipe.
In the present case, the court found that the playfields and subsurface septic facilities are planned *66 to be constructed at the most feasible locations for these facilities and that to locate some of the facilities in other areas would be too costly. Further, the taking line and site of the area condemned conforms with that recommended by the town's consulting engineer. The court concluded that the 10.5 acres of the Revson property are reasonably necessary to provide playfields and subsurface septic facilities for the expanded middle school. Thus, because of the nature of the use of the Revson land for the school purposes which we have enumerated, the plaintiff's reliance upon the case of Northeastern Gas Transmission Co. v. Collins, supra, does not aid him. Here, the town acted under statutory authority of eminent domain in taking land for municipal purposes. The nature of the use was clearly an essential part of the school program. As already stated, the plaintiff had the burden of establishing that the taking by the town was unreasonable, in bad faith or an abuse of power. This he failed to do.
Finally, the plaintiff assigns error in the claim that the court failed to require that the location of the taking be such so as to minimize the detrimental effect which the taking would have on the remaining Revson property. In his complaint, the plaintiff alleged that the 10.5 acres are an integral part of the Revson estate and its condemnation will sever approximately one-third of the land of the estate, the effect of which will be drastically to destroy its characteristics. In his brief, the plaintiff refers to this as "severance damage" and argues that the taking can be restrained if it is excessive and that the amount of land to be taken must be reasonable and not arbitrary. Based on the facts before it, the court concluded that the town, in condemning *67 the 10.5 acres, did not act arbitrarily or unreasonably and the property was necessary for the middle school addition. From the facts as found by the court, we cannot say that its conclusions are not legally or logically consistent with those facts. Nor can we say that they involve the application of some erroneous rule of law material to the case.
There is no error.
In this opinion the other judges concurred.
NOTES
[1] "[General Statutes] Sec. 48-6. WHEN MUNICIPAL CORPORATIONS MAY TAKE LAND. Any municipal corporation having the right to purchase real estate for its municipal purposes which has, in accordance with its charter or the general statutes, voted to purchase the same shall have power to take or acquire such real estate, within the corporate limits of such municipal corporation, and if, such municipal corporation cannot agree with any owner upon the amount to be paid for any real estate thus taken, it shall proceed in the manner provided by section 48-12 within six months after such vote or such vote shall be void.
"[General Statutes] Sec. 48-12. PROCEDURE FOR CONDEMNING LAND. The procedure for condemning land or other property for any of the purposes specified in sections 48-3, 48-6, 48-8 and 48-9, if those desiring to take such property cannot agree with the owner upon the amount to be paid him for any property thus taken, shall be as follows: The comptroller in the name of the state, any town, municipal corporation or school district, or the trustees or directors of any state institution in the name of the state, shall proceed in the same manner specified for redevelopment agencies in accordance with sections 8-128, 8-129, 8-129a, 8-130, 8-131, 8-132, 8-132a and 8-133.
"[General Statutes] Sec. 8-129. AGENCY TO DETERMINE COMPENSTION AND FILE WITH SUPERIOR COURT AND TOWN CLERKS; NOTICE TO OWNERS AND INTERESTED PARTIES. POSSESSION OP LAND. CERTIFICATE OF TAKING. The redevelopment agency shall determine the compensation to be paid to the persons entitled thereto for such real property and shall file a statement of compensation, containing a description of the property to be taken and the names of all persons having a record interest therein and setting forth the amount of such compensation, and a deposit as provided in section 8-130, with the clerk of the superior court for the county in which the property affected is located. Upon filing such statement of compensation and deposit, the redevelopment agency shall forthwith cause to be recorded, in the office of the town clerk of each town in which the property is located, a copy of such statement of compensation, such recording to have the same effect as and to be treated the same as the recording of a lis pendens, and shall forthwith give notice, as hereinafter provided, to each person appearing of record as an owner of property affected thereby and to each person appearing of record as a holder of any mortgage, lien, assessment or other encumbrance on such property or interest therein...."
[4] Article 2 of the town charter of the town of Weston specifies in part as follows: "Section 2.1 ... The legislative powers of the Town, to the extent specified in this article, shall be vested in the Town meeting.... Section 2.4 ... A Town Meeting shall be required for the approval of any of the following: ... (b) after recommendations by the Board of Selectmen and approval by the Board of Finance: (1) an appropriation or an authorization for the issuance of bonds, notes, or other borrowing in excess of the amounts provided for in Section 8.5 of this Charter, but less than $100,000; ... Section 2.5 Appropriations or Other Action Requiring Referendum A referendum shall be required in the following instances; (a) ... any appropriation or any authorization for the issuance of bonds, notes or other borrowing of $100,000 or more, after it has been recommended by the Board of Selectmen and approved by the Board of Finance, or any extraordinary appropriation as provided in Section 8.6 in this Charter shall be subject to referendum...." Sections 2.4, 2.5, 8.5 and 8.6 of the charter provide that the extraordinary appropriations for any agency exceeding $2000 must be voted upon by a town meeting (if less than $100,000) and by referendum if they exceed $100,000.
[5] "[General Statutes] Sec. 8-128. ACQUISITION OR RENTAL OF REAL PROPERTY IN A REDEVELOPMENT AREA.... The redevelopment agency may acquire real property by eminent domain with the approval of the legislative body of the municipality and in accordance with the provisions of sections 8-129 to 8-133, inclusive, and this section...."
[6] The opinion on pages 85 to 87 had discussed the court's finding regarding the need to acquire for school purposes two pieces of land comprising 8.62 acres as being necessary to expand the school's physical plant so as to permit needed area for proper pupil instruction and physical education. The forecasting of school requirements and the sufficiency of future needs as well as the importance of physical education in the curriculum were recited. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537555/ | 167 Conn. 151 (1974)
TOWN OF WESTPORT ET AL.
v.
CITY OF NORWALK ET AL.
Supreme Court of Connecticut.
Argued June 7, 1974.
Decision released August 20, 1974.
HOUSE, C. J., SHAPIRO, LOISELLE, MACDONALD and BOGDANSKI, JS.
*152 Grove W. Stoddard, with whom, on the brief, was John S. Barton, for the appellants (plaintiff John G. Akin et al.).
Stanley P. Atwood, town attorney, for the appellant (named plaintiff).
Melvin J. Silverman, for the appellee (defendant Flower Estates at Cranbury, Inc.); with him, on the brief, was Arthur J. Goldblatt, corporation counsel, for the appellee (defendant planning and zoning commission of the city of Norwalk).
SHAPIRO, J.
In June of 1972, the defendant Flower Estates at Cranbury, Inc., (hereinafter called Flower Estates) made application to the planning and zoning commission of the city of Norwalk (hereinafter called the commission) for approval of a plan for a fifty-lot subdivision of a thirty-acre tract of unimproved land. The land, situated entirely in Norwalk, is bounded on the west by Wolfpit Avenue, on the north by Partrick Avenue and on the east by Cranbury Road; Cranbury *153 Road forms a boundary between Norwalk and Westport. The plaintiffs comprise the town of Westport, the Norwalk-Westport Cranbury Association, Inc., and various property owners in the area and vicinity of the proposed subdivision. On September 6, 1972, the commission approved the plan. The plaintiffs appealed to the Court of Common Pleas where the appeal was dismissed. Upon the granting of their petition for certification, the plaintiffs appealed to this court.
The plaintiffs, in their brief, have abandoned their first assignment of error relating to a ruling on evidence. They assign error in the overruling by the court of various claims of law and in the claim that the court erred in employing improper standards of review to test the action taken by the commission with respect to the Flower Estates subdivision. We will discuss this last claim first.
In their brief, the plaintiffs argue that the standards of judicial review as applied by the court "to this subdivision appeal were standards properly employed only in zoning cases where the central issue is the proper use of discretion by the zoning agency" and that the use of this standard by the court "never permitted it to reach the central issue of a subdivision case which is, did the application comply" with the subdivision regulations of the city of Norwalk.
The trial court, in its memorandum of decision, recited that this is an appeal from the planning and zoning commission of the city of Norwalk "approving a subdivision plan for a tract of unimproved land" and that "the basic ground for said appeal is that the board acted illegally, unreasonably, arbitrarily *154 and in abuse of its discretion, as more fully set forth in said plaintiffs' appeal." In their appeal, the plaintiffs allege that they are aggrieved by the action of the commission in approving the subdivision in that the approval is in violation of § 3.01[1] of the subdivision regulations and will result in increased flood damage to their properties; and in that such approval is in violation of § 3.07[2] of the subdivision regulations and will adversely affect traffic, fire protection and general safety in the area of the plaintiffs' properties. Nowhere in their appeal do the plaintiffs allege that "the board acted illegally, unreasonably, arbitrarily and in abuse of its discretion."
In February, 1968, at the time of this court's decision in J & M Realty Co. v. Norwalk, 156 Conn. 185, 239 A.2d 534, planning in the city of Norwalk was governed by special act and not by the general statutes. At that time, approval of plans for a subdivision was required by the Norwalk planning commission in the first instance and then by the Norwalk common council. By special acts, in 1947 and 1955, a city planning commission was established in Norwalk. J & M Realty Co. v. Norwalk, supra, 188. By amendment to the charter of the city of Norwalk (1970), § 1-368.1, effective January 1, 1971, the planning commission was granted "the *155 powers and duties granted to and imposed on planning commissions under Chapter 126 of the Connecticut General Statutes, which are not inconsistent with the duties and powers set forth in said Charter." By virtue of a further charter amendment, § 1-368.2, provision was made whereby the common council was authorized to consolidate the planning and zoning commissions. By adoption on July 13, 1971, § 116-13 of the Code of the City of Norwalk provided that pursuant to authority under § 1-368.2 the planning commission was designated as the planning and zoning commission. By adoption of § 116-14, that commission was granted all the powers and made subject to all of the duties of zoning commissions under provisions of chapter 124 of the General Statutes,[3] together with all powers and duties imposed upon the planning commission under the city charter and all powers and duties granted to and imposed upon planning commissions under chapter 126 of the General Statutes,[4] not inconsistent with those set forth in the charter.
"In exercising its function of approving or disapproving a subdivision plan, the planning board acts in an administrative capacity. In passing upon a plan, its action is controlled by the regulations adopted for its guidance. It has no discretion or choice but to approve a subdivision which conforms to the regulations." Langbein v. Planning Board, 145 Conn. 674, 679, 146 A.2d 412; Forest Construction Co. v. Planning & Zoning Commission, 155 Conn. 669, 674, 236 A.2d 917. "Zoning, on the other hand, is concerned with the use of property." Purtill v. Town Plan & Zoning Commission, 146 *156 Conn. 570, 572, 153 A.2d 441. In voting a change of zone of an area, a zoning commission exercises a legislative function. See Burke v. Board of Representatives, 148 Conn. 33, 38, 166 A.2d 849; Kutcher v. Town Planning Commission, 138 Conn. 705, 709, 88 A.2d 538.
Here, the trial court in its memorandum of decision regarding the commission's action used language appropriate to an appeal from a zoning commission. However, the effect of its decision is that, in view of the plaintiffs' appeal, the court, in its judgment, found the issues for the defendants and dismissed the appeal. The case was presented in the court below on the record of the proceedings before the commission. The only testimony in the recordthat relating to a witness called on behalf of the plaintiffsis not now before us, since a ruling thereon having been assigned as error was abandoned by the plaintiff. The court limited its finding to the issue of aggrievement.
The plaintiffs, while arguing that they have been denied adequate judicial relief because their appeal was treated by the court as one taken from a zoning commission rather than one taken from a planning commission, nevertheless request us to review the record and determine the appeal on its merits. This we will do, while pointing out that a review of the record of the commission which was before the trial court and our determination of the remaining issues assigned as error, for the reasons enumerated below, lead us to the conclusion that the trial court was correct when it dismissed the appeal. "Simply because the trial judge relied on the wrong theory does not render the judgment erroneous. A correct decision can be sustained although it may have been *157 placed on the wrong grounds. Emerick v. Monaco & Sons Motor Sales, Inc., 145 Conn. 101, 106, 139 A.2d 156." Powers v. Common Council, 154 Conn. 156, 161, 222 A.2d 337; Maltbie, Conn. App. Proc. §36.
The plaintiffs make the claim that the approval by the commission of the subdivision plan was illegal in that it violated § 3.01 of the subdivision regulations. The plaintiffs contend that upon the evidence before the commission, it could not reasonably have come to any other conclusion than that the subdivision might aggravate the flood hazard and therefore the commission was required to disapprove the application. The burden was on the plaintiffs to prove that the action of the board was illegal. Blakeman v. Planning Commission, 152 Conn. 303, 306, 206 A.2d 425. Before a planning commission can exercise any control over the planning of a subdivision, regulations must be adopted for its guidance. J & M Realty Co. v. Norwalk, 156 Conn. 185, 191, 239 A.2d 534; South East Prop. Owners & Residents Assn. v. City Plan Commission, 156 Conn. 587, 590, 244 A.2d 394; Langbein v. Planning Board, 145 Conn. 674, 679, 146 A.2d 412. "[I]n passing on subdivision plans, the council is to be controlled by the regulations which it has adopted." J & M Realty Co. v. Norwalk, supra, 191; see South East Prop. Owners & Residents Assn. v. City Plan Commission, supra, 591; North Rollingwood Property Owners Assn. v. City Plan Commission, 152 Conn. 518, 521, 209 A.2d 177; Langbein v. Planning Board, supra, 679; Beach v. Planning & Zoning Commission, 141 Conn. 79, 83, 103 A.2d 814. If the subdivision plan conforms to the existing regulations the council "has no discretion or choice but to approve a subdivision." Langbein v. *158 Planning Board, supra, 679; see South East Prop. Owners & Residents Assn. v. City Plan Commission, supra, 591; Beach v. Planning & Zoning Commission, supra, 84. Conversely, if the subdivision plan does not conform to the regulations the plan must be disapproved. South East Prop. Owners & Residents Assn. v. City Plan Commission, supra, 591; Forest Construction Co. v. Planning & Zoning Commission, 155 Conn. 669, 675, 236 A.2d 917.
Regulations concerned with subdivisions in Norwalk had been adopted pursuant to 25 Spec. Laws 303, No. 214, § 5. One such regulation was Norwalk subdivision regulation § 3.01, the language thereof already having been quoted in footnote 1. Thus, the function of the commission in the present case was to determine whether the subdivision plan as submitted by Flower Estates conformed with this regulation.
The first hearing on the application took place on June 20, 1972, before the subdivision committee of the commission. Following a favorable report of June 5, 1972, from the zoning officer, a second meeting of the subdivision committee was held, and on September 6, 1972, the subdivision plan was approved by the committee, although the effect of that approval was only to permit the application to go before the commission. The hearing before the full commission took place on September 6, 1972. The appendices to the briefs disclose that the evidence at the hearing before the commission, offered by the plaintiffs and by Flower Estates, was in conflict, but its probative force was for the commission. Parish of St. Andrew's Church v. Zoning Board of Appeals, 155 Conn. 350, 359, 232 A.2d 916. There was evidence in behalf of the plaintiffs that *159 there would be an increase of water from the subdivision, that this would aggravate the flood hazard, and that therefore the subdivision should be disapproved. There was also evidence in behalf of Flower Estates which challenged that claim pointing to a study of the subdivision which had been made to determine if the proposed development of the land would increase the storm drainage problem in Stony Brook. The study showed that the subdivision produces no runoff in the percentage of runoff increase and deals with the discharge before the main body of water runoff is presented to the area; that it is difficult to measure how much water falls within a certain area and then how long it takes to reach certain points to achieve the peak runoff period; that the major contributory to Stony Brook is at the Partrick Avenue culvert in Westport and the minor contributory area is this subdivision. Reference was made to charts showing what area of the subdivision contributes to Stony Brook and also where the other runoff comes, being mainly from the Partrick Avenue area. Poor maintenance practices are the reason for the problems and the proposed subdivision will not add any increase in the amount of storm runoff. The study also showed that the concern about flooding has arisen from the lack of proper stream encroachment regulations rather than increased development within the upstream tributary areas; that through the years extensive encroachments have been constructed by some of the property owners along the stream without proper engineering guidance or municipal regulations; and that this, together with the obvious lack of channel maintenance, is the real problem to be corrected.
The subdivision committee of the commission, in its approval of the Flower Estates subdivision plan, *160 stated: "This is basically the same application as was previously approved by the Commission and the Common Council in May, 1969 but was later denied by the Supreme Court on grounds of a legal technicality."[5] This committee referred to two proposed streets, Regency Drive to be 2050 feet in length and Queens Gate to be 400 feet in length. Reference was also made to the requirement of providing specific storm drainage, water mains, sanitary sewer mains, laterals, manholes and a sewage pumping station. Further conditions were imposed in that certain easements through the subdivision were retained by the city of Norwalk relating to drainage and sanitary sewer easements; a conveyance is to be made to the city of a portion of the subdivision, designated as Parcel A, for purposes of a sewage pumping station; the storm drainage from the area south of the subdivision is to enter a drainage pipe between lots 26 and 27 and continue under Regency Drive to Partrick Avenue and, at a fixed point, the flow is to be diverted into an adjacent pond; and the outflow from this pond is to continue in the pipe under Regency Drive and Partrick Avenue into a brook north of the latter street. This brook now flows through a thirty-six inch pipe under Cranbury Road into Stony Brook which flows into the town of Westport. The existing thirty-six inch pipe under Cranbury Road will be replaced with a thirty-eight-inch by sixty-inch low head pipe to provide additional discharging capacity for any increase in runoff from the subdivision. The drainage system for the subdivision has been designed so that fifteen acres of this property will drain into the brook north of Partrick Avenue, approximately eight acres will drain to Cranbury Road, and about seven *161 acres will drain to Wolfpit Avenue. Drainage on Wolfpit Avenue will be piped and connected to the city storm drainage system. The drainage and the sewerage design for the subdivision have been checked and approved by the Norwalk Department of Public Works. A surety bond in the amount of $236,000 was recommended so as to insure the proper completion of the required improvements within ninety days of action by the commission.
At the commission meeting of September 6, 1972, the subdivision plans were approved "subject to the submission of a surety bond in the amount of $236,000 or proper completion of the required improvements within 90 days of Commission action and also subject to the submission of written sanitary sewer and storm drainage easements to the City of Norwalk."
Whether the land in question "might ... aggravate the flood hazard"; Norwalk Subdivision Regs., art. III § 3.01; presented debatable questions of fact which were within the commission's province to resolve. In testing the decision of the commission, its action "is reviewed in the light of the record developed before it." Blakeman v. Planning Commission, 152 Conn. 303, 306, 206 A.2d 425. "It is enough to point out the reasonableness of the conclusions arrived at .... `The essential question, in any case, is whether ... [the commission's decision] is reasonably supported. Courts do not substitute their own judgment for that of the commission so long as honest judgment has been reasonably and fairly exercised after a full hearing.'" Id., 308. We find that the record amply supports the action of the commission in approving the subdivision plan. It cannot be said that it acted illegally in *162 that it violated § 3.01 of the regulations pertaining to subdivisions which might aggravate the flood hazard. Accordingly, the plaintiffs cannot prevail on this claim.
The plaintiffs have assigned error claiming that the commission's approval of the subdivision plan was illegal in that it violated § 3.07[6] of the subdivision regulations which prohibits the creation of blocks by new subdivisions which are more than 1200 feet long.
"[W]e have consistently held that, in exercising its function of approving or disapproving any particular subdivision plan, ... a municipal planning commission is acting in an administrative ... capacity." J & M Realty Co. v. Norwalk, 156 Conn. 185, 190, 239 A.2d 534. "Its action was controlled by the regulations adopted for its guidance." Blakeman v. Planning Commission, supra, 306. "Where the language is plain and unambiguous, as in the present case, the intent of the regulation is to be determined from its language." J & M Realty Co. v. Norwalk, supra, 192. "When the language ... is clear and unambiguous, its meaning is not subject to modification by construction .... It is not the function of the courts to read into clearly expressed legislation provisions which do not find expression in its words." Dental Commission v. Tru-Fit Plastics, Inc., 159 Conn. 362, 365, 269 A.2d 265; Little v. United Investors Corporation, 157 Conn. 44, 48, 245 A.2d 567. In analyzing § 3.07 of the regulations in the light of these principles it is clear that the language clearly and unambiguously indicates the intent that § 3.07 is to be considered *163 only when "new" land in subdivisions is actually created in "block" form. It does not require that all newly developed land be divided into "blocks." In this regard, the regulation is not subject to modification by construction. Little v. United Investors Corporation, supra, 48; Hurlbut v. Lemelin, 155 Conn. 68, 73, 230 A.2d 36; State ex rel. Cooley v. Kegley, 143 Conn. 679, 683, 124 A.2d 898.
Whether § 3.07 is relevant to the present case depends upon whether a "block" has been created by the subdivision plan as submitted by Flower Estates. Words used in statutes and regulations "are to be construed according to their commonly approved usage." Klapproth v. Turner, 156 Conn. 276, 280, 240 A.2d 886. See Hartford Electric Light Co. v. Water Resources Commission, 162 Conn. 89, 100, 291 A.2d 721; State v. Cataudella,159 Conn. 544, 553, 271 A.2d 99; State v. Benson, 153 Conn. 209, 214, 214 A.2d 903. "Or, stated another way, statutory language is to be given its plain and ordinary meaning. State v. Taylor, 153 Conn. 72, 82, 214 A.2d 362." Klapproth v. Turner, supra, 280. Black, Law Dictionary (3d Ed.) defines "block" as "[a] square or portion of a city or town inclosed by streets .... The platted portion of a city surrounded by streets." Webster, Third New International Dictionary defines the word, inter alia, as "a usu. rectangular space (as in a city) enclosed usu. by streets but sometimes by other bounds (as rivers or railroads)." See Berndt v. City of Ottawa, 179 Kan. 749, 298 P.2d 262; Sports Center, Inc. v. City of Wichita, 176 Kan. 84, 269 P.2d 399; Harrison v. People ex rel. Boetter, 195 III. 466, 63 N.E. 191; Block, Words & Phrases (Perm. Ed.), 781-89, and cases cited therein.
*164 In the present case, the subdivision map does not depict the subdivision as creating any "block" as intended by § 3.07 of the regulations in the light of the commonly approved meaning of the word. The tract of land in question is bounded by streets only on three sideson the east by Cranbury Road, on the north by Partrick Avenue and on the west by Wolfpit Avenue. To the south the tract is bounded by privately-owned property which is not owned or controlled by Flower Estates; nor does Regency Drive, the proposed new street running approximately 2100 feet from Partrick Avenue to Wolfpit Avenue, enclose any of the tract so as to create a block. No block having been created, regulation § 3.07 requiring "blocks," only if in fact created, to be a certain minimum width and minimum and maximum length, is irrelevant to the present case and could not, a fortiori, be violated as the plaintiffs contend.
On October 11, 1973, Flower Estates filed a bill of exceptions claiming that there is no jurisdiction "since the appeal was not taken from the final authority on planning within the City of Norwalk." This issue is argued by Flower Estates in its brief. Since we have reached the conclusion that there is no error, there is no need to consider the bill of exceptions filed by this defendant. Hill v. Birmingham, 131 Conn. 174, 179, 38 A.2d 604; Podzunas v. Prudential Ins. Co., 125 Conn. 581, 586, 7 A.2d 657; Maltbie, Conn. App. Proc. § 288.
There is no error.
In this opinion the other judges concurred.
NOTES
[1] "[Norwalk Subdivision Regs., art. III § 3.01 (1968).] HAZARDOUS AREAS: Land shall not be subdivided if it is of such character that it cannot be safely used for building purposes because of danger to health, peril from fire, flood or other menace. Nor shall subdivisions be permitted which might increase the danger to health life or property, or aggravate the flood hazard."
[2] "[Norwalk Subdivision Regs., art. III § 3.07 (1968).] BLOCK WIDTH AND LENGTH: Blocks created by new subdivisions shall be at least 200 feet wide and at least 200' long but not more than 1200' long."
[3] General Statutes chapter 124 relates to zoning.
[4] General Statutes chapter 126 relates to municipal planning.
[5] See Akin v. Norwalk, 163 Conn. 68, 70, 301 A.2d 258.
[6] See footnote 2. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2452403/ | 552 S.W.2d 534 (1977)
WORLEY HOSPITAL, INC., Appellant,
v.
Sylvia CALDWELL et vir., Appellees.
No. 8500.
Court of Civil Appeals of Texas, Amarillo.
May 16, 1977.
*535 Anderson, Henley, Shields, Bradford & Pritchard; L. W. Anderson, Dallas, for appellant.
Buzzard, Comer & Buzzard, Ross N. Buzzard, Maguire & Vanderpool, Pampa, Stokes, Carnahan & Fields, Thomas D. Farris, Amarillo, for appellees.
ROBINSON, Justice.
This is a medical malpractice case in which the jury found that the operating room nurses were negligent in failing to make a correct sponge count. The case has been remanded by the Supreme Court so that this court may rule on the question of whether the jury's refusal to find that the nurses were borrowed employees of the surgeon, Dr. C. F. Sparger, was against the great and overwhelming weight of the evidence.
The relevant evidence is undisputed and reveals the common situation in which the nurses are employed by the hospital and instructed by a hospital manual covering the manner in which they are to perform their duties. The nurses testified that they were to follow the doctor's orders and the doctor testified that he was in charge, medically speaking, of the nurses.
The facts are set out more fully in the original opinion of this court, Worley Hospital, Inc. v. Caldwell, et vir, 529 S.W.2d 639 (Tex.Civ.App.Amarillo 1975), and in the opinion of the Supreme Court, Sparger v. Worley Hospital, Inc. et al., 547 S.W.2d 582 (Tex.1977). Dr. Sparger's testimony concerning his relationship with the nurses as well as the nurses' testimony in that regard is set out verbatim in Justice Johnson's opinion, dissenting from the opinion of the Supreme Court, 547 S.W.2d at 587-88.
The Supreme Court held that the facts do not show that, as a matter of law, the nurses were the borrowed servants of Dr. Sparger, and stated as follows:
Reasonable minds might differ as to the facts which presented the borrowed servant issue.
We have, therefore, reviewed the evidence in the light of the opinion of the Supreme Court.
We are mindful that the answer to the special issue before us involves a refusal or a failure to find a fact rather than an affirmative finding. Thus, no evidence was required to support the negative finding. The burden of proof on the issue was not on the defendant, Dr. Sparger. Further, the Supreme Court in effect has held that the testimony of Dr. Sparger, concerning his right to control the nurses in regard to medical aspects, is not a judicial admission that would as a matter of law make the nurses his borrowed servants "in watching after the lap packs."
*536 Nevertheless, the question for our determination is not one of law, but a fact question of the weight and preponderance of all of the evidence to be tested by the standard set out in In Re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951). After considering all of the evidence including that contrary to the verdict as well as that supporting the verdict, we are of the opinion that the jury finding that the nurses were not the borrowed servants of Dr. Sparger is not so against the great weight and preponderance of the evidence as to be manifestly unjust.
The judgment of the trial court is accordingly affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537385/ | 797 A.2d 738 (2002)
2002 ME 85
Zagonyi B. TUNGATE
v.
William D. GARDNER Jr.
No. Cum-01-613.
Supreme Judicial Court of Maine.
Submitted on Briefs: March 26, 2002.
Decided: May 29, 2002.
*739 Zagonyi B. Tungate, Falmouth, for plaintiff.
Mark E. Dunlap, Esq., John R. Veilleux, Esq., Norman, Hanson & DeTroy, LLC, Portland, for defendant.
Panel: SAUFLEY, C.J., and CLIFFORD, RUDMAN, DANA, ALEXANDER, CALKINS, and LEVY, JJ.
RUDMAN, J.
[¶ 1] Zagonyi Tungate appeals from the judgment entered in the Superior Court (Cumberland County, Mills, J.) dismissing her claim against William D. Gardner Jr. on res judicata grounds. Because we conclude that the first element of res judicata has not been satisfied, we vacate the judgment.
I. STATEMENT OF THE CASE
[¶ 2] In June of 1994, automobiles operated by Tungate and Gardner were involved in an accident in Falmouth. The *740 vehicle which Gardner was driving was insured by Allstate Insurance Company. Tungate rented a car while her own was being repaired. Apparently, Tungate submitted the bill for her rental car directly to Allstate which disputed the amount of these expenses and refused to pay. In November 1994, Tungate brought suit in small claims court against Allstate and two of its employees in order to recover her rental expenses. Gardner was never included as a party to this lawsuit, nor did Allstate file a responsive pleading.[1] Allstate appeared before the court and defended the suit. After a hearing, Tungate was awarded a final judgment in the amount of $577.80 plus costs.
[¶ 3] In April of 2000, Tungate brought this action against Gardner in the Superior Court for personal injury damages caused by the 1994 collision. Gardner filed a motion for a summary judgment in which he argued that, on account of the prior small claims judgment against Allstate, Tungate was precluded from bringing a personal injury suit against him. The court agreed and granted the motion on res judicata grounds. Tungate subsequently filed this appeal.
II. DISCUSSION
[¶ 4] Res judicata is a judicial doctrine which ensures that the same matter is not litigated more than once. Beegan v. Schmidt, 451 A.2d 642, 643-44 (Me.1982). "Its application is justified by concerns for judicial economy, fairness to litigants, and the stability of final judgments." Connecticut Nat'l Bank v. Kendall, 617 A.2d 544, 546 (Me.1992). Whether the trial court properly applied the doctrine of res judicata is a question of law which we review de novo. Goumas v. State Tax Assessor, 2000 ME 79, ¶ 5, 750 A.2d 563, 565.
[¶ 5] Under Maine law, res judicata may be invoked to bar the re-litigation of a dispute only if three elements are satisfied: "(1) the same parties or their privies are involved in both actions; (2) a valid final judgment was entered in the prior action; and (3) the matters presented for decision in the second action were, or might have been, litigated in the first action." Dep't of Human Servs. o/b/o Boulanger v. Comeau, 663 A.2d 46, 48 (Me.1995).
[¶ 6] Therefore, we must first determine whether the parties in the small claims suit were the same as those in the current suit. From a reading of the two complaints, it is clear that the named plaintiff is the same but the named defendants are different. This facial examination, however, is not dispositive. We have stated that a party
includes all persons who, though not nominally parties, but being directly interested in the subject-matter, have a right to make a defense, or to control the proceedings, and to appeal from the judgment of the court, which right also includes the right to adduce testimony *741 and cross-examine witnesses offered by the other side.
N.E. Harbor Golf Club. Inc. v. Town of Mount Desert, 618 A.2d 225, 227 (Me.1992) (quoting Huard v. Pion, 149 Me. 67, 69, 98 A.2d 261, 262 (1953)). Thus, we "look beyond the nominal parties of record to the real parties in interest." Arsenault v. Carrier, 390 A.2d 1048, 1050 (Me.1978).
[¶ 7] Tungate brought her small claims action directly against Allstate to recover rental expenses incurred as a result of the collision between her automobile and the automobile operated by Gardner, an insured of Allstate. However, the proper defendant to this suit was Gardner, the individual who allegedly committed the wrong. Although the statement of claim set forth a cause of action against Allstate, it was meritless because Tungate's claims that arose from the accident did not lie against the insurance company. In fact, we have stated that it is "proscribed practice in Maine to bring a direct action against an insurance company in a negligence case prior to final judgment, the only remedy being found in the `Reach and Apply' statute." Allen v. Pomroy, 277 A.2d 727, 730 (Me.1971); accord Richards v. State Farm Mut. Auto. Ins. Co., 252 Ga.App. 45, 555 S.E.2d 506, 507 (2001) ("Generally, a party not in privity of contract may not bring a direct action suit against the liability insurer of the party alleged to have caused damage absent an unsatisfied judgment against the insured, legislative mandate, or as permitted by a provision in the insurance policy in issue.").
[¶ 8] Thus, it is clear that an insurer and an insured are separate and distinct parties. Allstate was not obligated by the insurance policy to answer and defend the small claims suit and could have sought its dismissal if it chose to do so. Allstate's decision to the contrary did not somehow transform Gardner into a party. Gardner had no direct interest in the outcome of the suit, and he was not in a position to assert an argument or otherwise control the proceedings. Gardner cannot be considered a party to the small claims suit.
[¶ 9] Although we conclude that Gardner was not a party to the previous small claims suit, the first element of the res judicata analysis is satisfied if he was in privity with Allstate for purposes of that suit. "[P]rivity is created when two or more persons have a mutual or successive relationship to the same rights of property." N.E. Harbor Golf Club, Inc., 618 A.2d at 227. We have also stated that the "privity relationship generally involves a party so identified in interest with the other party that they represent one single, legal right." Comeau, 663 A.2d at 48. Also, "substance over form controls the inquiry into whether privity will be found." N.E. Harbor Golf Club, Inc., 618 A.2d at 227.
[¶ 10] The insurance policy that covered Gardner states:
We [Allstate] will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto."
....
We have the right and duty to defend any "suit" asking for such damages ....
Thus, when Gardner is sued for damages that are covered by the policy, Allstate is ultimately responsible for any judgment against him within the policy limits. In such situations, Allstate and Gardner share a mutuality of interest and, consequently, are in privity with each other.
[¶ 11] This case, however, presents a very different set of facts. Tungate *742 brought her small claims suit directly against Allstate to recover damages directly from Allstate. Under these circumstances, Gardner had absolutely no direct interest tied to Allstate's success. Because Gardner did not have a stake in the outcome of the small claims suit, we cannot say that he was in privity with Allstate for purposes of that suit.
[¶ 12] Accordingly, Gardner failed to establish the first element needed to invoke the doctrine of res judicata. We need not reach the remaining two elements of the analysis.
The entry is:
Judgment vacated.
NOTES
[1] A responsive pleading is not required in a small claims proceeding. M.R.S.C.P. 3(b). However, it is permitted, and it may raise a defense such as failure to state a claim. Allstate's insurance policy states:
No one may bring a legal action against us under this Coverage Form until:
....
b. Under Liability Coverage, we agree in writing that the "insured" has an obligation to pay or until the amount of that obligation has finally been determined by judgment after trial. No one has the right under this policy to bring us into an action to determine the "insured's" liability.
However, there is no indication from the record that Allstate agreed, in writing, that Gardner was at fault and thus liable for any damages. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537436/ | 797 A.2d 489 (2002)
Spencer POTTER
v.
Mary CRAWFORD, in her capacity as Treasurer of the Town of Jamestown.
No. 2001-94-APPEAL.
Supreme Court of Rhode Island.
May 24, 2002.
*490 *491 Present WILLIAMS, C.J., LEDERBERG, BOURCIER, FLANDERS, and GOLDBERG, JJ.
Kenneth R. Tremblay, Portsmouth, for plaintiff.
Herbert F. DeSimone, Jr., Providence, for defendant.
OPINION
PER CURIAM.
In this case alleging the taking of riparian rights, Spencer Potter (the plaintiff) appeals from the entry of summary judgment in favor of the defendant, Mary Crawford, in her capacity as treasurer of the Town of Jamestown (the town). After reviewing the record of the summary judgment before us, we conclude from our de novo review[1] that the trial justice did not err in granting the town's motion.
The following facts essentially are undisputed. In 1992, the town sought permission to make repairs to its West Ferry Wharf in Jamestown (the project) from the Coastal Resources Management Council (CRMC). The town property abutted the plaintiff's property and, in October 1992, the plaintiff objected to the proposed construction project, asserting that it infringed upon his riparian rights. The CRMC continued the matter pending a determination of the validity of the plaintiff's assertion.
Meanwhile, the chairman of the Jamestown Harbor Management Commission (JHMC), Donald Armington (Armington) approached the plaintiff to discuss the plaintiff's objections to the proposed project. After meeting twice with the plaintiff, Armington wrote to the plaintiff confirming that "you indicated that you would give your consent to proceeding with the * * * Project as long as your riparian rights are protected and certain considerations are met by written agreement with the Town." One of those "considerations" was the plaintiff's request for a free outhaul space at the town's West Ferry Wharf.[2] Later, the CRMC was informed that the riparian rights conflict between the plaintiff and the town had been resolved and it granted the town's project application on October 27, 1992.
In June 1993, the plaintiff reduced the oral agreement to writing in the form of a lease between lessor and lessee, and sent it to Armington for approval. Armington faxed the proposed agreement back to the plaintiff together with a cover sheet stating:
"Document OK, except that it must be an agreement (not lease) between riparian owner and town * * * Also, owner and town (not JHMC) must agree."
Meanwhile, some residents expressed their objection to the agreement at a JHMC meeting. Subsequently, on February 24, 1994, the town notified the plaintiff that it would not sign the proposed agreement. The plaintiff then filed the instant action seeking specific performance of the agreement and the removal of the pilings, steel cables and stone fill that the town had *492 placed over waters within his riparian boundaries.
The town later filed a motion for summary judgment, contending that Armington lacked both actual and apparent authority to bind the town to the oral agreement. It additionally asserted that theplaintiff would be unable to prove interference with his riparian rights because, in his deposition testimony, he admitted that the wharf did not interfere with his ability to navigate the waters in front of his property. He also stated that his shoreline actually benefited from the construction. The plaintiff countered by averring that although he never specifically had been told that Armington had the authority to contract on behalf of the town, Armington appeared to have such authority and the town should be estopped from so denying. In addition, the plaintiff contended that there were genuine issues of material fact about whether the town had infringed upon his riparian rights.
After a Superior Court hearing justice reviewed the parties' arguments and their accompanying memoranda, he granted the town's motion. He found that Armington neither had actual authority nor apparent authority to bind the town and that because the plaintiff agreed to the project, he could not now object to its implementation. The plaintiff timely appealed.
After a pre-briefing conference, the parties were ordered to appear and show cause why the issue raised in this appeal should not be summarily decided. They did appear, but failed to show cause. Accordingly, we proceed to summarily decide the plaintiff's appeal.
The plaintiff first contends that Armington had apparent authority to bind the town through his oral agreement with the plaintiff. We reject the plaintiff's assertion that a municipality may be bound by the actions of a public agent who possesses only the apparent authority to do so. That is because "the authority of a public agent to bind a municipality must be actual * * *." Casa DiMario, Inc. v. Richardson, 763 A.2d 607, 610 (R.I.2000) (quoting Warwick Teachers' Union Local No. 915 v. Warwick School Committee, 624 A.2d 849, 850-51 (R.I.1993)). "Consequently, any representations made by such an agent lacking actual authority are not binding on the municipality * * *." Casa DiMario, Inc., 763 A.2d at 610 (quoting School Committee of Providence v. Board of Regents for Education, 429 A.2d 1297, 1302 (R.I.1981)).
The undisputed evidence demonstrates that Armington did not possess actual authority to bind the town to an agreement with the plaintiff. Not only does the Jamestown Code of Ordinances specifically limit Armington's powers as chair of the JHMC to "calling and conducting all meetings of the commission[,]" but Armington himself also informed the plaintiff that the agreement must be with the town, not JHMC.
The plaintiff's assertion that the town should be estopped from denying that Armington and the JHMC had the authority to enter into an agreement with him, likewise, must fail. That is because "[e]stoppel against a [public entity] * * * must be predicated upon the acts or conduct of its officers, agents or official bodies acting within the scope of their authority." Romano v. Retirement Bd. of the Employees' Retirement System of Rhode Island, 767 A.2d 35, 42 (R.I.2001) (quoting Ferrelli v. Department of Employment Security, 106 R.I. 588, 592-93, 261 A.2d 906, 909 (R.I.1970)). "[A]ny party dealing with a municipality `is bound at his own peril to know the extent of its capacity.'" Casa DiMario, Inc., 763 A.2d at 612 (quoting *493 Vieira v. Jamestown Bridge Commission, 91 R.I. 350, 358, 163 A.2d 18, 23 (1960)). "[A] person's failure to discover the true scope of a government agent's actual authority will not provide any grounds to relieve that person's detrimental reliance upon the agent's representations or actions." Romano, 767 A.2d at 43. See also 12 Williston on Contracts § 35:63 at 509 (1999).
As previously stated, Armington did not have actual authority to enter into an agreement with the plaintiff; therefore, he was not acting within the scope of his authority when he made said agreement.Consequently, the fact that the plaintiff merely assumed that Armington possessed such authority will not provide him with any grounds for relief under an estoppel theory against the town.
The next issue we must address is whether the town's construction project infringed upon the plaintiff's riparian rights. The trial justice denied this claim, finding that by assenting to the project before reaching an agreement with the town, the plaintiff was bound by that assent and could not now complain. The plaintiff asserts that his assent was predicated upon his agreement with Armington and should not be considered as a basis for denying him his riparian rights. Because we conclude that the plaintiff has not been deprived of his riparian rights, we need not address whether the plaintiff was bound by his assent.[3]
Under the riparian rights doctrine, "a riparian land owner possesses a common-law right to wharf out." Town of Warren v. Thornton-Whitehouse, 740 A.2d 1255, 1260 (R.I.1999). As noted and defined in Clark v. Peckam, 10 R.I. 35, 38 (1871), "while the shore itself, and the space between the high and low water mark is public for passage, the riparian owner has a right of access to the great highway of nations of which he cannot be deprived." Specifically, "the riparian land owner has the right to construct whatever wharf or dock is necessary to gain access to navigable waters, [' the great highway of nations' ] as long as such construction does not interfere with navigation or the rights of other riparian land owners." Thornton-Whitehouse, 740 A.2d at 1260. The plaintiff asserts, and the town concedes, that the town infringed upon his "riparian boundaries." However, the record reveals that he presented no evidence to indicate that his ability to wharf out or to navigate the waters in front of his property thereby had been affected. Indeed, in his deposition testimony, the plaintiff admitted thathis ability to navigate in or around his shoreline had not been obstructed by the town's project, and at no point in this case has he suggested that his ability to wharf out has been affected. Consequently, we conclude that even if his "riparian boundary" had been infringed upon, there was no showing that his "riparian rights" in fact had been adversely affected despite that infringement.
For the foregoing reasons, the plaintiff's appeal is denied and dismissed. The papers in this case are remanded to the Superior Court.
NOTES
[1] See Marr Scaffolding Co. v. Fairground Forms, Inc., 682 A.2d 455, 457 (R.I.1996).
[2] The town rents outhaul spaces on its wharf from which boats can be launched and taken out of the water for repair, storage etc. The plaintiff asserts that Armington agreed, on behalf of the town, to provide him with a rent-free outhaul space.
[3] See Allstate Insurance Co. v. Lombardi, 773 A.2d 864, 877 (R.I.2001) (noting that "[t]his Court certainly has the prerogative to affirm a decision made by a trial justice on grounds different from those relied upon by the trial justice"). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537513/ | 355 A.2d 923 (1976)
STATE of Maine
v.
Edward J. McCARTHY, Jr.
Supreme Judicial Court of Maine.
April 22, 1976.
*924 Frank F. Harding, Dist. Atty., Belfast, for plaintiff.
Richard M. Dostie, Belfast, for defendant.
Before DuFRESNE, C. J., and WEATHERBEE, POMEROY, WERNICK and ARCHIBALD, JJ.
ARCHIBALD, Justice.
The defendant was indicted, tried in the Waldo County Superior Court before a jury and convicted of breaking, entering and larceny in the nighttime,[1] and has appealed.
We deny the appeal.
Appellant premises his appeal on three claims of error which we will consider in the sequence argued.
I
After the case had been submitted to the jury, the presiding Justice was handed this note from the foreman of the jury:
"Your Honor, was there supposed to be a pair of gloves in the box of evidence?"
The Justice advised counsel of the receipt of this note and a colloquy ensued during which the defendant was present. It was then agreed that the Justice respond as follows:
"Mr. Foreman, the answer to your inquiry, there was not a pair of gloves in the box of evidence, nor is there any testimony during the trial as to any gloves."[2]
Shortly after receiving this response the jury returned its guilty verdict. An examination of the box then revealed a "brown envelope containing a pair of brown woolen leather-faced gloves."
Appellant promptly filed a motion for a mistrial on which a hearing was held. In summary, it was established that, among other exhibits, these gloves were taken from the appellant at the County Jail shortly after he was arrested. They were placed in a sealed box kept secured by a clerk in the District Court until the exhibits were brought into the Superior Court for use in the defendant's trial.[3] When the other exhibits had been properly identified and admitted, they were put in a plastic bag, replaced in the same box and given to the jury when it retired to deliberate. No evidence was offered at trial which had any connection with the use, or non-use, of gloves.
After considering all of the evidence, the Court denied the motion for a mistrial, stating,
"this Court is satisfied that there was no prejudice to the defendant in thisthis *925 pair of gloves being in the box which went to the jury."
Appellant agrees that the granting of a motion for a mistrial is addressed to the sound discretion of a presiding Justice and will not be disturbed absent an abuse of that discretion. State v. Hachey, 278 A.2d 397 (Me.1971). We conceive the test to be applied to the ruling of the Justice below is whether, on these facts, there was a reasonable possibility that the inadvertent submission of the gloves to the jury might have been a contributing factor productive of the guilty verdict. See Fahy v. State of Connecticut, 375 U.S. 85, 84 S. Ct. 229, 11 L. Ed. 2d 171 (1963).
Appellant relies on Bowers v. Coiner, 309 F. Supp. 1064 (S.D.W.Va.1970), and Farese v. United States, 428 F.2d 178 (5th Cir. 1970).
The facts before us and those enumerated in Bowers and Farese are readily distinguishable.
In Bowers a gun had been excluded as an exhibit but, nevertheless, the prosecutor was permitted to refer to this gun in his argument and the presiding Justice allowed the gun to be taken into the jury room while the jury was deliberating. Since the use of a gun had a direct bearing on Bowers' guilt, it was clear that a reasonable possibility existed that the permitted use of excluded evidence might have contributed to the conviction and, therefore, it was held that allowing the gun in the jury room was error.
In Farese a briefcase containing the defendant's laundry was admitted and the jury discovered $750.00 in bills of large denomination in the pocket of a freshly laundered shirt. In sustaining an appeal, the Court noted:
"It takes no fanciful flight, however, to perceive the strong probability of prejudice to the defendant then on trial upon a charge involving unlawful monetary gain."
In Bowers and Farese it is clear that the gun and the $750.00 bore such a nexus to other inculpatory testimony as to give the testimony additional probative value. In the instant case there was no such proven nexus between the gloves and the other facts. In short, the "reasonable possibility" test was met in both Bowers and Farese but is not met on the facts in this record. United States by Staples, 445 F.2d 863 (5th Cir. 1971), cert. denied 404 U.S. 1048, 92 S. Ct. 710, 30 L. Ed. 2d 739; see also United States v. Allison, 481 F.2d 468 (5th Cir. 1973); Paz v. United States, 462 F.2d 740 (5th Cir. 1972).
This point of appeal is without merit.
II
Appellant has argued that the police seizure of his boots at the County Jail was improper.
Shortly after midnight on April 27, 1974, the appellant was observed by a Belfast police officer who determined that he was intoxicated. After the appellant had refused an opportunity to be taken home and insisted on returning to a nearby tavern, the officer arrested him for being found intoxicated in a public place. Having done so, the officer searched the appellant and found a screwdriver concealed under his clothing, as well as a fairly large quantity of coins. The officer took possession of these items and transported the appellant to the County Jail where he was booked for public intoxication and possession of burglary tools. During this process his shoes were removed at the suggestion of the Chief of Police and given to another officer for the reason that "those were the type of heel mark that we had been looking for." The officer's attention had been attracted to these shoes because of the manner in which the appellant was sitting, with his "foot up."
*926 At the time the boots were seized the officers were unaware that the criminal act alleged in the indictment had been committed. However, later in the morning this particular crime came to their attention and an investigation ensued. The locus of the crime was approximately two hundred yards from where the appellant had been arrested. On investigation of the crime scene two footprints were discovered which compared favorably with the shoes taken from the appellant.
If we understand appellant's position correctly, he is arguing that because the police had no knowledge of the alleged crime when the boots were seized, no probable cause existed for their seizure.
Appellant's position cannot be sustained.
At the time of the seizure the appellant was under lawful arrest and in police custody. Whether taking the boots be characterized as a pre-incarceration seizure or one made in conjunction with a lawful arrest is unimportant since in neither event does the seizure violate any State or federal constitutional sanctions. State v. Dubay, 313 A.2d 908 (Me.1974); see also State v. Dubay, 338 A.2d 797 (Me.1975).
We have held that fingerprinting a person in lawful custody for purposes of latent comparison is not constitutionally proscribed. State v. Inman, 301 A.2d 348 (Me.1973). We see no rational distinction between fingerprinting a lawfully arrested person and taking a pair of shoes from such a person, both acts being for purposes of latent comparison.
Additionally, the boots were in plain view. It is hardly necessary to cite authority for the proposition that property subject to seizure which falls within the plain view of police officers may be seized. State v. Mosher, 270 A.2d 451 (Me.1970).
The fact that the police were unaware of the criminal violation when the boots were seized is not controlling. Police action is not subject to rigid logistic standards but is allowed that degree of flexibility necessary to meet the reactions of suspects subject to police detention.
A case factually similar to the instant case was recently decided in Connecticut. Noting the suspicious conduct of certain individuals, the police apprehended them and credit cards bearing a given name, being in plain view, were seized by the police. Thereafter it was discovered that a robbery had been committed during which these credit cards had been stolen. Under the plain view doctrine announced in Coolidge v. New Hampshire, 403 U.S. 443, 91 S. Ct. 2022, 29 L. Ed. 2d 564 (1971), the Connecticut Court held that the credit cards thus seized were admissible in the robbery trial, even though the seizure was prior to any police knowledge of the crime. State v. Watson, 165 Conn. 577, 345 A.2d 532 (1973), cert. denied, 416 U.S. 960, 94 S. Ct. 1977, 40 L. Ed. 2d 311 (1974).
The boots were properly admitted in evidence.
III
Appellant correctly preserved for appellate review the sufficiency of the evidence to support a conviction.
Appellant was arrested within two hundred yards of the structure broken into, having then in his possession a screwdriver and a particularly unique coin, both of which the owner of the building specifically identified. The appellant's footprints matched those found on the ground in close proximity to a window which had been broken for purposes of entry. Additionally, a large amount of coins, some loose and some in rolls, had been stolen and comparable amounts were found in the possession of the appellant. These facts clearly fall within the now well accepted *927 rule that when one is found in recent and exclusive possession of stolen goods, a jury operates permissibly by returning a guilty verdict. State v. Gove, 289 A.2d 679 (Me. 1972).
The appellant's third point of appeal is without merit.
The entry is:
Appeal denied.
DELAHANTY, J., sat at argument but did not participate further in the case.
All Justices concurring.
NOTES
[1] 17 M.R.S.A. § 2103.
[2] The procedure adopted by the Justice below fully conforms to the recent holding of the United States Supreme Court in Rogers v. United States, 422 U.S. 35, 95 S. Ct. 2091, 45 L. Ed. 2d 1 (1975).
[3] The deputy clerk in the District Court was a witness and identified this box which was marked State's Exhibit 11. It was actually offered and admitted without objection. It is apparent that neither the prosecutor nor defense counsel knew the gloves were within this box at the time, despite the fact that both had ample opportunity to inspect it. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537631/ | 142 B.R. 997 (1992)
In re MULBERRY PHOSPHATES, INC. f/k/a Royster Company, et al., Debtors.
Bankruptcy Nos. 91-7012-8P1 to 91-7014-8P1.
United States Bankruptcy Court, M.D. Florida, Tampa Division.
July 1, 1992.
William Rochelle, New York City, John K. Olson, Tampa, Fla., for debtors.
Mark D. Silverschotz, New York City, for creditors committee.
ORDER ON SECOND APPLICATION OF FULBRIGHT & JAWORSKI FOR COMPENSATION AND REIMBURSEMENT OF EXPENSES AND OBJECTION TO SAME BY SUPERFOS A/S AND SUPERFOS INVESTMENTS LIMITED
ALEXANDER L. PASKAY, Chief Judge.
THIS CAUSE came on for hearing with notice to all parties of interest, upon the Second Application of Fulbright & Jaworski (Law Firm), counsel of record for Mulberry Phosphates, Inc., f/k/a Royster Company, et al., (Debtors), for Compensation and for Reimbursement of Expenses. The Law Firm seeks an interim allowance of fees in the amount of $730,468.50 for services rendered to the Debtors and reimbursement of expenses in the amount of $112,279.54 covering the time period of August 1, 1991 through November 30, 1991.
The Application of the Law Firm is challenged by Superfos A/S and Superfos Investments Limited (Superfos), which alleges that the Law Firm should be disqualified from serving as counsel for the Debtors; that the Law Firm's representation of the Debtors should be terminated; that the Law Firm's representation of insiders and affiliates of the Debtors should be terminated; and that the Law Firm should be required to disgorge all compensation, reimbursements and retainers it received in connection with these Chapter 11 cases.
In support of its claims, Superfos contends that the Law Firm was not and is not *998 a "disinterested person" as required by § 327 of the Bankruptcy Code and in fact, according to Superfos, represents interests adverse to the creditors of the estate. The central thrust of the proposition advanced by Superfos is based on the fact that in addition to representing the Debtors, the Law Firm also represented, and is still representing, Erol Beker and Franz Beker, principals of the Debtors and Royster Phosphates, Inc. (RPI), a wholly-owned subsidiary of Mulberry Phosphates, Inc., (Mulberry). It is also contended by Superfos that the Law Firm also represents Wingate Creek Acquisition Corp. (Wingate), Gulf Atlantic Corporation (GAC), Nu-Gulf Industries (Nu-Gulf), and Tectrade International Ltd. (Tectrade), and all of these entities potentially have an interest adverse to the interests of the general estates of the Debtors.
The relationship between these parties was fully treated by this Court on a previous Motion filed by Superfos seeking the appointment of a Trustee or, in the alternative, an Examiner. It is sufficient to state for the purpose of the matters under consideration that several of these entities, as noted earlier, have claims against or at least asserted interests adverse to the interests of the Debtors. Superfos also contends that Mulberry possibly may have fraudulent conveyance claims against one or more of these entities arising out of its "advance" of $3 million to RPI. It should be noted that at the time Superfos filed its Objection, RPI was not a debtor under the protection of the Bankruptcy Court, but since has filed its own Chapter 11 Petition in this Court.
In a nutshell, Superfos alleges that because the Law Firm represents all these entities who have conflicting interests, it will be in the impossible position of representing the Debtors and at the same time dealing with these reorganization cases in the objective and detached manner required by an attorney representing a debtor in a Chapter 11 case. Superfos also alleges that the Law Firm never fully disclosed its relationship with these entities on its verified statement filed pursuant to F.R.B.P. 2014 accompanying the Debtors' application to employ the Law Firm.
In opposition, the Law Firm contends that it could not disclose its connections with RPI, Nu-Gulf, Wingate, GAC, Beker and Tectrade because the Law Firm was retained by these parties post-petition and that it disclosed its affiliations with these parties when it filed its first and second fee applications. Further, the Law Firm contends that its representation of Beker and Tectrade is limited to representation solely in connection with a dispute with Sameer Y. Zahr over ownership of Wingate stock.
Section 327(a) of the Bankruptcy Code provides that a debtor may employ attorneys "that do not hold or represent an interest adverse to the estate and that are disinterested persons . . ." F.R.B.P. 2014 provides that the attorneys to be employed by the debtor must file a verified statement setting forth their connections with the debtor.
It is well established that before counsel may be disqualified, the record must support the finding that a conflict exists sufficient to prohibit the attorney's representation of the debtor. Depending upon the facts of the case, a potential conflict alone may be insufficient to warrant disqualification. In re Vanderbilt Associates, Ltd., 117 B.R. 678 (D.Utah 1990); In re OPM Leasing Services, Inc., 16 B.R. 932 (Bankr.S.D.N.Y.1982). Further, the mere existence of inter-company claims between several entities may be insufficient alone to warrant disqualification. In re International Oil Co., 427 F.2d 186 (2nd Cir.1970); § 327(c). In fact, it is quite common for a single law firm to represent a parent company and all its subsidiaries either when they are all debtors or when only the parent is a debtor. There is no question that the Court has discretion in determining whether to deny fees to counsel. In re Ochoa, 74 B.R. 191 (Bankr.N.D.N.Y.1987). Considering all relevant factors of this case, this Court is satisfied that the Objection must be overruled for the following reasons.
First, it is interesting to note that the Official Creditors' Committee and the Bank Group, the major players in these significant Chapter 11 cases, strongly oppose Superfos' *999 Objection. The U.S. Trustee has objected to certain aspects of the Fee Application submitted by the Law Firm but does not seek disgorgement of fees or disqualification of the Law Firm.
The positions of these groups is important and persuasive and weighs heavily in favor of denying Superfos' request to disqualify the Law Firm at this late stage of these Chapter 11 cases. There is hardly any question that the removal of the Law Firm at this time would not only impede the progress of these Chapter 11 cases, but also would generate additional administrative expenses and certainly delay confirmation of the Debtors' plan as a new law firm came "up to speed." There is no question that the Law Firm is intimately familiar with the affairs of the Debtors and disqualifying them at this point would severely prejudice not only the Debtors but also the creditors involved in these Chapter 11 cases. This record lacks persuasive proof that the Law Firm should be removed or should disgorge all payments received and forfeit all rights to future allowances. Based on the foregoing, this Court is satisfied that the Objections filed by Superfos are without merit.
This leaves for consideration the determination of a reasonable fee for services rendered and reasonable costs incurred. Upon consideration of the Application, together with the record, this Court finds that a reasonable fee for services rendered during the applicable time period is $675,000.00 and reasonable costs incurred are $18,294.38. In allowing the foregoing fees and costs, this Court has considered 11 U.S.C. § 330, and each of the factors that govern the reasonableness of fees as set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir.1974), which was made applicable to bankruptcy cases in In re First Colonial Corp. of America, 544 F.2d 1291 (5th Cir.1977), cert. denied, 431 U.S. 904, 97 S.Ct. 1696, 52 L.Ed.2d 388 (1977). Findings of fact regarding these awards have been omitted in the interest of brevity, but will be prepared and filed at the request of any party in interest, if received by this Court within ten (10) days after the date of the entry of this Order. Accordingly, it is
ORDERED, ADJUDGED AND DECREED that the Application is hereby approved, the Objection is overruled, and a reasonable fee for services rendered during the applicable time period by the Law Firm is hereby determined to be $675,000.00 and reasonable expenses incurred during the relevant time period are hereby determined to be $18,294.38. Therefore, the Law Firm is entitled to an administrative expense in the amount of $63,294.38. It is further
ORDERED, ADJUDGED AND DECREED that this Court will prepare findings of fact regarding the award of fees and costs upon the request of a party in interest, provided such request is filed within ten (10) days of the date of the entry of this Order.
DONE AND ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537632/ | 140 N.J. Super. 126 (1976)
355 A.2d 674
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
BRUCE MERGOTT AND CARL ECKHART, DEFENDANTS-APPELLANTS.
Superior Court of New Jersey, Appellate Division.
Argued October 27, 1975.
Decided January 28, 1976.
*128 Before Judges CARTON, CRAHAY and HANDLER.
Mr. Ralph J. Jabbour, Designated Counsel, argued the cause for appellants (Mr. Stanley C. Van Ness, Public Defender, attorney).
Mr. Michael A. Graham, Deputy Attorney General, argued the cause for respondent (Mr. William F. Hyland, Attorney General of New Jersey, attorney).
The opinion of the court was delivered by HANDLER, J.A.D.
Defendants Bruce Mergott and Carl Eckhart were charged in an indictment for the rape of N.M., in violation of N.J.S.A. 2A:138-1, and with assaulting M.S. with intent to kill, in violation of N.J.S.A. 2A:90-2. After a long jury trial defendants were convicted of both charges. A codefendant was convicted of rape. Defendant Mergott brought a motion for a new trial which was denied. Thereafter, both defendants were sentenced to 10 to 15-year terms on the rape convictions and to consecutive 2 to 5-year terms on the assault with intent to kill convictions. Both appealed their convictions.
At the close of the State's case, defendant Eckhart's motion for a judgment of acquittal on the charge of assault with intent to kill was denied. Defendant Eckhart renewed his motion at the close of the trial and Mergott made a similar motion; both were denied. These rulings are claimed by defendants to have been in error.
*129 Resolution of this issue calls for a rather careful recapitulation of the evidence. This showed that at approximately 8 or 9 P.M. on August 18, 1971 M.S. and N.M. were at the New Jersey side of the George Washington Bridge hitchhiking to M.S.'s home in Wisconsin. They were picked up by a car containing defendants Mergott and Eckhart, Richard Probst (who had originally been a defendant) and Linda Huley. The people in the car offered M.S. and N.M. a place to stay for the night. They drove to a house belonging to Richard Probst's father. There M.S. and N.M. were given food and a room to sleep in. N.M. went to bed first, followed by M.S. about 30 minutes later.
From this juncture the State and defense versions of events diverge radically. Defendants claimed that N.M. told Mergott that she wanted to "ball" (i.e., have sex) with several of the men in the house, but that she didn't want M.S. to know what was going on. The State's theory was that N.M. was repeatedly raped.
M.S. testified that at 3:00 or 3:30 in the morning he was dragged from the bed he shared with N.M. by defendants Eckhart and Mergott. His hands were forced behind his back and Eckhart poked at him with a hunting knife. Someone said, "We want the girl." He was then blindfolded and led down to the basement by Probst and Eckhart. Because of the poor blindfolding job he was able to see N.M. yanked naked from the bed.
When the men first burst into the room N.M. screamed. Eckhart told M.S. to shut her up or he would kill him. As he was being led away M.S. was repeatedly told that he wouldn't get hurt unless he tried to be a hero, but that if he did try, he'd be a dead hero. Both defendants made threats.
M.S., who was naked, having gone to bed with no clothes on, was taken to the basement, tied up and placed on the floor. He was kicked and beaten by Probst when he refused to show appreciation for the record album Probst was *130 playing. M.S. was told that the people in the house were all members of a motorcycle gang called the Pagans and that the Pagans would get him if he didn't watch himself.
After a time defendant Mergott came downstairs and asked "Who's next to play with the girl? Who's next to plug N.?" There was also talk from Eckhart about cutting off one of M.S.'s fingers or an ear so that he would remember not to go to the police.
After a passage of time codefendant Catalano (not an appellant here) entered. N.M., wrapped in a blanket, was then brought downstairs. In M.S.'s presence Catalano had intercourse with N.M. and then demanded that she perform fellatio on him, threatening her with anal rape if she did not comply. N.M. acquiesced.
N.M. testified that after M.S. was taken downstairs she was raped by defendant Mergott and forced to perform an act of fellatio on him. She was mistreated in identical fashion by defendant Eckhart. She testified that she acquiesced in the sexual activity solely from fear and that she tried to talk both defendants out of raping her, promising not to go to the police if they left her alone. Both defendants had knives.
After Catalano finished with N.M., M.S.'s hands were untied and he was told to go gather his belongings. Upstairs, M.S. took a couple of letters from a dresser top, in order to have a record of the address.
N.M. and M.S. were warned that defendants had their addresses and that if they went to the police the Pagans or their Hell's Angels affiliates would find them and "get" them. Everyone then went to sleep in the basement.
Later that morning N.M. woke M.S. up, and John, one of the people in the house, told M.S. and N.M. to leave, giving them directions to the highway. In town they flagged down a police car and told their stories. Later that day they identified defendants.
*131 M.S.'s injuries consisted of 10 to 12 small scratches none deep enough to draw blood on his back where he had been poked with a knife or knives.
Other state witnesses testified that both defendants were armed with knives. Only one witness other than defendants themselves offered testimony in support of defendants' position. Peter Muti testified that he was at the house that early morning and saw N.M. walk out of the bathroom nude while defendant Mergott had his arms around her. Muti testified further that he heard Mergott ask N.M. if she was willing to go along with "this so-called fun thing" and that N.M. answered, "Yeah."
Probst, originally a defendant, testified that defendant Eckhart, at one point, removed an ax from one of the backpacks M.S. and N.M. had been carrying and began talking about "chopping them up."
Defendants testified that their initial desire to have sex with N.M. cooled because they thought she might have a disease; hence, they only let her perform oral sex and that only at her urging.
A trial judge must enter a judgment of acquittal, whether at the end of the State's case or at the conclusion of the entire case where, after viewing the relevant evidence in its entirety and giving the State the benefit of all reasonable inferences to be drawn therefrom, he finds that a reasonable jury could not find guilt beyond a reasonable doubt. State v. Reyes, 50 N.J. 454, 458-459 (1967). In reviewing a decision of the trial court on this question, this court is governed by that same standard. State v. Moffa, 42 N.J. 258, 263 (1964).
From our review of the record we are satisfied that the evidence adduced at trial was not sufficient to establish that defendants assaulted M.S. with the intent to kill him, within the purpose and meaning of N.J.S.A. 2A:90-2. The constituent elements of the statutory crime are an assault and an intent to kill. The intent to kill must be concomitant *132 and contemporaneous with the assault. See State v. Barker, 68 N.J.L. 19, 25-26 (Sup. Ct. 1902). The intent to kill must also relate directly to the assault and in that sense be the actuating cause of the assault. Otherwise stated, the natural object of the assault and indeed its very purpose must be the death of the victim.
The reported cases arising out of offenses found to have been committed in violation of N.J.S.A. 2A:90-2 suggest strongly that the assault must be deadly in purpose, that is, be actuated by and accompanied by a present intent to kill the victim. The intent must be one to kill immediately and by means of the assaultive behavior. For that reason the assault itself, though not eventuating in the death of the victim, is usually deadly in character. Many of the cases involve, for example, the firing of a gun. See, e.g., State v. Leibowitz, 22 N.J. 102 (1956); State v. Petrucelli, 98 N.J.L. 903 (E. & A. 1923); State v. Centalonza, 18 N.J. Super. 154 (App. Div. 1952); State v. Gallagher, 83 N.J.L. 321 (Sup. Ct. 1912).
An assault with intent to kill entails conduct which has surpassed the preparatory or attempt phase of criminality. As such, it must be characterized by assaultive behavior intended presently and contemporaneously to kill. Thus, in State v. Still, 112 N.J. Super. 368 (App. Div. 1970), certif. den. 57 N.J. 600 (1971), the court concluded that an assault with intent to commit sodomy involved greater proximity to completion of the offense than did an attempt to commit sodomy. 112 N.J. Super. at 371; Cf. State v. Blechman, 135 N.J.L. 99, 102 (Sup. Ct. 1941). Hence, while assault with intent to commit a particular crime encompasses an attempt to do so, attempt as such does not necessarily include an actual assault with criminal intent.
In Commonwealth v. Clopton, 447 Pa. 1, 289 A.2d 455 (Sup. Ct. 1972), this distinction was drawn. Defendant there was acquitted of the charge of assault with intent to kill, the court noting that the assault statute
*133 * * * was clearly inapposite herein since the superficial injuries (ones certainly not dangerous to life) sustained by Rimer [from the blows with the shotgun] were not inflicted with the intent to commit murder, but merely to force him to the place where such a homicidal wound could be inflicted. [447 Pa. at 4, 289 A.2d at 456]
It seems reasonably clear from the evidence that defendants did not intend contemporaneously to kill M.S. when they "assaulted" him. While there was ample evidence that M.S. was assaulted, the proofs did not establish that at the time M.S. was assaulted, defendants then intended to kill him.
The State argues that should the convictions for assault with intent to kill be reversed, this court ought to find defendants guilty of the lesser included offense of assault with a dangerous weapon. That course of action, however, would not be appropriate in this case. Defendant was not charged with the offense now suggested by the State and that crime is not necessarily included in the offense for which he was charged. More importantly, the jury, not having had the opportunity to do so, did not determine him to be guilty of the other offense. Cf. State v. McCoy, 114 N.J. Super. 479 (App. Div. 1971).
Accordingly, the convictions of the defendants of the crimes of assault with intent to kill are reversed. It is unnecessary, in light of this determination, to address the additional argument for reversal on the ground that the trial judge erroneously denied defendant Mergott's new trial motion on the charge of assault with intent to kill and that the verdicts thereon were contrary to the weight of the evidence.
It is further contended that the trial court denied erroneously defendants' motions for a new trial on the charge of rape. Defendants emphasize, in support of this argument, the lack of medical evidence and the incredibility of the testimony of the victim.
The absence of medical evidence as bearing upon the rape was not crucial. It did not in any degree diminish *134 the abundant evidence of the commission of rape upon which the jury concluded beyond reasonable doubt that defendants were guilty of this charge. The testimony of the victim, moreover, was not inherently unbelievable. Its evaluation was clearly for the jury.
Other points are raised by defendants pro se. It is asserted that Probst should not have been allowed to testify because he was unreliable. It is also claimed that there was an improper identification of defendants at police headquarters. These arguments we find devoid of merit.
Finally, it is argued that the sentences imposed were manifestly excessive. In view of our reversal of the convictions of assault with intent to kill we need be concerned only with the sentence of a 10 to 15-year term imposed on each defendant for his rape conviction. We note the further argument that in view of defendants' relative youth, the balance of their sentences should be modified to be served at the Youth Reception and Correction Center at Yardville in view of its superior rehabilitative facilities.
We have considered the entire record in this matter, including the presentence report and the additional reasons advanced pro se by letter bearing upon defendants' sentence and incarceration. We are satisfied that the sentences imposed are not manifestly excessive or a mistaken exercise of discretion. We do not perceive any sufficient basis for a modification of the sentences.
The convictions for rape are affirmed. The convictions for assault with intent to kill are reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537634/ | 355 A.2d 794 (1976)
ALGER CORPORATION et al., Appellants,
v.
L. Stuart WESLEY, surviving trustee under the Will of Isabel S. Wesley, Appellee.
No. 9493.
District of Columbia Court of Appeals.
Argued December 3, 1975.
Decided April 2, 1976.
Rehearing and Rehearing En Banc Denied June 29, 1976.
*795 Edward DeV. Bunn, Arlington, Va., for appellants.
Arthur C. Elgin, Jr., Washington, D. C., with whom Thomas S. Jackson, Washington, D. C., was on the brief, for appellee.
Before FICKLING, KERN and GALLAGHER, Associate Judges.
KERN, Associate Judge:
Appellants bring this appeal from a judgment awarding appellee $28,318.39 plus interest in damages on a note executed by appellants in favor of appellee's decedent. Three errors are alleged: (1) the trial court's entry of summary judgment in favor *796 of appellee on the issue of appellants' liability on the note, (2) the trial court's refusal to set aside the summary judgment and to permit appellants to amend their pleadings and raise several defenses omitted from the initial answer, and (3) the court's exclusion at the trial on the issue of damages of certain documents and testimony of a deceased declarant.
On July 30, 1962, appellant Alger Corporation executed a note in favor of Mrs. Isabel S. Wesley in the amount of $28,615.50 with interest at the rate of 6% per annum. The note was given to liquidate Mrs. Wesley's interest in the Admiral Hotel Corporation. Appellants General Management Corporation and Admiral Hotel Corporation were guarantors of the note. The principal and interest due on the note were payable in monthly installments of $150.00, and the entire balance of the note was due on July 30, 1968.
Mrs. Wesley died in November 1966, and appellee is the trustee under her will. Accordingly, appellee brought suit on the note on May 7, 1971, alleging that no payments had been made since January 1, 1966, and that $28,318.39 plus interest from January 1, 1966 was due.[1] Appellants answered the complaint on May 26, 1971, generally denying liability on the note and asserting without elaboration that they had a valid defense to appellee's claim.
Appellee moved for summary judgment pursuant to Super.Ct.Civ.R. 56 on July 21, 1971. In the attached statement of material facts as to which there is no genuine issue, Super.Ct.Civ.R. 12-I(k), appellee recited the making and guaranteeing of the note and the absence of payments from January 1, 1966, on. In opposition to this motion, appellants filed a response on August 6, 1971, asserting, again without elaboration, that they had a valid defense. No affidavit or statement of facts as to which there is a genuine issue was filed by appellants. See Super.Ct.Civ.R. 12-I(k) and 56.
On August 31, appellants did file a statement of material facts and attached an affidavit of Frank Calcara, President of the Alger Corporation, raising two material issues of fact. The statement alleged that as part of the agreement made at the time of executing the subject note, the parties agreed to share equally any tax liability arising from the sale of a hotel owned by the Admiral Hotel Corporation. Subsequently a tax liability of $200,000 was assessed against the corporation, which was later settled for $11,000 plus $10,000 in fees.[2] Consequently appellants alleged there existed an issue as to this counterclaim against appellee for one-half of $21,000. As a second factual issue, appellants stated that nine properties transferred from Mrs. Wesley to appellants as part of the transaction that produced the note suffered from housing code violations that cost appellants $27,000 to repair. According to appellants, this gave rise to a "cross-claim" against appellee in the amount of $27,000.
At the same time as the statement of material facts was filed, appellants filed an amendment to their answer and a counterclaim, raising the same two issues and claims discussed above. The court evidently treated this as a motion for leave to amend their pleading under Super.Ct.Civ.R. 15(a). See also Super.Ct.Civ.R. 13(f).
By order entered September 7, 1971, the court resolved most of the pending motions in this case. The court granted summary judgment to appellee on the issue of appellants' liability on the note, but left for trial the issue of damages. Appellants were allowed to amend their answer and to counterclaim with respect to appellee's alleged *797 tax liability, but not with respect to appellee's liability for housing code violations.[3]
Appellants then moved to set aside the judgment and for leave to file an amended answer and counterclaim raising issues of statute of limitations and laches, lack of consideration for the note, conditional delivery of the note, mutual mistake of fact, and misrepresentation. This motion was denied December 30, 1971, but leave was granted for appellants to file a counterclaim pursuant to the order of September 7, 1971.[4]
The question of damages was finally tried on February 10, 1975, the only issue being the amount due on the note after any set-off against the note due to appellants' counterclaims. Appellants attempted to admit into evidence documents and statements made by one Vinton Lee, Mrs. Wesley's deceased attorney, concerning the un-collectibility of the note, possible set-offs against the note, and his agreement to hold the corporation harmless as to any taxes from the sale of the hotel. These statements were ruled inadmissible hearsay and were either excluded or stricken from the record. No testimony was offered regarding appellants' claim for damages due to housing code violations. Accordingly, the court concluded as a matter of law that appellants failed "to make a prima facie case for any set-off against the balance due on the note," and judgment was entered for appellee in the amount of $28,318.39 plus interest.
Appellants argue that summary judgment as to liability was improperly granted here because appellants' attorney had raised, albeit inartfully, certain affirmative defenses to their liability on the note, and thus there existed genuine issues as to material facts. Summary judgment is appropriate only when the pleadings and affidavits in the case "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Super.Ct.Civ.R. 56(c). An award of summary judgment will be reversed where material issues are raised by the party opposing the motion, and where there are factual issues that must be resolved. See, e. g., Early Settlers Insurance Co. v. Schweid, D.C.App., 221 A.2d 920 (1966); Corson & Gruman Co. v. Zuber, D.C.Mun.App., 152 A.2d 566 (1959); White v. Luber, D.C.Mun.App., 144 A.2d 774 (1958).
In the instant case, we conclude that the trial court correctly ruled, based on the pleadings and affidavits before him, that no genuine issue of fact existed as to appellants' liability on the note. At the time of this order, appellants had not denied the execution of the note, nor had they raised any defenses going to the validity of the note itself. Although appellants in their answer claimed to have a valid defense, none was actually asserted in the pleadings or by way of affidavit. The two counterclaims raised in appellants' statement of material facts were not defenses to the note but were claims allegedly related to the transaction involving the note which might have operated as a setoff to reduce the amount of money owing to appellee. Since appellants raised no *798 genuine issue as to appellants' liability on the note, the court did not err in granting partial summary judgment. See Berman v. Group Health Association, Inc., D.C.App., 316 A.2d 863 (1974), cert. denied, 419 U.S. 842, 95 S.Ct. 75, 42 L.Ed.2d 70 (1975); Dillard v. Travelers Insurance Co., D.C. App., 298 A.2d 222 (1972); Burleson v. Burleson, D.C.App., 277 A.2d 647 (1971).
Appellants admit that the defenses of statute of limitations, laches, lack of consideration, conditional delivery, and mistake of fact were not expressly raised prior to the grant of summary judgment, but they attempt to argue that such defenses were apparent from the face of the note and were implied by their allegation that appellee was liable for one-half of the taxes assessed. We disagree, for we believe that a trial court has no obligation to look outside the parties' pleadings or to read into the record issues that are not expressly raised. Since appellants did not bring to the attention of the court any legally viable defense to their liability on the note, appellants failed to establish the existence of material facts, and summary judgment was appropriate. See Berman v. Group Health Association, Inc., supra; Dillard v. Travelers Insurance Co., supra.
In support of their second contention that the trial court erred in not setting aside the summary judgment and permitting an amendment of the pleadings, appellants argue that each of the defenses they planned to raise in the amended pleading would have constituted a genuine issue of material fact, precluding the entry of summary judgment. Appellants' likelihood of success on the merits if they are permitted to raise new defenses is not the standard by which we review a court's failure to set aside a judgment under Super.Ct.Civ.R. 60(b). Rather, we must find an abuse of discretion on the part of the trial court in order to reverse the court's ruling. See Barr v. Rhea Radin Real Estate, Inc., D. C.App., 251 A.2d 634 (1969); Bridoux v. Eastern Air Lines, 93 U.S.App.D.C. 369, 214 F.2d 207, cert. denied, 348 U.S. 821, 75 S.Ct. 33, 99 L.Ed. 647 (1954).
We find no such abuse in the particular circumstances of this case. Appellants assert that their situation falls within Rule 60(b), which allows relief for "(1) mistake, inadvertence, surprise, or excusable neglect . . . or (6) any other reason justifying relief from the operation of the judgment." But appellants make no allegations of any mistake, inadvertence, or neglect which might excuse their failure to raise certain defenses before the judgment was entered. At most, appellants concede that the pleadings "are not the best drawn documents," but make no attempt to explain or justify their failings. Since there was no showing of fraud or misconduct on the part of appellants' original attorneys,[5] and appellants have not excused their lack of diligence in asserting valid defenses to appellee's claim, relief under Rule 60(b) (1) was properly denied. See Calvert Credit Corporation v. Foster, D.C.App., 252 A.2d 521 (1969); Railway Express Agency, Inc. v. Hill, D.C.App., 250 A.2d 923 (1969); Brown v. Cooke, D.C.App., 219 A.2d 256 (1956).
The trial court also properly refused to set aside this summary judgment pursuant to Rule 60(b)(6). As we noted in Jones v. Hunt, D.C.App., 298 A.2d 220, 221-22 (1972), in reviewing a refusal to set aside a default judgment pursuant to Rule 60(b) (6):
[E]ach case must be evaluated in light of its own particular facts after consideration of the following factors: did the movant (1) have actual notice of the proceeding; (2) act in good faith; (3) present a prima facie adequate defense; and (4) act promptly. Prejudice to the *799 non-moving party should also be considered.
Here appellants did have actual notice and in fact did respond, albeit incompletely. Despite their opportunity to do so, appellants failed to raise a prima facie adequate defense to their liability on the note. Although appellants did act promptly in requesting that the motion be set aside, the prejudice to appellee in being forced to relitigate the issues after this length of time nevertheless would be great. All of these factors compel us to conclude that the trial court did not abuse its discretion in refusing to set aside the judgment in this case.[6]
Finally, appellants urge reversal of the judgment below because the trial court excluded certain evidence at the trial on the issue of damages. The evidence in controversy consisted of oral statements and written notations on documents made by Mrs. Welsey's attorney, who was deceased at the time of the trial. Since these statements were made out-of-court by a witness not under oath, and since appellants cite no exceptions to the hearsay rule allowing their admission in evidence, the testimony and documents were properly excluded.
Accordingly, the judgment is
Affirmed.
NOTES
[1] Payments made prior to January 1, 1966, had reduced the amount owing under the note to $28,318.39.
[2] The trial court's findings of fact based on the testimony adduced at trial indicated that the true figures were a $213,000 assessment settled for $10,185.07 principal plus $5,296.23 interest, with legal fees of $13,366.75 for a total of $28,848.05.
[3] Pursuant to their motion, the court on November 8, 1972, allowed appellants to counterclaim with respect to appellee's alleged liability for housing code violations. This counterclaim was asserted in an amended pleading which evidently was filed on November 20, 1972. Certain portions of this pleading were stricken by order of the court on January 23, 1973, for exceeding the authority granted by prior court orders.
[4] Appellants on January 11, 1972, moved for reconsideration of the court's order of September 7, 1971. This motion was denied "with prejudice" on March 10, 1972. Appellants then filed their amended answer and counterclaim on March 24, 1972, raising the issues of statute of limitations and laches, insufficiency of consideration, conditional delivery, mutual mistake of fact and misrepresentation, as well as asserting the counterclaim for appellee's alleged tax liability. Appellee's motion to strike the defenses not authorized under the order of September 7, 1971, was granted September 19, 1972.
[5] The original attorneys withdrew as counsel on November 24, 1971, and present counsel conducted the trial and appeal.
[6] We also are not persuaded that the court erred in refusing to grant appellants leave to amend their answer and raise new defenses pursuant to Super.Ct.Civ.R. 15(a). The request was made after summary judgment was entered on the issue of liability, so there was no reason for allowing an amendment which would raise issues precluded from litigation by the prior judgment. Consequently we cannot say the court abused its discretion in denying this motion. See Autocomp, Inc. v. Publishing Computer Service, Inc., D.C. App., 331 A.2d 338 (1975). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537549/ | 116 N.H. 163 (1976)
MARY R. DUCEY
v.
RUTH COREY.
No. 7193.
Supreme Court of New Hampshire.
March 31, 1976.
Shaw & Robertson and Norman C. Gile (Mr. Gile orally) for the plaintiff.
Wadleigh, Starr, Peters, Dunn & Kohls and Eugene M. Van Loan III (Mr. Van Loan orally) for the defendant.
*164 PER CURIAM.
The issue in this case is whether the trial court erred in not enforcing an out-of-court settlement between attorneys. We hold that it did not.
Plaintiff, a resident of Massachusetts, was injured in an automobile accident in New Hampshire on July 17, 1969. She consulted a lawyer in Massachusetts and was referred to a New Hampshire attorney (not her present attorney) who brought suit by writ dated April 30, 1971. Present counsel for the defendant through her insurer entered an appearance on her behalf. A deposition of the plaintiff was taken in January 1972 and a pretrial hearing was held in April 1972. Negotiations for settlement were conducted by plaintiff's then counsel and counsel for the defendant from the period January 1972 until January 1973 when counsel agreed to settle for $300 and plaintiff's counsel agreed to obtain releases. The case had been set to be tried beginning February 1, 1973, and defendant's counsel notified the clerk of court that the case had been settled. The clerk notified counsel for both parties pursuant to Superior Court Rule 48 that the court had been notified of the settlement and that agreements should be filed in court. RSA 491: App. R. 48 (Supp. 1975). Thereafter in March plaintiff's then counsel notified defendant's counsel that plaintiff refused to sign or accept the settlement.
Defendant then filed a motion to enforce the settlement. At the hearing on the motion, plaintiff testified without contradiction that she never authorized the lawyer to settle her claim, never heard a specific figure but was only told that the case was coming up, they had only offered a few hundred dollars and that he the lawyer would "get back" to her, that she had to go to Florida for her health and assumed the lawyer would tell her "what was going on, which he didn't" and when she returned home, she found the releases.
The trial court found that plaintiff's former attorney did not have express or implied authority to make the settlement and that the settlement was not completed and denied the motion to enforce the settlement. Defendant's exceptions were transferred by Keller, C.J.
Our rule regarding the power of an attorney to bind his client by settlement is, perhaps, the most liberal in the country. See Burtman v. Butman, 94 N.H. 412, 54 A.2d 367 (1947); Annot., 66 A.L.R. 107 (1930); Annot., 30 A.L.R. 2d 944 (1953). However, in this case, there was a basis for the trial court's finding that there was no express or implied authority for the settlement. The motion to enforce the settlement sought a remedy in the nature of specific *165 performance which is governed by equitable principles. Burtman v. Butman supra. Although we reaffirm our existing law, we cannot say that on the facts of this case the denial of the motion was unwarranted. See Harrison v. Gooden, 439 F.2d 1070 (1st Cir. 1971).
Exception overruled; remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537642/ | 355 A.2d 799 (1976)
Thaddeus E. TANSIMORE, Jr., Appellant,
v.
UNITED STATES, Appellee.
No. 9060.
District of Columbia Court of Appeals.
Submitted September 24, 1975.
Decided April 8, 1976.
*800 David C. Niblack, Washington, D. C., appointed by this court, for appellant.
Earl J. Silbert, U. S. Atty., John A. Terry, James F. McMullin, Stuart M. Gerson, Regina C. McGranery and Bernard J. Panetta II, Asst. U. S. Attys., Washington, D. C., were on the brief for appellee.
Before FICKLING and KERN, Associate Judges, and PAIR, Associate Judge, Retired.
FICKLING Associate Judge:
Appellant was convicted after a trial by jury of petit larceny[1] and destruction of property,[2] for which he received concurrent sentences.[3] Moreover, pursuant to the District of Columbia's release offender statute, D.C.Code 1973, § 23-1328, appellant received an additional 90-day sentence to be served consecutively to all other sentences. The issues raised on appeal are (1) whether the trial court erred in refusing to impose the sanctions of the Jencks Act, 18 U.S.C. § 3500 (1970), when the government was unable to produce upon request a drawing of the crime scene prepared by an investigating officer; (2) whether D.C.Code 1973, § 23-1328, is unconstitutionally vague; (3) whether the court below erred in imposing the additional 90-day sentence without allowing a trial by jury on the issue of appellant's release *801 offender status; and (4) whether appellant was deprived of adequate procedural safeguards at the sentencing proceeding.
Metropolitan Police Department Officer Jacob testified at trial that on September 17, 1974, at 4:45 a. m., he was on routine patrol in the vicinity of 16th Street and Fort Stevens Drive, N.W., when he noticed the shadow of a figure standing behind the raised trunk of a parked car. Arriving at the parked car, the officer noticed that the trunk had been closed, the trunk lock had been forcefully removed, and a tire was lying in the street. On further investigation, appellant was discovered lying underneath the parked car. Another officer arrived on the scene and appellant was arrested and advised of his rights. As he was being searched, appellant volunteered that "[he] didn't mean it," and asked the officer to "give [him] a break." In the course of the search, a screwdriver was seized from appellant's right rear pocket.
After Officer Jacob completed his direct testimony, defense counsel requested the production of a drawing of the crime scene previously prepared by the witness. The Assistant United States Attorney indicated that the officer had drawn the diagram at her request several days earlier, during a recess in the trial and out of the presence of the jury. The prosecutor indicated to the court that she threw away the diagram after deciding that a larger map would be preferable for jury display. Defense counsel then moved to strike the officer's testimony, arguing that this was the proper sanction under the Jencks Act. The court denied the motion holding, inter alia, that this drawing did not qualify as a formal statement within the purview of the Jencks Act. Appellant was subsequently convicted by the jury of petit larceny and destruction of property.
At the sentencing proceeding, the prosecutor asked that appellant be subjected to an additional term of imprisonment pursuant to D.C.Code 1973, § 23-1328, the so-called release offender statute.[4] The prosecutor stated:
The government also in this case, Your Honor, will file Repeat [sic] papers in that Mr. Tansimore was on release in another case as indicated in those papers, and that the government has the Court's own jacket for indication of the fact that Mr. Tansimore was on release.
Appellant, through counsel, requested a hearing on the matter of his release offender status. Apparently attempting to comply with this request, the court asked appellant whether he had been previously convicted of petit larceny. Appellant elected to stand mute instead of responding to the court's question. Rather than requiring the government to prove that appellant had been on release during the commission of the offenses, the court chose to treat appellant's silence as an admission of this fact. The court proceeded to sentence him under the release offender statute to an additional prison term of 90 days. This appeal followed.
First, appellant contends that pursuant to the Jencks Act, 18 U.S.C. § 3500 (1970), the trial court erred by refusing to strike *802 the testimony of Officer Jacob when the government was unable to produce a drawing of the crime scene prepared by the officer. We disagree.
For the Jencks Act to apply and for the right of discovery to exist under the Act, the material sought to be disclosed must constitute a "statement" within the meaning of the Act. Moore v. United States, D.C.App., 353 A.2d 16 (No. 8069, Feb. 3, 1976); In re A.B.H., D.C.App., 343 A.2d 573, 575 (1975). In our view, the diagram prepared by Officer Jacob did not constitute a "statement" within the purview of 18 U.S.C. § 3500(e) (1) or (2) and, therefore, no Jencks Act sanction was warranted. The drawing of the crime scene was neither
(1) a written statement made by said witness and signed or otherwise adopted or approved by him; [nor]
(2) a stenographic, mechanical, electrical, or other recording, or a transcription thereof, which is a substantially verbatim recital of an oral statement made by said witness to an agent of the Government and recorded contemporaneously with the making of such oral statement. Accordingly, the trial court did not err when it held that the drawing was not Jencks Act material.
Appellant next attacks the additional 90-day sentence imposed pursuant to D. C.Code 1973, § 23-1328, contending that the release offender statute is impermissibly vague and uncertain. Specifically, appellant contends that the statute is violative of due process since it fails to delimit with precision the term "release." We disagree.
In Musser v. Utah, 333 U.S. 95, 97, 68 S.Ct. 397, 398, 92 L.Ed. 562 (1948), the Supreme Court stated:
Legislation may run afoul of the Due Process Clause because it fails to give adequate guidance to those who would be law-abiding, to advise defendants of the nature of the offense with which they are charged, or to guide courts in trying those who are accused.
D.C.Code 1973, § 23-1328,[5] provides that additional penalties shall be assessed when any person is convicted of an offense committed "while released pursuant to section 23-1321." D.C.Code 1973, § 23-1321,[6] specifically *803 sets forth the various types of release which may be ordered by a judicial officer. Accordingly, we find that Congress delimited the term "release" in a manner sufficient to provide adequate guidance to both the appellant and the courts.
Next, appellant contends D.C.Code 1973, § 23-1328, created a new and separate crime, thereby entitling him to a jury trial on the issue of whether he committed an offense while on release. We disagree.
D.C.Code 1973, § 23-1328, provides in pertinent part:
(a) Any person convicted of an offense committed while released pursuant to section 23-1321 shall be subject to the following penalties in addition to any other applicable penalties:
(1) A term of imprisonment of not less than one year and not more than five years if convicted of committing a felony while so released; and
(2) A term of imprisonment of not less than ninety days and not more than one year if convicted of committing a misdemeanor while so released.
It is clear the the above statute pertains only to the question of punishment rather than creating a new substantive offense. By its very terms, the provisions of § 23-1328 become operational only after a trial and after the accused has been found guilty. The fact that one was on release during the commission of a crime for which he is convicted merely serves to enlarge the penalty and is, therefore, a sentencing matter within the exclusive jurisdiction of the trial judge. Our position is consistent with the general rule established vis-a-vis the analogous situation of repeat offender statutes.[7] The accepted view is that these recidivist statutes do not create separate offenses, but only enhance the punishment on account of the prior conviction. See Chandler v. Fretag, 348 U.S. 3, 7, 75 S.Ct. 1, 99 L.Ed. 4 (1954); Graham v. West Virginia, 224 U.S. 616, 623-24, 32 S.Ct. 583, 56 L.Ed. 917 (1912); Jackson v. United States, 95 U.S.App.D.C. 328, 221 F.2d 883 (1955).
Finally, appellant contends that he was sentenced under D.C.Code 1973, § 23-1328, without first being afforded adequate procedural safeguards. Specifically, the contention is that the sentencing judge erred by failing to require the government to introduce actual proof that appellant was, in fact, on release at the time he committed the offenses for which he was convicted. We agree.
Although no statutory procedure is set forth in D.C.Code 1973, § 23-1328, we are convinced that certain procedural safeguards must be afforded before the heavier release offender penalty can be imposed. In discussing the analogous situation involving imposition of increased penalties in the recidivist context, Judge Robinson stated:
We have no doubt that the proceeding is criminal in character, and as much as any other that paves the way to prison. We have no doubt, either, that the accused recidivist, similarly to an accused first offender, must be sheltered by suitable safeguards against an improper sentence. *804 (Footnote omitted.) [United States v. Clemons, 142 U.S.App.D.C. 177, 181, 440 F.2d 205, 209 (1970) (en banc), cert. denied, 401 U.S. 945, 91 S.Ct. 959, 28 L.Ed.2d 227 (1971).]
Likewise, due to the potential penalties set forth in D.C.Code 1973, § 23-1328, the accused release offender must be protected by adequate procedural safeguards against the imposition of an improper sentence.
In assessing the adequacy of the procedures employed in the instant case, we are guided by a line of cases in the District of Columbia Circuit which establish certain minimal procedural requirements in the analogous situation concerning repeat offenders.
In Jackson v. United States, supra, 95 U.S.App.D.C. at 330, 221 F.2d at 885, the late Judge Wilbur K. Miller, in vacating an increased repeat offender sentence, stated:
Jackson should not have been given a sentence of more than one year in the absence of proof to the trial judge, at or before the time of sentence, that he had been previously convicted. . . . Such proof which so largely shapes the sentence should be introduced in the defendant's presence, just as the sentence itself must be pronounced in his presence.
Similarly, in United States v. Clemons, supra 142 U.S.App.D.C. at 181, 440 F.2d at 209, the court stated:
In a decidedly criminal proceeding wherein punishment may be multiplied here by a factor of ten nothing so vital as the existence of the conditions authorizing a stepped-up sentence should be left to surmise. And perhaps the procedural standard least dispensable to any just ascertainment of the essential substantive elements of a sentence for illegal pistol-toting is proof adequate to support affirmative judicial determinations on that score. . . . (Footnote omitted.)
Based on the logic and language contained in these cases, we conclude that it was error to sentence appellant under D.C.Code 1973, § 23-1328, in the absence of an admission or proof that he was, in fact, on release during the commission of the offenses for which he was convicted. The government was never required to introduce any proof either of the fact of release or of the identity of appellant as the release offender. The sentencing judge relied instead upon the unsubstantiated allegations by the government on these issues.[8]
Moreover, we conclude that the judge erred in treating appellant's silence as an admission of his release offender status. Although an accused may competently and intelligently waive the necessity for such proof, we find no such waiver under the facts of this case.[9]
*805 Accordingly, we affirm the judgments appealed from to the extent that they convict appellant of petit larceny and destruction of property and impose concurrent sentences for these substantive offenses. However, we vacate the 90-day sentence imposed pursuant to D.C.Code 1973, § 23-1328, unless on remand the government introduces evidence, with appellant and his counsel present, which satisfies the sentencing judge that, at the time of the commission of the offenses, appellant was on release.
So ordered.
NOTES
[1] D.C.Code 1973, § 22-2202.
[2] D.C.Code 1973, § 22-403.
[3] Appellant was sentenced as a repeat offender, D.C.Code 1973, § 22-104, to a term of 18 months on the petit larceny conviction. Twelve of the 18 months were suspended and appellant was placed on one year's probation. Appellant also received a 6-month sentence for destroying property, to run concurrently with the petit larceny sentence.
[4] On the first day of trial, appellant was served notice of the government's intent to seek additional penalties pursuant to the release offender statute. This document entitled "Notice of Additional Penalties Pursuant to 23 D.C.Code, Section 1328" states:
The United States of America, by its attorney, the United States Attorney for the District of Columbia, informs the Court that the defendant in this case, Thaddeus Edward Tansimore, was released in Criminal Case No. U.S. 65174-74 pursuant to 23 D.C.Code, Section 1321, and during such release committed the offense or offenses with which he is presently charged.
Notice is hereby given that this defendant, upon conviction in this case for committing an offense during release pursuant to 23 D.C.Code, Section 1321, is subject to increased penalty upon conviction, pursuant to the provisions of 23 D.C.Code, Section 1328.
[5] D.C.Code 1973, § 23-1328, provides:
(a) Any person convicted of an offense committed while released pursuant to section 23-1321 shall be subject to the following penalties in addition to any other applicable penalties:
(1) A term of imprisonment of not less than one year and not more than five years if convicted of committing a felony while so released; and
(2) A term of imprisonment of not less than ninety days and not more than one year if convicted of committing a misdemeanor while so released.
(b) The giving of a warning to the person when released of the penalties imposed by this section shall not be a prerequisite to the application of this section.
(c) Any term of imprisonment imposed pursuant to this section shall be consecutive to any other sentence of imprisonment.
[6] D.C.Code 1973, § 23-1321, provides in pertinent part:
(a) Any person charged with an offense, other than an offense punishable by death, shall, at his appearance before a judicial officer, be ordered released pending trial on his personal recognizance or upon the execution of an unsecured appearance bond in an amount specified by the judicial officer, unless the officer determines, in the exercise of his discretion, that such a release will not reasonably assure the the [sic] appearance of the person as required or the safety of any other person or the community. When such a determination is made, the judicial officer shall, either in lieu of or in addition to the above methods of release, impose the first of the following conditions of release which will reasonably assure the appearance of the person for trial or the safety of any other person or the community, or, if no single condition gives that assurance, any combination of the following conditions:
(1) Place the person in the custody of a designated person or organization agreeing to supervise him.
(2) Place restrictions on the travel, association, or place of abode of the person during the period of release.
(3) Require the execution of an appearance bond in a specified amount and the deposit in the registry of the court in cash or other security as directed, of a sum not to exceed 10 per centum of the amount of the bond, such deposit to be returned upon the performance of the conditions of release.
(4) Require the execution of a bail bond with sufficient solvent sureties, or the deposit of cash in lieu thereof.
(5) Impose any other condition, including a condition requiring that the person return to custody after specified hours of release for employment or other limited purposes.
No financial condition may be imposed to assure the safety of any other person or the community.
[7] See D.C.Code 1973, §§ 22-104 and -3204.
[8] The government represented that appellant was a release offender both on the first day of trial (see note 4 supra) and at the sentencing proceeding.
[9] The following confusing interchange took place after counsel for appellant requested the hearing on the applicability of the sentencing provisions of D.C.Code 1973, § 23-1328:
THE COURT: Well, it's simply a matter of proving that he was not out on release. That's all.
[DEFENSE COUNSEL]: That's right, Your Honor.
THE COURT: Stand up a minute, young man. The government has alleged, in the information filed prior to trial in this case, that you had been convicted previously in Criminal Case No. 56678-73, in this Court, of the charge of petty [sic] larceny. You were convicted of that on October 23, 1973. Now the question is, do you admit or do you deny that conviction?
[DEFENSE COUNSEL]: Your Honor, may I counsel with my client?
[Pause]
[DEFENSE COUNSEL]: Your Honor, at this time, I'm advising my client to plead the Fifth Amendment to any questions you want to ask. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537650/ | 142 B.R. 499 (1992)
In the Matter of EAST COAST BROKERS & PACKERS, INC., Debtor.
No. 89-03831-8B1.
United States Bankruptcy Court, M.D. Florida, Tampa Division.
July 9, 1992.
*500 Scott Stichter, Tampa, Fla., for debtor.
Douglas R. Gardner, Tampa, Fla., U.S. Trustee, for Melvin B. Smith, Tax Collector.
ORDER DENYING MOTION TO DISMISS OBJECTION TO CLAIM
THOMAS E. BAYNES, Jr., Bankruptcy Judge.
THIS MATTER came on for hearing upon the Objection to Claim filed by Debtor and the Motion to Dismiss filed by Melvin B. Smith, Tax Collector, Hillsborough County, Florida (Claimant). The Court, having reviewed the Objection to Claim and the Motion to Dismiss, and having heard argument of counsel, finds as follows:
The basic issue in this matter involves a conflict between the provisions of Section 505(a) of the Bankruptcy Code (11 U.S.C.) relating to a bankruptcy court's power to determine a debtor's tax liability and the provisions of Section 194.171(2) of the Florida Statutes limiting the time within which a taxpayer may contest a tax assessment. This is a core matter over which the Court has jurisdiction. 28 U.S.C. § 157(b)(2); 28 U.S.C. § 1334.
On June 2, 1989, Debtor filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code. On November 16, 1989, Claimant filed its claim (Claim # 39) for 1989 ad valorem tangible personal property taxes. On February 25, 1991, Debtor filed its Second Amended Plan of Reorganization which was confirmed by order of this Court dated April 8, 1991. On July 19, 1991, Debtor filed its Objection to Claim which disputed the claim of Claimant. On February 21, 1992, Claimant filed its Motion to Dismiss which sought to have Debtor's Objection to Claim dismissed.
Claimant's Motion to Dismiss asserted Debtor was barred from contesting Claimant's tax claim by the provisions of Section 194.171(2) of the Florida Statutes which provides:
No action shall be brought to contest a tax assessment after 60 days from the date the assessment being contested is certified for collection under s. 193.122(2), or after 60 days from the date a decision is rendered concerning such assessment by the property appraisal adjustment board if a petition contesting the assessment had not received final action by the property appraisal adjustment board prior to extension of the roll under s. 197.323.
Debtor filed its 1989 tangible personal property tax return on March 31, 1989. The 1989 tax roll was certified for collection on October 18, 1989. Debtor has not pursued any remedies provided by the laws of Florida to challenge the 1989 tax assessment. Debtor's only challenge to the assessment occurred in the context of the Objection to Claim now under consideration.
Accordingly, Claimant maintains since more than 60 days passed between the certification of the 1989 tax roll and Debtor's filing its Objection to Claim, Debtor should be prevented from asserting any challenge to the claim by Section 194.171(2) of the Florida Statutes. Claimant argues since Florida law provides a speedy, efficient and complete method for challenging tax assessments, Debtor should be precluded from opposing the tax assessment at this late date by basic tenets of equity and the principles of full faith and credit.
Debtor relies upon Section 505 of the Bankruptcy Code arguing that the Court has authority to examine Debtor's tax liability. Section 505 provides:
(a)(1) Except as provided in paragraph (2) of this subsection, the court may determine the amount or legality of any tax . . ., whether or not previously assessed, whether or not paid, and whether or not contested before and adjudicated by a *501 judicial or administrative tribunal of competent jurisdiction.
(2) The court may not so determine
(A) the amount or legality of a tax . . . if such amount or legality was contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction before the commencement of the case under this title.
Since the tax liability in question here was neither contested before, nor adjudicated by, any judicial or administrative tribunal, Debtor argues this Court has the authority to evaluate Debtor's tax liability. Debtor further asserts the provisions of Section 505 override the full faith and credit doctrine. Finally, Debtor claims, as a matter of bankruptcy policy, the Court should exercise its discretion to determine Debtor's tax obligations.
This Court agrees with Debtor's characterization of the Court's authority and jurisdiction in this matter. It is clear the language of Section 505(a)(2) only deprives a bankruptcy court of its authority to determine a debtor's tax liability where that liability has been previously contested before and adjudicated by another authorized tribunal. The mere expiration of the time during which a debtor can pursue its state law remedies does not constitute a contest and adjudication. Ledgemere Land Corp. v. Town of Ashland (In re Ledgemere Land Corp.), 135 B.R. 193 (Bankr.D.Mass. 1991); In re A.H. Robins Company, 126 B.R. 227 (Bankr.E.D.Va.1991).
This interpretation is consistent with the clear language and legislative history of Section 505, and the general policies underlying the Bankruptcy Code. Section 505 requires a prior contest and adjudication in order to block reconsideration of a debtor's tax liability by a bankruptcy court. No consideration is given to the situation where a debtor fails to pursue the remedies available under state law. In fact, the primary purpose behind Section 505 is protection of the estate from the potential loss incurred because of a debtor's failure, due either to financial inability or mere indifference, to contest potentially incorrect tax assessments. City Vending v. Okla. Tax Comm'n, 898 F.2d 122, 125 (10th Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 75, 112 L.Ed.2d 48 (1990). The legislative history indicates Congress did not intend to alter the previous standards of Section 2a(2A) of the Bankruptcy Act of 1898 which required more than a mere default in a prior proceeding to meet the requirement of contest and adjudication. In re Tapp, 16 B.R. 315 (Bankr.D.Alaska 1981). In this case, holding Debtor to the time limitations created by state law for challenging the assessment would subvert the clear purpose and intent of Section 505.
As to the applicability of the full faith and credit doctrine to the Court's power to review Debtor's tax liability under Section 505 of the Bankruptcy Code, the Court finds Section 505 predominates with regard to any challenge of tax liability. Full faith and credit, as it applies to the relationship between the federal courts and state laws, is primarily governed by 28 U.S.C. § 1738 which directs the federal courts to accord full faith and credit to properly authenticated acts of the states. As already discussed, Section 505 permits a bankruptcy court to determine a debtor's tax liability where there was no previous contest and adjudication. Such a clear mandate in the Bankruptcy Code indicates Congress intended applicability of 28 U.S.C. § 1738 to be limited by the provisions of Section 505. Ledgemere Land Corp., 135 B.R. at 196; In re Tapp, 16 B.R. at 321.
Finally, although the Court has the power to determine Debtor's tax liability in this matter, according to the language of Section 505, that power is discretionary and may or may not be exercised depending upon the equities of a particular situation. The Court is aware that Claimant is burdened by Debtor's failure to challenge the tax assessment until approximately one and one-half years after the certification of the 1989 tax rolls. Furthermore, it is clear the principles of equity may bar a debtor from raising challenges or instituting litigation against a creditor where those disputes are not timely raised. Oneida Motor Freight v. United Jersey Bank, 848 F.2d 414 (3d Cir.), cert. denied, 488 U.S. 967, 109 S.Ct. 495, 102 L.Ed.2d 532 (1988); Freedom *502 Ford, Inc. v. Sun Bank and Trust Co., 140 B.R. 585 (Bankr.M.D.Fla.1992). However, the facts of this case do not warrant the use of the Court's discretion to block Debtor's Objection on the merits. The possibility of claim litigation is one which all creditors participating in a bankruptcy case face and is a necessary aspect of any bankruptcy case if the Bankruptcy Code's goal of maximizing distribution to all creditors is to be achieved. The potential benefits in this case to the estate and creditors of the estate of a reduction of Debtor's tax liability outweigh any burden on Claimant of having to defend the tax assessment at this point.
This Court finds, however, that Debtor has failed to state with particularity the basis for its Objection to Claim. Such Objection must be amended to afford Claimant ample information upon which to defend his claim.
Accordingly, it is
ORDERED, ADJUDGED AND DECREED that the Motion to Dismiss filed by Melvin B. Smith, Tax Collector, Hillsborough County, Florida, is denied. It is further
ORDERED, ADJUDGED AND DECREED that Debtor's Objection to Claim of Melvin B. Smith, Tax Collector, Hillsborough County, Florida (Claim # 39), shall be amended to set out with greater specificity the basis for objecting to Claimant's claim. Such amendment shall be filed within 15 days of the date of this Order, or the Objection to Claim # 39 will be deemed waived. It is further
ORDERED, ADJUDGED AND DECREED that if Debtor timely files an amended objection to claim, the Court will set the matter for final hearing by separate order.
DONE AND ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537557/ | 277 Md. 421 (1976)
355 A.2d 466
LAYTON
v.
PETRICK ET UX.
[No. 151, September Term, 1975.]
Court of Appeals of Maryland.
Decided April 9, 1976.
The cause was argued before MURPHY, C.J., and SINGLEY, SMITH, DIGGES, LEVINE, ELDRIDGE and O'DONNELL,[*] JJ.
Stephen A. Tarrant for appellant.
Clarke Murphy, Jr., for appellees.
SINGLEY, J., delivered the opinion of the Court.
This litigation, which evolved from an attempted assignment of a lease, has been pending in the Circuit Court for Harford County since November, 1971, and is making its second visit to this Court.
The factual background which gave rise to the litigation is simple. Paul J. Petrick and Margaret Petrick, his wife, (the *423 Petricks) are the owners of a 37.166-acre tract near Joppa, Maryland. Approximately 1.72 acres of the tract were occupied by Evershield Products, Inc. (Evershield), substantially all of the stock of which was owned by the Petricks. On 3 October 1969, as an incident to the acquisition of the stock of Evershield by Micamatix Corporation (Micamatix), the Petricks entered into an indenture of lease with Evershield, which purported to lease to Evershield a parcel 500 feet by 150 feet, improved by an office and machine shop then occupied by Evershield.[1] The lease was for an original term of 40 years, with an option to renew for an additional term of 59 years. The rent reserved for the original term was $3,300.00 per year, net of all property expenses, which were deemed to be additional rent for the purposes of the lease; for the first five years of the renewal term, rent was fixed at 6% per annum of the appraised value of the land subject to the lease; for the next five years, at 7%, and then for the balance of the renewal term, at 8%, in each case again net of all property expenses. Although forms of acknowledgment had been appended to the lease for the Petricks and Evershield, these forms were never completed. The lease was not recorded until May, 1971.
In that month, some 17 months after the execution of the lease, Evershield and Micamatix[2] joined in an assignment of all their interest in the lease to Robert P. Layton, a member of the New York bar, as additional security for the payment of a note evidencing a loan of $30,000.00 made by Layton to Evershield. The assignment gave Layton the right to possession in the event of a default in the performance of the covenants of the lease or in the performance of the provisions of the loan agreement or other security instruments. The assignment was executed in behalf of *424 Evershield and Micamatix, but was not acknowledged by either of them.
Commencing in August, 1971, and continuing until February, 1972, Layton paid rent to the Petricks. There was testimony that payments of $1,850.00, and $131.00 in court costs, were made to obtain dismissal of an ejectment action brought by the Petricks. The record does not reveal against whom the action was instituted. Payments of rent ceased apparently in accordance with the terms of an oral stipulation between the Petricks and Layton pending disposition of the action for specific performance brought by Layton against the Petricks.
In November, 1971, as a result of a default in the payment of the Evershield note, Layton filed a bill of complaint in the Circuit Court for Harford County against the Petricks seeking specific performance of the lease of which he was the assignee and an ex parte injunction restraining the Petricks from entering the leased premises. The injunction issued, pending negotiations.
After several months of preliminary sparring, the Petricks filed an answer to the bill of complaint and a motion for summary judgment, both of which were largely grounded on the point that the 1969 lease, being for a term of more than seven years, was required to be recorded by Maryland Code (1957, 1966 Repl. Vol., 1969 Cum. Supp.) Art. 21, § 1 (a); and that since it had not been acknowledged, Code (1957, 1966 Repl. Vol.) Art. 21, § 12, it could not be recorded, see Clarke v. Brunk, 189 Md. 353, 360, 55 A.2d 919, 922, (1948). After a hearing, the motion for summary judgment was granted, but no written order was entered by the chancellor. An appeal was taken to this Court which we dismissed on 6 February 1973, relying upon Kennedy v. Foley, 240 Md. 615, 214 A.2d 815 (1965).
When the case returned to the trial court, Layton countered with a motion for reargument which was followed by the Petricks' motion ne recipiatur and motion to strike. On 22 August 1973, the motion for summary judgment was denied. A series of delays followed at the request of both parties, and an evidentiary hearing was eventually held on *425 the bill of complaint and answer on 16 April 1975. From an order dismissing the bill for specific performance, Layton appealed to the Court of Special Appeals. We granted certiorari before the case was heard by that court.
We think the chancellor was pertially correct when he applied the recordation statute which was in effect in 1969, when the lease was executed. At that time, Code (1957, 1966 Repl. Vol., 1969 Cum. Supp.) Art. 21, § 1 (a) provided:
"No ... estate above seven years, shall pass or take effect unless the deed conveying the same shall be executed, acknowledged and recorded as herein provided; ... and provided, further, that whenever a lease or sublease to which this section shall apply has been executed, but has not been acknowledged or recorded ... as herein provided, such lease or sublease shall, notwithstanding the provisions of this section, be valid and binding, and of full force and effect both at law and in equity, between the original parties to such lease...." (emphasis supplied).
It was his interpretation of the effect of the statute which must be reexamined, however.
The chancellor found as a fact that neither the lease nor the assignment had been acknowledged at the time of execution; that inexplicably, an unacknowledged copy of the lease had been caused to be recorded among the land records of Harford County in May of 1971, prior to the institution of the action for specific performance, despite the provisions of the Code requiring recorded instruments to be acknowledged. There was a further finding that the assignment had never been recorded among the land records although what purported to be an acknowledgment had somehow been completed on 7 November 1973, well after the institution of this proceeding.
The chancellor determined, and we agree, that the unacknowledged lease was valid as between the Petricks and *426 Evershield, the parties, despite the fact that the absence of the acknowledgments may not have been corrected by the curative act, Code (1957, 1966 Repl. Vol., 1971 Cum. Supp.) Art. 21, § 99. While none of our cases may flately so hold, see, however, Adams v. Avirett, 252 Md. 566, 568, 250 A.2d 891 (1969); Note, Absolute Necessity of Acknowledging a Deed of Gift in Maryland, 12 Md. L. Rev. 166, 173 (1951), it is palpably clear that the thrust of the present curative act, now Code (1974), Real Property Article § 4-109 (c) (1) and (4) is directed at a defective acknowledgment, and not at the complete lack of an acknowledgment of consideration or disbursement. In any event, the new curative act, § 4-109, is by its terms not applicable to a defective grant recorded before 1 January 1973 if the defect, as it was here, is challenged in a judicial proceeding commenced by 1 July 1973. For reasons to be developed, we think that the rights and responsibilities of the parties to the lease do not hinge entirely on the curative act.
More than three decades ago, Maryland landlords and tenants adopted a practice of not recording long-term leases for commercial and mercantile properties, apparently because of the reluctance of one or both of the parties to make a public disclosure of the amount of rent reserved, particularly in instances where the rent was fixed as a percentage of sales.
In 1948, our predecessors decided two cases which unsettled the business community. Both involved unrecorded leases for terms greater than seven years. In Hyatt v. Romero, 190 Md. 500, 58 A.2d 899 (1948), the lease was for an initial term of six years with an option to renew for an additional period of six years. The Court concluded that, since it was not the intention of the parties that a new lease be entered into upon exercise of the renewal option, the lease was actually for a period of more than seven years, and, therefore, could pass no legal interest or estate in the land if not recorded as required by Code (1939) Art. 21, § 1,[3]*427 which was then in effect, but that a tenancy, upon all terms of the lease except as to duration, would be implied from the lessee's occupancy of the premises and the payment of rent which was accepted by the lessor.
Exactly two months later, the Court decided Darling Shops Delaware Corp. v. Baltimore Center Corp., 191 Md. 289, 60 A.2d 669, noted in 9 Md. L. Rev. 362 (1948). There, the tenancy was for a term of 10 years, but the lease was not recorded. Relying on Hyatt v. Romero, supra, the Court held that by payment and acceptance of the rent, a tenancy from year to year was created which was terminable on any anniversary date by the giving of three months' notice. Because something less than three months' notice had been given prior to the end of the tenth year, the Court concluded that the tenancy renewed itself for an additional year, and the judgment which had been entered below for the restitution of the premises was reversed.
There was a vigorous dissent by Judge Charles Markell, who believed the better view to be that a tenant under an unrecorded lease, although a tenant from year to year, was entitled to no notice of termination at the end of the last year of the term mentioned in the lease.
In the wake of these cases, Code (1939) Art. 21, § 1 was first amended by Chapter 507 of the Laws of 1949 to meet the Hyatt v. Romero situation, and was again amended by Chapter 565 of the Laws of 1951, adding two exceptions to the requirement that a lease for more than seven years be recorded:
"... except that this section shall not apply to any lease or sub-lease for an initial term of not more than seven years which contains any provision for *428 renewal for one or more succeeding stated terms of not more than seven years each, if under such provision for renewal the right to effect or prevent each such renewal term shall be optional with either the landlord or the tenant; and provided, further, that whenever a lease or sub-lease to which this section shall apply has been executed, but has not been acknowledged or recorded or neither acknowledged nor recorded, as herein provided, such lease or sub-lease shall, notwithstanding the provisions of this section, be valid and binding, and of full force and effect both at law and in equity, between the original parties to such lease."
Thus the rules in Hyatt v. Romero and Darling Shops, both supra, were modified by statute.
Code (1957, 1966 Repl. Vol., 1969 Cum. Supp.) Art. 21, § 1 contained these exceptions when the Evershield lease was executed on 3 October 1969, and Hyatt v. Romero and Darling Shops are not applicable. See also Jacobs v. Klawans, 225 Md. 147, 169 A.2d 677 (1961), upholding the constitutionality of Chapter 565 of the Laws of 1951, and holding that an unrecorded lease for a term of 10 years was thereby made binding between the parties.
By Chapter 349, § 1 of the Laws of 1972, effective 1 January 1973, Article 21 of our Code was revised and reenacted and subsequently recodified as Code (1974), Real Property Article. Section 3-101 is the lineal descendant of former Article 21, § 1 and provides in part:
"(a) General rule. Except as otherwise provided in this section, no estate of inheritance or freehold, declaration or limitation of use, estate above seven years, or deed may pass or take effect unless the deed granting it is executed and recorded.
"(b) * * *
"(c) Certain leases for less than seven years. The recording requirement of subsection (a) does *429 not apply to any lease for an initial term not exceeding seven years if each renewal term under the lease (i) is for seven years or less, and (ii) by the provisions of the lease, may be effected or prevented by a party to the lease or his assigns.
"(d) Persons against whom unrecorded lease effective. If a lease required to be executed and recorded under the provisions of subsection (a) is executed but not recorded, the lease is valid and fully effective both at law and in equity (i) between the original parties to the lease and their personal representatives, (ii) against their creditors, and (iii) against and for the benefit of any other person who claims by, through, or under an original party and who acquires the interest claimed with actual notice of the lease or at a time when the tenant, or anyone claiming by, through, or under the tenant, is in such actual occupancy as to give reasonable notice to the person." (emphasis supplied).
The posture in which this case reaches us is essentially this. There is an unacknowledged lease for more than seven years, invalid, unless saved by statute, except as between the parties, the Petricks and Evershield. There is an unrecorded assignment of a tenancy for more than seven years, invalid, unless saved by statute, except as among Evershield, Micamatix and Layton, the parties to the assignment. If Layton cannot claim through Evershield, Evershield's liability to the Petricks would be unaffected, and Layton would become Evershield's sublessee, Rubin v. Leosatis, 165 Md. 36, 42, 166 A. 428, 430 (1933).
While Layton may be able to enforce his rights as assignee against Evershield, he cannot do so against the Petricks, with whom he is not in privity, unless he can avail himself of the provision of Code (1974), Real Property Article § 3-101 (d) (iii) giving full force and effect to an unrecorded lease
"against and for the benefit of any other person who claims by, through, or under an original party and who acquires the interest claimed with actual *430 notice of such lease or at a time when the tenant, or anyone claiming by, through, or under the tenant, is in such actual occupancy as to give reasonable notice to such person."
The transitional provisions of new Article 21, now Title 15 of the Real Property Article, provide, in § 15-101, that the effective date of the 1972 act was 1 January 1973. Section 15-102 (1) provides that § 3-101 (a) shall apply to "all deeds whether executed before or after the effective date," and § 1-101 (c) defines "deed" as including any lease or assignment. Presumably, the purpose of § 15-102 (1) was to make all provisions regarding unrecorded "deeds" of § 3-101 retrospective, including present subsection (d) (iii) which appeared in § 3-101 (a) of the new Article 21 in 1973 but became § 3-101 (d) (iii) of the Real Property Article in 1974, see Janda v. General Motors Corp., 237 Md. 161, 168-69, 205 A.2d 228, 232-33 (1964), which carefully sets forth the rules governing the retrospective application of statutes.
In order for Layton to prevail under § 3-101 (d) (iii), he must be able to succeed to Evershield's rights as lessee. This would require proof either: (i) that Evershield was in possession, and had not breached any covenant of the lease, including the covenant to pay rent, at the time the specific performance suit was instituted, or (ii) that Layton had paid the rent which should have been paid by Evershield, had performed or was prepared to perform the other covenants of the lease, and therefore claimed that he was entitled to enter into possession, which he demanded on 22 October 1971 and sought to enforce in his specific performance action.[4]
None of this seems to have been developed in the evidentiary hearing held below, and until it is, the rights of the parties cannot be precisely determined. We therefore *431 propose to remand the case, without affirmance or reversal, for the taking of additional testimony upon which appropriate findings of fact can be predicated.
Case remanded without affirmance or reversal for further proceedings consonant with the views herein expressed; costs to abide the result.
NOTES
[*] Reporter's Note: O'Donnell, J., participated in the hearing of the case and in the conference in regard to its decision, but died prior to the adoption of the opinion by the Court.
[1] There was some uncertainty about the description inserted in the lease which is not pertinent to this discussion, since there was apparently a mistake in the courses first inserted which was later corrected. Layton later filed in support of his memorandum of law a perimeter survey which had been prepared in December, 1970, at the instance of Micamatix.
[2] There is nothing in the record which suggests that the lease was ever assigned by Evershield to Micamatix.
[3] "No estate of inheritance or freehold, or any declaration or limitation of use, or any estate above seven years, shall pass or take effect unless the deed conveying the same shall be executed, acknowledged and recorded as herein provided; and all such deeds shall be acknowledged before some one of the officers named in sections three, four, five and six of this article, and any unmarried woman between the age of eighteen years and twenty-one years, shall have power to make a deed of trust of her property, real, personal or mixed; provided, the same shall be approved and sanctioned by a court having equity jurisdiction in the city or county where the grantor resides, upon the petition of said grantor, and such proof as the said court in its discretion may require."
[4] It will be recalled that Layton had paid rent, and the Petricks had accepted his payments, from about August, 1971 until February, 1972, when payments ceased under the oral stipulation. Layton testified that he had visited the property with his insurance agent a week or two after 22 October 1971 to arrange for insurance coverage but was denied entry by Petrick. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537561/ | 167 Conn. 309 (1974)
STATE OF CONNECTICUT
v.
WENDELL E. BARTEE
Supreme Court of Connecticut.
Argued October 3, 1974.
Decision released November 19, 1974.
HOUSE, C. J., SHAPIRO, LOISELLE, MACDONALD and BOGDANSKI, JS.
Edward F. Kunin, for the appellant (defendant).
Walter D. Flanagan, assistant state's attorney, with whom, on the brief, were Donald A. Browne, state's attorney, and Richard F. Jacobson, assistant state's attorney, for the appellee (state).
*310 HOUSE, C. J.
The defendant was convicted by a jury of robbery in the first degree in violation of General Statutes § 53a-134 (a) (2). There is not much divergence between the facts presented by the state and the defendant, and the defendant has made no claim that the verdict was not supported by the evidence. Rather, on this appeal it is his claim that the primary issues at the trial were the intent of the defendant and the credibility of witnesses and that evidence was improperly admitted which prejudiced him on the question of credibility.
The state offered to prove and claimed to have proved the following facts: On December 29, 1971, David J. Carey, a state police officer, was assigned to perform undercover narcotics work in the Bridgeport area. Officer Carey, working with an informer known to narcotics dealers in that city, met Bartee and a companion and they agreed to take him to a location where he could obtain narcotics. Upon arriving at the site, Officer Carey, who was driving, turned to Bartee, who was seated with his companion in the back seat of the car, and was confronted with an open straight razor held by Bartee. A struggle ensued in which Bartee and his companion subdued the officer and placed the razor against his throat. He was instructed to give up, and his wallet and some cash were taken from his pockets. As Bartee was leaving the vehicle, the officer grabbed his hand which held the razor and backed out of the car. In the process, the officer received a cut from the razor on his left hand. As he got out of the car, the officer took a pistol out of his pocket and told Bartee to stop or he would shoot. Bartee, with the razor in his hand, approached the officer and told him to go ahead and shoot. The *311 officer then shot the defendant in the chest. Bartee was immediately taken to the hospital where he was arrested and advised of his rights by Sergeant Frank Nerkowski of the Bridgeport police department. The next day, December 30, 1971, Bartee was interviewed at the hospital by Officer Nerkowski regarding the incident of the previous day. The officer testified that at the outset of this interview he asked Bartee if he remembered and understood the warnings which were given to him the previous day. Bartee indicated that he did. Thereupon Bartee gave the officer a statement which was admitted into evidence at the trial.
In this statement, Bartee claimed that it was his companion who jumped on the officer, a scuffle ensued, and the officer and Bartee both got out of the car. Bartee had a razor in his hand. The officer told him to drop the razor or he would shoot, and Bartee told the officer to go ahead and shoot. After he was shot, Bartee dropped the razor and was taken to the hospital.
The defendant filed five assignments of error all predicated upon a claim that the court erred in permitting Officer Nerkowski to testify to the statements which Bartee made to him in the hospital on the day following the shooting. In his brief, the defendant has varied his claims somewhat and briefed four issues which are primarily related to and concern the question of the voluntariness of the defendant's statement and the sufficiency of the warning to him as required by the decision of the United States Supreme Court in Miranda v. Arizona, 384 U.S. 436, 478-79, 86 S. Ct. 1602, 16 L. Ed. 2d 694. He asserts that at the time the statement was given he had an absolute right to have counsel *312 present, that he was without the assistance of counsel, and that the state failed to show that he voluntarily waived the right to counsel.
Regardless of the precise moment when an arrested person may have any "absolute" right to counsel it cannot be doubted that, once warned of his rights as prescribed in Miranda v. Arizona, supra, and the opportunity to exercise those rights has been afforded and is afforded him throughout the interrogation, "the individual may knowingly and intelligently waive these rights and agree to answer questions or make a statement." Miranda v. Arizona, supra, 479. As the United States Supreme Court further stated in that case (p. 478): "Confessions remain a proper element in law enforcement. Any statement given freely and voluntarily without any compelling influences is, of course, admissible in evidence." As we summarized the rule in State v. Darwin, 161 Conn. 413, 428, 288 A.2d 422: "What seems to be required is that once charged with a crime, a defendant must know that any statements he might make can be used against him and that any time he chooses to make a statement to a law enforcement official he may have counsel present. Thus, a statement made by a defendant after he is charged with a crime is only admissible if his counsel is present, or if he knowingly and voluntarily waives his right to have counsel present."
Not only is it significant that at the time Bartee gave his statement to Officer Nerkowski he had not been arraigned or informed against, but the court after a full hearing in the absence of the jury concluded that the statement "was made by Bartee freely and voluntarily and at a time when he had *313 been previously informed of his rights and at a time when he was physically and mentally capable of understanding and appreciating not only his rights but also anything that he might say during said interview."
In connection with the court's ruling as to the voluntariness of his statement, the defendant has briefed a claim that "[t]he sufficiency of defendant's physical condition was not proved by the state" and that hearsay evidence was admitted as to the defendant's physical condition. The prosecution has the burden of proving voluntariness at least by the fair preponderance of the evidence. Lego v. Twomey, 404 U.S. 477, 92 S. Ct. 619, 30 L. Ed. 2d 618. Office Nerkowski testified as to his interrogation of Bartee and that before he interviewed Bartee he conferred with the director of security at the hospital who checked with the attending physician who gave permission for the interview. This testimony was admitted without objection by the defendant and no exception was taken or motion to strike the testimony made. Since the claim as to hearsay evidence now made was not raised in and passed on by the trial court, we do not consider it on appeal. State v. Uriano, 165 Conn. 104, 328 A.2d 679; State v. Evans, 165 Conn. 61, 327 A.2d 576; see also United States v. Indiviglio, 352 F.2d 276 (2d Cir.).
We find no merit to the claim of the defendant that the state did not meet its burden of showing that the defendant's statement was freely and voluntarily given or to his further claim that he did not waive his right to have counsel present.
The defendant's remaining assignment of error is a claim that "the detective did not give the Miranda *314 warning properly."[1] The precise words used by the Supreme Court in Miranda do not constitute a ritualistic formula which must be repeated without variation in order to be effective. Words which convey the substance of the warning along with the required information are sufficient. United States v. Vanterpool, 394 F.2d 697 (2d Cir.); United States v. Potter, 360 F. Sup. 68 (E.D. La.), aff'd, 490 F.2d 991 (5th Cir.). Not only do we find no merit to the present claim of the defendant that the warning as given was not proper and sufficient but, in addition, no question of the adequacy of the warning was raised in the trial court. We have already stated and have repeatedly reiterated that this court will not consider claimed errors on the part of the trial court unless the claim was raised and passed on in the trial court. Practice Book § 652; State v. Evans, supra; see also State v. Ferraro, 164 Conn. 103, 318 A.2d 80; Balch Pontiac-Buick, Inc. v. Commissioner of Motor Vehicles, 165 Conn. 559, 568, 345 A.2d 520.
There is no error.
In this opinion the other judges concurred.
NOTES
[1] The actual warning as given to Bartee by Officer Nerkowski was: "You have a right to remain silent. If you talk to any police officer, anything you say can and will be used against you in court. You have a right to consult with a lawyer before you are questioned, and may have him with you during questioning. If you cannot afford a lawyer, one will be appointed for you, if you wish, before any questioning. If you wish to answer questions, you have the right to stop answering at any time. You may stop answering questions at any time if you wish to talk to a lawyer." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8304355/ | *439MEMORANDUM
Me. Justice Humphkeys
delivered the opinion of the Court.
At Mutual’s suit to enforce a covenant not to compete, Ramsey was enjoined from competing with Mutual in certain regards. On appeal, the Court of Appeals, Middle Division, 58 Tenn.App. 164, 427 S.W.2d 849, affirmed the lower court’s decree, and reinstated the injunction, which had been treated as vacated by the appeal. Now, Ramsey has petitioned this Court for certiorari and supersedeas to review this judgment. Upon presentation of this petition to the writer, the point was made by petitioner that by force of T.C.A. see. 16-411 a supersedeas is unnecessary, as the judgment of the Court of Appeals only becomes final for purposes of enforcement by orders of that court after the expiration of the time for filing petition for writ of certiorari with this Court, and the time during which such petition remained undisputed of. I have concluded the point is well made.
Chapter 100 of the Acts of 1925, creating the Court of Appeals, in sec. 13 provided that the judgments of the Court of Appeals “unless superseded, reversed, or modified by the Supreme Court, shall, after expiration of thirty days from final decree as hereinafter defined, be executed by all necessary and proper writs.”
By the Code Supplement of 1950, sec. 13 of Chapter 100 was modified so as to remove from it the provision ■with respect to judgments becoming effective after thirty days, and the statute was rewritten, at it has since remained, so as to provide that the judgments of the Court of Appeals only become enforceable after expiration of the time for filing for writ of certiorari with this Court *440and the time during which such petition remains undis-posed of.
It is evident the statute was modified to relieve petitioners for certiorari to review Court of Appeals judgments from the troublesome task of applying directly to a Justice of the Court for writs of supersedeas, and to relieve the Justice of the more troublesome task of making- a preliminary review of the record which would be necessary in every petition for review by certiorari.
It is within the recollection of Chief Justice Burnett that the Code Commission in charge of the 1950 modification, modified sec. 13 for the purpose suggested.
Consistently, it has been the general practice since the 1950 modification not to apply for or to issue supersedeas except in special cases; and in view of the concurrent holding of the Chancellor and the Court of Appeals, this is not a case in which the Court would be justified in issuing supersedeas.
The argument of respondent that this interpretation of the statute leaves one enjoined by a judgment of the Court of Appeals, either mandatorily or by prohibition, at liberty to commit, possibly, acts of a serious and hurtful nature, raises an unfounded fear. This Court has power where a violation of such a nature is threatened or committed, to enforce an injunction ordered by the Court of Appeals, either under T.C.A. sec. 23-1911 or by reason of our inherent power to malee orders necessary to an orderly and just appellate review. Chaffin, et al. v. Robinson, et al., 187 Tenn. 125, 213 S.W.2d 32.
*441 Additionally, the Court of Appeals, after the expiration of the time for review, can punish the injunction violator for contempt of that court. The decree of that Court is not vacated by the petition for certiorari, it is simply unenforceable by that court during the period mentioned in T.C.A. see. 16-411. Chaffin et al. v. Robinson et al., 187 Tenn. 125, 213 S.W.2d 32.
BubNett, Chief Justice, and Dyer, ChattxN and Cbe-soN, Justices, concur. | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/1537572/ | 140 N.J. Super. 77 (1976)
M.T., PLAINTIFF-RESPONDENT,
v.
J.T., DEFENDANT-APPELLANT.
Superior Court of New Jersey, Appellate Division.
Submitted October 14, 1975.
Decided March 22, 1976.
*78 Before Judges CARTON, CRAHAY and HANDLER.
Mr. Charles L. Bertini, attorney for appellant.
Mr. Joseph S. Conte, attorney for respondent.
The opinion of the court was delivered by HANDLER, J.A.D.
This appeal presents the portentous problem of how to tell the sex of a person for marital purposes. Involved is a post-operative transsexual, born a male but now claiming to be a female.
The case started inauspiciously enough when plaintiff M.T. filed a simple complaint in the Juvenile and Domestic Relations Court for support and maintenance. The legal issue sharpened dramatically when defendant J.T. *79 interposed the defense that M.T. was a male and that their marriage was void. Following a hearing the trial judge determined that plaintiff was a female and that defendant was her husband, and there being no fraud, ordered defendant to pay plaintiff $50-a-week support. Notice of appeal was then filed by defendant.
A careful recapitulation of the testimony is appropriate. M.T. testified that she was born a male. While she knew that she had male sexual organs she did not know whether she also had female organs. As a youngster she did not participate in sports and at an early age became very interested in boys. At the age of 14 she began dressing in a feminine manner and later began dating men. She had no real adjustment to make because throughout her life she had always felt that she was a female.
Plaintiff first met defendant in 1964 and told him about her feelings about being a woman. Sometime after that she began to live with defendant. In 1970 she started to go to Dr. Charles L. Ihlenfeld to discuss the possibility of having an operation so that she could "be physically a woman." In 1971, upon the doctor's advice, she went to a surgeon who agreed to operate. In May of that year she underwent surgery for the removal of male sex organs and construction of a vagina. Defendant paid for the operation. Plaintiff then applied to the State of New York to have her birth certificate changed.
On August 11, 1972, over a year after the operation, plaintiff and defendant went through a ceremonial marriage in New York State and then moved to Hackensack. They lived as husband and wife and had intercourse. Defendant supported plaintiff for over two years when, in October 1974, he left their home. He has not supported plaintiff since.
Dr. Ihlenfeld, plaintiff's medical doctor with a specialty in gender identity, was accepted as an expert in the field of medicine and transsexualism. A transsexual, in the opinion of this expert, was "a person who discovers sometime, usually *80 very early in life, that there is a great discrepancy between the physical genital anatomy and the person's sense of self-identity as a male or as a female. * * * [T]he transsexual is one who has a conflict between physical anatomy and psychological identity or psychological sex." Usually sexual anatomy was "normal" but for some reason transsexuals did not see themselves as members of the sex their anatomy seemed to indicate. According to Dr. Ihlenfeld, there are different theories to explain the origin of that conflict. There was, however, "very little disagreement" on the fact that gender identity generally is established "very, very firmly, almost immediately, by the age of 3 to 4 years." He defined gender identity as "a sense, a total sense of self as being masculine or female * * *"; it "pervades one's entire concept of one's place in life, of one's place in society and in point of fact the actual facts of the anatomy are really secondary * * *."
The doctor first saw and examined plaintiff in September 1970 and took a medical history from her. She told him that she had always felt like a woman and was living like a woman. She wanted sex reassignment surgery as well as treatments and hormones so that she could end the conflict she was feeling, "confronted with a male body," in order to live her life completely as the woman she thought herself to be. Dr. Ihlenfeld diagnosed her as a transsexual. He knew of no way to alter her sense of her own feminine gender identity in order to agree with her male body, and the only treatment available to her was to alter the body to conform with her sense of psyche gender identity. That regimen consisted of hormone treatment and sex reassignment surgery. Dr. Ihlenfeld recommended such an operation and treated plaintiff both before and after it.
The examination of plaintiff before the operation showed that she had a penis, scrotum and testicles. After the operation she did not have those organs but had a vagina and labia which were "adequate for sexual intercourse" and could function as any female vagina, that is, for "traditional penile/vaginal intercourse." The "artificial vagina" constructed *81 by such surgery was a cavity, the walls of which are lined initially by the skin of the penis, often later taking on the characteristics of normal vaginal mucosa; the vagina, though at a somewhat different angle, was not really different from a natural vagina in size, capacity and "the feeling of the walls around it." Plaintiff had no uterus or cervix, but her vagina had a "good cosmetic appearance" and was "the same as a normal female vagina after a hysterectomy." Dr. Ihlenfeld had seen plaintiff since the operation and she never complained to him that she had difficulty having intercourse. So far as he knew, no one had tested plaintiff to find out what chromosomes she had. He knew that plaintiff had had silicone injections in her breasts; he had treated her continuously with female hormones to demasculinize her body and to feminize it at the same time. In the doctor's opinion plaintiff was a female; he no longer considered plaintiff to be a male since she could not function as a male sexually either for purposes of "recreation or procreation."
Plaintiff also produced Charles Annicello, a psychologist who worked at the gender identity clinic of the Johns Hopkins University Hospital. He was qualified as an expert in transsexualism. This witness demonstrated through slides the various methods by which scientists define whether a person is male or female. The witness said that transsexualism represented only one sexual variant although it was not known whether its cause was chromosomal, gonadal or hormonal. Annicello expressed the opinion that if a person had a female psychic gender and underwent a sex reassignment operation, that person would be considered female although no person is "absolutely" male or female.
Dr. Richard M. Samuels, a Ph.D. with a specialty in behavioral therapy and sexual dysfunctions, testified as an expert in psychology as it related to transsexualism. His definition of a transsexual was essentially the same as that given by the prior experts: "someone whose physical anatomy does not correspond to their [sic] sense of being, to their [sic] sense of gender." He also acknowledged that it was not *82 known what caused that condition but he believed that it was probably a combination of neurological, chromosomal and environmental factors. Some psychological changes are noted following a sex reassignment operation. Thus, a transsexual was often depressed pre-operatively, but after the operation he or she lived a "fuller and richer life" and was better able to overcome obstacles in employment, housing, social security and welfare benefits; a sense of satisfaction and relief was felt since the body was now in line with the psyche. For Dr. Samuels the most important factor in determining whether a person should have a sex reassignment operation was how consistently the patient lived in the chosen gender role. A sex reassignment operation did not determine a person's gender. After a transsexual underwent a sex reassignment operation to remove male organs, Dr. Samuels would characterize that person as a female.
Defendant called as an expert witness Dr. T, a medical doctor who was defendant's adoptive father. Over plaintiffs objection he was allowed to testify as an expert. Dr. T classified sex at birth according to sexual anatomy. He described a female as "a person who has female organs in an anatomical sense, who has a vagina and a uterus and ovaries or at least has had them." The witness had heard all of the prior testimony and he said that in his opinion plaintiff was still a male because she did not have female organs. He did believe, however, that transsexuals existed and that they were people who had "the mental and emotional reactions of the opposite sex." On cross-examination Dr. T reiterated that it was the anatomy alone which determined the real sex of an individual and that gender in contrast to sex was not a significant factor. Although he was "very sympathetic to any male person" who had "the emotional and mental reactions of a female," since he knew that it was "very annoying," he still did not believe that that was determinative.
The trial judge made careful findings of fact on this evidential record. He accepted the testimony concerning M.T.'s personal and medical history as related by her and her doctor. *83 He noted that defendant knew of her condition and cooperated in her sex reassignment surgery. The parties married in New York and subsequently consummated their marriage by engaging in sexual intercourse. The judge also found that defendant later deserted plaintiff and failed to support her.
Drawing from the opinions of the experts the judge defined a transsexual as "an individual anatomically of one sex who firmly believes he belongs to the other sex." He enumerated the seven factors considered generally relevant to the determination of sex. According to the judge, a preoperative transsexual would appropriately be classified according to his anatomical sex. After a successful sex reassignment operation, however, "psychological sex and anatomical sex become consistent as to outward appearances." The judge ruled that plaintiff was of the female psychic gender all her life and that her anatomical change through surgery required the conclusion that she was a female at the time of the marriage ceremony. He stated:
It is the opinion of the court that if the psychological choice of a person is medically sound, not a mere whim, and irreversible sex reassignment surgery has been performed, society has no right to prohibit the transsexual from leading a normal life. Are we to look upon this person as an exhibit in a circus side show? What harm has said person done to society? The entire area of transsexualism is repugnant to the nature of many persons within our society. However, this should not govern the legal acceptance of a fact. * * *
Defendant's basic and continuing contention is that the marriage between him and plaintiff was a nullity because plaintiff was a male at the time of the ceremony. We disagree with this position and affirm the decision of the lower court.
We accept and it is not disputed as the fundamental premise in this case that a lawful marriage requires the performance of a ceremonial marriage of two persons of the opposite sex, a male and a female. Despite winds of *84 change, this understanding of a valid marriage is almost universal. Annotation, "Marriage Between Persons of Same Sex," 63 A.L.R.3d 1199 (1975). In the matrimonial field the heterosexual union is usually regarded as the only one entitled to legal recognition and public sanction. 52 Am. Jur.2d, Marriage, § 1 at 865; e.g. Singer v. Hara, 11 Wash. App. 247, 522 P.2d 1187 (App. Ct. 1974); B. v. B., 78 Misc.2d 112, 355 N.Y.S.2d 712 (Sup. Ct. 1974); Jones v. Hallahan, 501 S.W.2d 588 (Ky. Ct. App. 1973); Baker v. Nelson, 291 Minn. 310, 191 N.W.2d 185 (Sup. Ct. 1971), app. dism. 409 U.S. 810, 93 S.Ct. 37, 34 L.Ed.2d 65 (1972).
There is not the slightest doubt that New Jersey follows the overwhelming authority.[1] The historic assumption in the application of common law and statutory strictures relating to marriages is that only persons who can become "man and wife" have the capacity to enter marriage. Cf. Winn v. Wiggins, 47 N.J. Super. 215, 220 (App. Div. 1957); Jackson v. Jackson, 94 N.J. Eq. 233, 236-237 (E. & A. 1922); N.J.S.A. 37:1-10. The pertinent statutes relating to marriages and married persons do not contain any explicit references to a requirement that marriage must be between a man and a woman. N.J.S.A. 37:1-1 et seq.; N.J.S.A. 2A: 34-1 et seq. Nevertheless that statutory condition must be extrapolated. It is so strongly and firmly implied from a full reading of the statutes that a different legislative intent, *85 one which would sanction a marriage between persons of the same sex, cannot be fathomed.
The issue must then be confronted whether the marriage between a male and a postoperative transsexual, who has surgically changed her external sexual anatomy from male to female, is to be regarded as a lawful marriage between a man and a woman.
An English case, Corbett v. Corbett, 2 W.L.R. 1306, 2 All E.R. 33 (P.D.A. 1970) appears to be the only reported decision involving the validity of marriage of a true postoperative transsexual and a male person. The judge there held that the transsexual had failed to prove that she had changed her sex from male to female. The court subscribed to the opinion of the medical witnesses that "the biological sexual constitution of an individual is fixed at birth (at the latest), and cannot be changed, either by the natural development of organs of the opposite sex, or by medical or surgical means. The respondent's operation, therefore, cannot affect her true sex." 2 W.L.R. at 1323. It felt that three tests for sex should be used, the chromosomal, gonadal and genital, and when these were congruent sex for purposes of marriage should be determined accordingly. Id. at 1325. And, in view of the "essentially hetero-sexual character" of marriage, the test to determine sex must be biological, "for even the most extreme degree of transsexualism in a male or the most severe hormonal imbalance which could exist in a person with male chromosomes, male gonads, and male genitalia, cannot reproduce a person who is naturally capable of performing the essential role of a woman in marriage." Id. at 1324-1325. Based upon an assumed distinction between "sex" and "gender," the court held that "marriage is a relationship which depends on sex and not on gender." Id. at 1325. In addition, the judge was mindful that the marriage was unstable, brief and the sexual exchange between the parties the husband was a transvestite was ambivalent. He concluded on alternative grounds that the marriage had not been, and indeed could not be, consummated.
*86 We cannot join the reasoning of the Corbett case. The evidence before this court teaches that there are several criteria or standards which may be relevant in determining the sex of an individual. It is true that the anatomical test, the genitalia of an individual, is unquestionably significant and probably in most instances indispensable. For example, sex classification of an individual at birth may as a practical matter rely upon this test. For other purposes, however, where sex differentiation is required or accepted, such as for public records, service in the branches of the armed forces, participation in certain regulated sports activities, eligibility for types of employment and the like, other tests in addition to genitalia may also be important. Comment, "Transsexualism, Sex Reassignment Surgery, and the Law." 56 Cornell L. Rev. 963, 992-1002 (1971).
Against the backdrop of the evidence in the present record we must disagree with the conclusion reached in Corbett that for purposes of marriage sex is somehow irrevocably cast at the moment of birth, and that for adjudging the capacity to enter marriage, sex in its biological sense should be the exclusive standard. On this score the case has not escaped critical review. Comment, supra, 56 Cornell L. Rev. at 1003-1007; Note, "Transsexuals in Limbo," 31 Md. L. Rev. 236, 244 (1971).
Our departure from the Corbett thesis is not a matter of semantics. It stems from a fundamentally different understanding of what is meant by "sex" for marital purposes. The English court apparently felt that sex and gender were disparate phenomena. In a given case there may, of course, be such a difference. A preoperative transsexual is an example of that kind of disharmony, and most experts would be satisfied that the individual should be classified according to biological criteria. The evidence and authority which we have examined, however, show that a person's sex or sexuality embraces an individual's gender, that is, one's self-image, the deep psychological or emotional sense of sexual identity and character. Indeed, it has been observed that the "psychological *87 sex of an individual," while not serviceable for all purposes, is "practical, realistic and humane." Comment, supra, 56 Cornell L. Rev. at 969-970; cf. In re Anonymous, 57 Misc.2d 813, 293 N.Y.S.2d 834, 837 (Civ. Ct. 1968).
The English court believed, we feel incorrectly, that an anatomical change of genitalia in the case of a transsexual cannot "affect her true sex." Its conclusion was rooted in the premise that "true sex" was required to be ascertained even for marital purposes by biological criteria. In the case of a transsexual following surgery, however, according to the expert testimony presented here, the dual tests of anatomy and gender are more significant. On this evidential demonstration, therefore, we are impelled to the conclusion that for marital purposes if the anatomical or genital features of a genuine transsexual are made to conform to the person's gender, psyche or psychological sex, then identity by sex must be governed by the congruence of these standards.
Implicit in the reasoning underpinning our determination is the tacit but valid assumption of the lower court and the experts upon whom reliance was placed that for purposes of marriage under the circumstances of this case, it is the sexual capacity of the individual which must be scrutinized. Sexual capacity or sexuality in this frame of reference requires the coalescence of both the physical ability and the psychological and emotional orientation to engage in sexual intercourse as either a male or a female.
Other decisions touching the marital status of a putative transsexual are not especially helpful. Anonymous v. Anonymous, 67 Misc.2d 982, 325 N.Y.S.2d 499 (Sup. Ct. 1971), cited by defendant, held a marriage a nullity, but there the two persons had never had sexual intercourse and had never lived together. Although it was claimed that respondent was a transsexual and had had an operation to remove his male organs after the marriage, there was no medical evidence of this. In B. v. B., supra, a female transsexual had had a hysterectomy and mastectomy but had not received any male *88 organs and was incapable of performing sexually as a male. He had then married a normal female who later sued for an annulment on the ground that he had defrauded her by not informing her of his transsexualism and of the operation. The judge there held that even if defendant were a male and trapped in the body of a female, his attempted sex reassignment surgery had not successfully released him from that body.
Anonymous v. Weiner, 50 Misc.2d 380, 270 N.Y.S.2d 319 (Sup. Ct. 1966), sustained the refusal by the New York City Board of Health to amend a sex designation on a birth certificate. The court acquiesced in the view of the administrative agency that "male-to-female transsexuals are still chromosomally males while ostensibly females" and that the desire of the transsexual for "concealment of a change of sex * * * is outweighed by the public interest for protection against fraud." 270 N.Y.S.2d at 322. To reiterate, the chromosomal test of sex in this context is unhelpful. The potential for fraud, feared by the court, moreover, is effectively countered by the apt observation of the trial judge here: "The transsexual is not committing a fraud upon the public. In actuality she is doing her utmost to remove any false facade." Further, we note the Weiner case was sharply criticized in re Anonymous, supra, which ordered a change to a female name for a postoperative transsexual. The court concluded that the chromosomal test recommended by the New York Academy of Medicine and adopted by the court in Weiner was unrealistic and inhumane. It said:
It has been suggested that there is some middle ground between the sexes, a "no-man's land" for those individuals who are neither truly "male" nor truly "female." Yet the standard is much too fixed for such far-out theories. Rather the application of a simple formula could and should be the test of gender, and that formula is as follows: Where there is disharmony between the psychological sex and the anatomical sex, the social sex or gender of the individual will be determined by the anatomical sex. Where, however, with or without medical intervention, the psychological sex and the anatomical sex are harmonized, then the social sex or gender of the individual should be made to conform to the harmonized status *89 of the individual and, if such conformity requires changes of a statistical nature, then such changes should be made. Of course, such changes should be made only in those cases where physiological orientation is complete. [293 N.Y.S.2d at 837]
Another case, Hartin v. Director of the Bureau of Records, etc., 75 Misc.2d 229, 347 N.Y.S.2d 515 (Sup. Ct. 1973), also rejected the request of a transsexual to amend a birth certificate. The court noted the administrative finding that a sex reassignment operation is "an experimental form of psychotherapy * * * mutilating surgery * * * that nonetheless does not change the body cells governing sexuality." 347 N.Y.S. 2d at 518. That reasoning, as well as the earlier Weiner decision, has been characterized as unsound and inadequate. Note, "Law and Transsexualism: A Faltering Response to a Conceptual Dilemma," 7 Conn. L. Rev. 288 (1975). Support for the views there expressed cannot be squared with the conclusions imposed by the record in this case.
In sum, it has been established that an individual suffering from the condition of transsexualism is one with a disparity between his or her genitalia or anatomical sex and his or her gender, that is, the individual's strong and consistent emotional and psychological sense of sexual being. A transsexual in a proper case can be treated medically by certain supportive measures and through surgery to remove and replace existing genitalia with sex organs which will coincide with the person's gender. If such sex reassignment surgery is successful and the postoperative transsexual is, by virtue of medical treatment, thereby possessed of the full capacity to function sexually as a male or female, as the case may be, we perceive no legal barrier, cognizable social taboo, or reason grounded in public policy to prevent that person's identification at least for purposes of marriage to the sex finally indicated.
In this case the transsexual's gender and genitalia are no longer discordant; they have been harmonized through medical treatment. Plaintiff has become physically and *90 psychologically unified and fully capable of sexual activity consistent with her reconciled sexual attributes of gender and anatomy. Consequently, plaintiff should be considered a member of the female sex for marital purposes. It follows that such an individual would have the capacity to enter into a valid marriage relationship with a person of the opposite sex and did do so here. In so ruling we do no more than give legal effect to a fait accompli, based upon medical judgment and action which are irreversible. Such recognition will promote the individual's quest for inner peace and personal happiness, while in no way disserving any societal interest, principle of public order or precept of morality.
Accordingly, the court below correctly determined that plaintiff at the time of her marriage was a female and that defendant, a man, became her lawful husband, obligated to support her as his wife. The judgment of the court is therefore affirmed.
NOTES
[1] No issue was raised below or on appeal as to the state law applicable to this case. Our courts would generally look to the law of the place of the marriage ceremony to determine its validity unless contrary to public policy. Booker v. James Spence Iron Foundry, 80 N.J. Super. 68, 77-78 (App. Div. 1963); Winn v. Wiggins, 47 N.J. Super. 215, 220 (App. Div. 1957). We have examined independently the statutory law of the State of New York (New York Domestic Relations Law, §§ 5 through 25) and are satisfied that by its literal terms the marriage in this case would not by statute be prohibited. The current decisional law of New York, discussed infra, is not dispositive of the legal issue as to whether this marriage would be void or voidable in that state. Hence, we are free to apply the law of the State of New Jersey. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537576/ | 167 Conn. 328 (1974)
STATE OF CONNECTICUT
v.
EDWARD J. SMITH
Supreme Court of Connecticut.
Argued October 9, 1974.
Decision released November 26, 1974.
HOUSE, C. J., COTTER, SHAPIRO, MACDONALD and BOGDANSKI, JS.
*329 Raymond J. Quinn, Jr., public defender, for the appellant (defendant).
Francis M. McDonald, Jr., state's attorney, for the appellee (state).
COTTER, J.
The defendant was found guilty by a jury of possession of heroin, possession of marihuana, and possession of heroin with intent to sell when at the time of his arrest he was not a drug-dependent person. The defendant has appealed from the judgment.
As to his conviction on the third count, the defendant has assigned as error the court's denial of his motion to set aside the verdict on the ground that the evidence was insufficient to justify the finding, beyond a reasonable doubt, that he was not a drug-dependent *330 person at the time of arrest. We examine the evidence printed in the appendices to the briefs in order to determine whether the jury acted fairly, intelligently and reasonably in rendering its verdict. State v. Johnson, 166 Conn. 439, 352 A.2d 294; State v. Brathwaite, 164 Conn. 617, 325 A.2d 284.
From the evidence offered, the jury could reasonably have found the following: At the time of his arrest on November 18, 1971, the defendant had a brown paper bag containing 225 glassine packets of white powder in his possession. The state toxicologist, upon chemical analysis, determined that each packet contained heroin.
At trial, the defendant testified on cross-examination that he was not dependent on heroin at the time of his arrest. In addition, testimony was introduced that persons who use heroin do so by injecting it into the veins, placing it directly under the skin, or sniffing it through the nostrils. The state toxicologist testified that when a person chooses to inhale or snort heroin, erosion or swelling of the internal membranes of the nose occurs. State Police Corporal Nicholas Valerio, Jr., testified that no "tracks" or scars from injecting heroin were found in the defendant's arms, and no deterioration or erosion in the nose was observed when the defendant was examined at the police station after his arrest. The defendant on direct examination stated that he did snort "six or seven bags of heroin a day"; however, he testified that the reason for doing this was to avoid becoming an addict.
The question presented by the defendant's claim that the court erred in refusing to set aside the verdict is whether the trial court abused its discretion. *331 State v. Brathwaite, supra, 618-19; State v. Benton, 161 Conn. 404, 409, 288 A.2d 411. Evidence must be given the construction most favorable in support of the jury's verdict. Tucker v. Halay, 156 Conn. 633, 634, 242 A.2d 730. On the evidence presented, the jury could have concluded that the state had proved beyond a reasonable doubt that the defendant was not a drug-dependent person at the time of his arrest. See State v. Brathwaite, supra, 619; State v. Savage, 161 Conn. 445, 452, 290 A.2d 221; Tucker v. Halay, supra. The court was not in error in refusing to set aside the verdict.
The defendant next claims error in the trial court's failure to strike that portion of Corporal Valerio's testimony in which he reiterated a statement by the defendant made when he was taken to the police station after his arrest that he was not then using heroin. The defendant argues that prior to making the incriminating statement, he had not effectively waived his rights recognized by the United States Supreme Court in Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694. The substance of the defendant's objection at trial to the court's failure to strike this testimony, however, was that the police had not truly provided him with the opportunity to obtain counsel as required by Miranda, supra, 474, 479. We will not consider such a claim of error raised for the first time on appeal and find no error in the only ruling which the trial court was called upon to make. See State v. Evans, 165 Conn. 61, 327 A.2d 576; State v. Johnson, 166 Conn. 439, 352 A.2d 294.
Finally, the defendant has assigned error in the court's failure to grant his motion for a directed verdict, on the ground that the statute creating the *332 crime of which he was convicted on the third count was unconstitutional. The statute purports to punish persons who are convicted of possession of heroin with intent to sell, and who are not drug dependent at the time of arrest.[1] The defendant argues that the statute in relating criminality to drug dependency at the time of arrest, and not to the time of the "commission of the crime," in effect subjects persons to punishment who may well have been drug dependent prior to their arrests (e.g., during the time of the police investigation) but who, at the time of arrest, are no longer addicted. For this reason, the defendant submits, it is possible for persons to be convicted and sentenced merely because they were in possession of heroin with the intent to sell it due to a compulsion they were under at some time before their arrest; and that consequently, the statute is unconstitutional on its face as purporting to punish the "status" of drug dependence in violation of the prohibition against "cruel and unusual punishment" in the eighth amendment of the United States constitution as applied to this state by the fourteenth amendment. The defendant cites as authority Robinson v. California, 370 U.S. 660, 82 S. Ct. 1417, 8 L. Ed. 2d 758.
*333 The defendant's reliance on Robinson is misplaced. There the United States Supreme Court invalidated a California statute construed as making it a criminal offense merely to "be addicted to the use of narcotics." Id. Assuming arguendo that the defendant's interpretation of the Connecticut statute under which he was convicted is correct, this statute could foreseeably subject to punishment persons who are not only drug dependent prior to arrest, but are also in possession of heroin and have the intent to sell it. Even though this drug dependence alone may be the sole cause of the person's being in possession of heroin with the intent to sell it, the Supreme Court has specifically refused to hold that the eighth amendment exculpates persons who commit other acts proscribed by the criminal law because of a compulsion induced by such dependence. Powell v. Texas, 392 U.S. 514, 88 S. Ct. 2145, 20 L. Ed. 2d 1254. In an opinion by Justice Marshall, the court held that the eighth amendment does not prevent the state from prosecuting a person for engaging in acts proscribed under the criminal law even if the condition essential to constitute the defined crime is part of the pattern of his disease and is occasioned by a compulsion symptomatic of the disease. Id., 533. Rather, criminal penalties may be inflicted "if the accused has committed some act, has engaged in some behavior, which society has an interest in preventing." Ibid. The defendant does not claim that Connecticut has no interest in preventing a person's possession of heroin with intent to sell, even if such conduct stems from some compulsion brought on by drug dependence. The statute on its face does not violate the constitutional prohibition against cruel and unusual punishment. The trial court did not err in ruling as it did on this *334 issue in denying the defendant's motion for a directed verdict. Practice Book § 480. We need not consider other possible grounds of unconstitutionality not raised by the defendant at trial. State v. Johnson, supra.
There is no error.
In this opinion the other judges concurred.
NOTES
[1] "[Public Acts 1971, No. 812 § 1. General Statutes] Sec. 19-480a. PENALTY FOR ILLEGAL MANUFACTURE, SALE, PRESCRIPTION, ADMINISTRATION BY NON-DRUG-DEPENDENT PERSON. Any person who manufactures, sells, prescribes, dispenses, compounds, transports with the intent to sell or dispense, possesses with the intent to sell or dispense, offers, gives or administers to another person any narcotic drug or more than one kilogram of a cannabis-type drug, except as authorized in this chapter, and who is not, at the time of his arrest, a drug-dependent person, for a first offense, shall be imprisoned not less than ten years nor more than twenty years; and, for a second offense, shall be imprisoned not less than fifteen nor more than thirty years; and for any subsequent offense shall be imprisoned for thirty-five years." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2857866/ | Davis v. State
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-90-118-CR
JACK WARREN DAVIS,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF COMAL COUNTY, 22ND JUDICIAL DISTRICT
NO. CR89-251, HONORABLE ROBERT T. PFEUFFER, JUDGE
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 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 shoulder-length 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 leg--no 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 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's 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 her 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's 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's 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 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's, 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's 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's 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's, 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's
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 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's 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's
door or an announcement of "maintenance." She said she later heard appellant make a comment
about how he got Kathie Balonis's 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's 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's door was shut. As French was on her way out her door to see what was going
on at Kathie Balonis's 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,
443 U.S. 307 (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's 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's 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
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's 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 you--after 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 present-sense 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.
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 grand-jury 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's 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.
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 due-process rights. See Webb v. Texas, 409 U.S. 95 (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 (1986); United States
v. Simmons, 670 F.2d 365, 371 (D.C. Cir. 1982), cert. denied, 464 U.S. 835 (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, 388 S.E.2d 72, 79-80 (N.C. 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 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, 110 S. Ct.
2603 (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 (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 (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 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 (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 (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 (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 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 good-faith 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 O. 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. 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. 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).
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
(1988); California v. Trombetta, 467 U.S. 479 (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. 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.
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, 110 S. Ct.
291 (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, 111 S. Ct. 61 (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.
J. Woodfin Jones, Justice
[Before Justices Jones, Kidd and B. A. Smith]
Reversed and Remanded
Filed: May 13, 1992
[Publish]
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 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2584307/ | 18 N.Y.2d 982 (1966)
Sidney M. Rothschild et al., Appellants,
v.
World-Wide Automobiles Corporation et al., Defendants, and Samuel C. Dretzin, Respondent.
Court of Appeals of the State of New York.
Argued December 1, 1966.
Decided December 30, 1966.
Daniel Rosen for appellants.
Jay Leo Rothschild for respondent.
Judges FULD, VAN VOORHIS, SCILEPPI and BERGAN concur in Memorandum; Judge BURKE dissents in an opinion in which Chief Judge DESMOND and Judge KEATING concur.
*983MEMORANDUM.
Order granting summary judgment dismissing complaint affirmed, with costs to defendant-respondent. Plaintiffs do not establish in support of their complaint and in opposition to the motion for summary judgment that they had a contract which could form a basis for a cause of action against defendant-respondent for interference; nor do they in any event show facts which would impute a personal liability to defendant-respondent for acts of tort chargeable to the corporations of which the latter was an officer and director. The causes of action based upon purported restraint of trade are not supported by any fact in plaintiffs' proof in opposition to the motion for summary judgment. What is shown is that defendant-respondent attempted to prevent the extension of a franchise *984 for plaintiffs to sell products of a single manufacturer of automobiles into close competition with a territory in which defendant-respondent had an interest. There is hence not a sufficient showing of monopolistic practices to warrant a trial on that issue.
BURKE, J. (dissenting).
Plaintiffs appeal from a unanimous reversal by the Appellate Division, First Department, of an order of the Supreme Court, New York County, at Special Term, denying defendant Dretzin's motion to dismiss the four causes of action alleged against him in the complaint herein and for summary judgment.
The complaint purports to allege 12 different causes of action. The eighth and ninth are based on Dretzin's alleged inducement of others to conspire against plaintiffs (hereinafter referred to simply as "plaintiff") for the purpose of preventing his engaging in lawful competition with the conspirators in the sale of Volkswagen automobiles, in violation of section 340 of the General Business Law (the Donnelly Act).
Defendant Dretzin was at the time in question a stockholder and director in both World-Wide Automobiles Corporation (World-Wide) and Queensboro Motors, Inc. (Queensboro), both defendants here, and both alleged to be parties to the conspiracy. World-Wide is a wholesale distributor of Volkswagen automobiles, which function includes selection of "authorized dealers" for sale of these cars to the general public. Queensboro is an authorized Volkswagen dealer in the borough of Queens in the City of New York. It was the desire of the individual plaintiff, Rothschild, to obtain a franchise as an authorized Volkswagen dealer and toward this end he secured through a mutual friend an introduction to Dretzin who put him in touch with the officers of World-Wide in charge of selecting new dealers.
After a series of negotiations between plaintiff and World-Wide, Rothschild was informed that he had been "approved as the dealer prospect for the Volkswagen dealership to be located in Merrick, New York." This approval was contingent, however, upon his securing a site for the dealership satisfactory to World-Wide and final approval of the appointment by Volkswagen of America, Inc., also a defendant and alleged co-conspirator and the Volkswagen importer from whom World-Wide had itself received its franchise. The dealership was to be located in Merrick, New York, but plaintiff finally selected a site in *985 Freeport, New York, which borders Merrick, and this was apparently agreeable to World-Wide.
At this stage of the negotiations, plaintiff alleges that he contacted Dretzin by phone in order to thank him for his assistance. He also alleges that when he informed Dretzin of the location of the dealership Dretzin announced he had not realized that Rothschild intended to sell Volkswagens in competition with Dretzin and other dealers who were located in this market. Dretzin thereupon threatened to do everything in his power to have the dealership cancelled. Plaintiff claims further that Dretzin induced other Volkswagen dealers to join him in bringing pressure upon World-Wide and thus succeeded in blocking the award of the dealership to plaintiff.
Plaintiff's complaint adequately states a cause of action based upon conspiracy to restrain trade in violation of the Donnelly Act. The affidavits and exhibits submitted on the motion for summary judgment raise a triable issue of fact as to whether a Donnelly Act violation was committed and whether such violation caused the damages claimed by plaintiff.
The question of whether there was here an unlawful conspiracy can only be answered when the nature of the alleged restraint has been fully canvassed. I am not prepared to say on this motion for summary judgment whether the restraint was purely "vertical" in its origin, and thus lawful if reasonable, or "horizontal," and thus per se unlawful. An attempt is made to characterize what allegedly occurred between Dretzin and the other dealers and World-Wide as a "vertical assignment to dealers of areas of primary responsibility." But this, of course, is not at all what plaintiff alleges. He claims that Dretzin and the other dealers entered into a "horizontal" conspiracy among competitors to prevent the entry of plaintiff or any other potential competitor into their market. The arrangement would take on a "vertical" aspect only after the conspirators secured the acquiescence of World-Wide. Thus, this case, as alleged by plaintiff, is far different from those vertical arrangements, such as exclusive agency contracts, to which it would be likened and which arrangements our courts have held to be lawful absent a showing of conspiracy or concerted refusal to deal on the part of suppliers. (See, e.g., Locker v. American Tobacco Co., 121 App. Div. 443, affd. 195 N.Y. 565.) The genesis of the restraint of trade charged here is not a contract between a manufacturer *986 or supplier and its dealers, whereby the manufacturer or supplier, in order to secure the most effective distribution of its goods, agrees to sell only to certain dealers and not to others. Certainly restraint of trade is not the prime motive of such a contract and any anti-competitive effect it may have is only ancillary to its proper and legitimate business purposes. In the instant case the sole object of the conspiracy charged was the elimination of a potential competitor. Dretzin and the others are charged with intending and accomplishing through the combination of their forces what the Appellate Division for the First Department condemned when done by but a single powerful dealer, namely, exerting coercive pressure upon their supplier to persuade it not to sell to the plaintiff, for the purpose of destroying the plaintiff as a competitor in the supplier's product. (See Alexander's Dept. Stores v. Ohrbach's Inc., 266 App. Div. 535; see, also, Duchen v. Milliken Woolens, 19 A D 2d 521.) Conduct such as this would seem clearly to be violative of the Donnelly Act, which proscribes arrangements or combinations "whereby * * * Competition or the free exercise of any activity in the conduct of any business, trade or commerce * * * in this state is or may be restrained". (General Business Law, § 340.) Where the only purpose of the conspiracy charged is the frustration of that legislative intention to encourage competition found in the Donnelly Act, extended analysis is not necessary. (See Van Cise, Understanding the Antitrust Laws [1966], who notes at pp. 100-101, in discussing decisions under the Federal antitrust statutes, whose concept of a conspiracy in restraint of trade is similar to that embodied in the Donnelly Act, that "[h]orizontal conspiracies whose naked, sole purpose is to fix prices, allocate territory, destroy competition, or boycott suppliers or customers * * * are not ancillary to any lawful main purpose and have uniformly been condemned.")
In the light of the foregoing, it is clear that plaintiff is entitled to a trial to determine whether the unlawful conspiracy he describes was entered into by the defendants and whether his claimed injury was a result of that conspiracy.
Order affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537715/ | 142 B.R. 1017 (1992)
In re 6177 REALTY ASSOCIATES, INC., Debtor.
Bankruptcy No. 92-30830-BKC-RAM.
United States Bankruptcy Court, S.D. Florida.
July 20, 1992.
Kevin C. Gleason, Kinsey & Gleason, Boca Raton, Fla., for debtor.
*1018 L. Louis Mrachek, Gunster, Yoakley, Criser & Stewart, West Palm Beach, Fla., for Continental Realty Corp.
Jeffrey L. Zivyak, Zivyak, Adler, Klein & Liss, New York City, for Finch Apartment Corp.
Daniel L. Bakst, Ackerman, Bakst, Cloyd & Scherer, P.A., West Palm Beach, Fla., for trustee for Michael and July Papo.
ORDER DENYING APPLICATION FOR APPROVAL OF PROPOSED LEASES AND REQUIRING SURRENDER OF PREMISES
ROBERT A. MARK, Bankruptcy Judge.
This Chapter 11 case was filed on March 12, 1992. The debtor seeks approval of two proposed subleases of commercial space on the first floor of a co-op building located at 61 East 77th Street, New York, New York. The space is owned by Finch Apartment Corp. ("Finch") which objects to the subleases. Continental Realty Credit Corporation ("Continental"), the debtor's largest creditor, also objects.
The court heard argument on April 7, 1992. After considering the record, including the pleadings filed and arguments presented by the parties, and after review of the applicable law, the Court concludes that the Debtor's application must be denied.
BACKGROUND
Michael Papo, currently a Chapter 7 debtor in this Court, Case No. 91-33221, is the lessee of the space under a Master Lease from Finch. Papo has subleased the space to Judy Papo, his wife, who is also a Chapter 7 debtor, in a case consolidated with Mr. Papo's case. Daniel Bakst is the trustee ("Trustee") in the Papos' case.
Under a second sublease, the space is subleased back to Michael Papo. The interest of the debtor here arises under a third sublease in which Michael Papo is the sublessor landlord and the debtor, 6177 Realty Associates, Inc. ("Debtor" or "6177 Realty"), is the tenant.
Continental is this Debtor's largest creditor with a claim alleged to be in excess of $2.7 million. Continental also claims to hold a leasehold mortgage encumbering all interests in the property held by this Debtor and by the Papos individually.
As part of a stipulation entered on the record in the Papo case on February 11, 1992, the Trustee was granted an extension through February 21, 1992 to assume the Papos' lease and sublease interests in the commercial space at issue here. The Trustee did not move to assume and therefore, under § 365(d)(4), all leasehold and subleasehold interests of the Papos were deemed rejected and the Trustee and Papos were obligated to surrender possession.
The Issue: Did Rejection of the Papos' Interests Terminate the Leases and Subleases and Thereby Extinguish Any Rights of This Debtor in the Property?
DISCUSSION
Finch and Continental argue that the Trustee's rejection of Papo's interest in the Master Lease from Finch terminates the Master Lease and all subleases including the third sublease from Papo to the Debtor. The Debtor acknowledges that by operation of § 365(d)(4), the interest of the Papos and the Papos' estate was extinguished when the leases were not timely assumed. The Debtor argues that rejection under § 365(d)(4) only determines the landlord's rights with respect to the Papos and their estate but does not resolve state law questions which may remain regarding the rights of this Debtor as a sublessee.
I have reviewed the cases cited by the parties. I have also read portions of an article written by Michael Andrew, Andrew, Executory Contracts in Bankruptcy: Understanding "Rejection", 59 U.Colo.L.Rev. 845 (1988). Professor Andrew's arguments are persuasive regarding the effect of rejection of certain executory contracts. His "no thank you" concept of rejection as opposed to the more traditional "zap" theory of rejection provides a logical framework for analyzing certain disputes including, for example, the enforceability of arbitration clauses or covenants not to compete after rejection of an executory contract.
*1019 This Court agrees that rejection does not always equal termination of executory contracts. I nevertheless agree with the majority of cases which hold that rejection does equal termination of non-residential real property leases in which the debtor or Trustee is the lessee. See Sea Harvest Corp. v. Riviera Land Co., 868 F.2d 1077 (9th Cir.1989); In re Giles Associates, Ltd., 92 B.R. 695 (Bankr.W.D.Tex. 1988); In re Bernard, 69 B.R. 13 (Bankr. D.Haw.1986); In re Southwest Aircraft Services, Inc., 53 B.R. 805 (Bankr.C.D.Cal. 1985).
The primary reason for reaching this result is the specific statutory language in § 365(d)(4). That section provides that if the Trustee does not assume an unexpired lease within 60 days of the filing date or within such time as the Court may have fixed, "then such lease is deemed rejected, and the Trustee shall immediately surrender such non-residential real property to the lessor." § 365(d)(4).
It is this surrender language in § 365(d)(4) which renders rejection of a non-residential real property lease different from other executory contracts in which rejection may not equal termination. As explained by Judge Russell in the Southwest Aircraft case, "by requiring that upon rejection under § 365(d)(4), `the Trustee shall immediately surrender such non-residential real property to the lessor,' it is clear Congress intended that rejecting a lease terminates the lease." 53 B.R. at 810.
The Giles and Bernard decisions also focus on § 365(d)(4) and the federal policy embodied in that section. As explained in Giles, the import of § 365(d)(4) is to treat rejection as a breach that is so serious that immediate surrender is mandatory. "The breach plus the surrender obligation can only be seen as termination of any of the Trustee's or Debtor's rights in the leasehold. Otherwise the face of the statute and its history are meaningless." 92 B.R. at 698. In Bernard, Judge Chinen discussed the legislative history and purpose of § 365(d)(4) and noted that "this immediate surrender of the premises upon rejection of the lease was to enable the lessors to once again rent the premises and to earn income from the demised premises." 69 B.R. at 14.
The Bernard and Giles cases addressed the claims of creditors holding mortgages on the leases at issue. In this case, the interest is that of a sublessee, but the question is the same can a mortgagee or sublessee retain any interest upon rejection of the underlying lease? The logic and rationale in Bernard and Giles is compelling and convince this Court that the answer is no. Rejection of a non-residential lease results in termination of the lease. Once the underlying lease is terminated, leasehold mortgagees or sublessees retain no interest that can be pursued in bankruptcy court or state court.
The surrender remedy specially provided in § 365(d)(4) by Congress embodies a federal policy to ensure that unless extended by the Court, landlords obtain possession of their property within sixty (60) days of the filing if the lease is not assumed. It would be contrary to this policy to allow mortgagees or sublessees whose rights are derived solely from a debtor's interest as direct lessee to continue to tie up the property with litigation in bankruptcy court or in state court.
By contrast, deeming rejection to be termination is consistent with the public policy embodied in § 365(d)(4) and does not prejudice the rights of leasehold mortgagees or sublessees. Depending upon the terms of their mortgage or sublease, these parties may have standing to seek assumption of the underlying lease to protect their rights. But, they must act within the statutorily prescribed sixty (60) days.
The Debtor relies primarily on In re Storage Technology Corp., 53 B.R. 471 (Bankr.D.Co.1985). In that case, the court held that rejection does not have the conclusive effect of terminating even a non-residential real property lease. The Storage Technology decision was discussed and rejected by the Giles and Bernard courts in opinions which I find persuasive. Moreover, the court in Storage Technology was faced with relationships and potential equities that are different from those that exist here. Here the underlying Papo leases were seriously in default. Moreover, both *1020 the Debtor and the Papos are substantially in debt to Continental, which holds a mortgage on all of these leasehold interests. The Papos' Trustee made no effort and had no ability to cure the underlying lease. This Debtor did not offer nor was it in a position to cure the defaults in the underlying lease even if it had attempted to require assumption by the Trustee.
Thus, unlike Storage Technology, there is no equitable argument here that would support preserving any rights for this Debtor. Finch and Continental are both entitled to enforce their rights in the property free of any former interest of the Papos based upon the underlying rejection and required surrender by the Papos. It would be harsh and inequitable to require these parties to separately litigate here or in state court against this Debtor, a corporation controlled by the Papos which holds rights only through the Papos' senior leases.
The Court finds it unnecessary and inappropriate to consider what rights, if any, the Debtor/sublessee could claim under New York law following a breach by the lessee. Instead, I agree with the comment by Judge Russell in Southwest that under the Supremacy Clause, § 365(d)(4) preempts or supersedes any state law rights that the sublessee or mortgagee could assert following a breach by the lessee. 53 B.R. at 810. The Giles court also noted that § 365(d)(4) is not affected by separate state law doctrines concerning the termination of leases: "It is very clear that the federal policy concerning leases and inaction on the part [of] the debtor-lessor clearly supersedes any state law considerations." 92 B.R. at 696. Thus, there is no reason to analyze the rights, if any, which 6177 Realty could assert under state law following the breach by the Papos and resulting termination of their leases.
Having determined that the rejection of the underlying interest of the Papos constitutes termination of all of the leases lower in the chain, including the sublease to 6177 Realty, two conclusions are inescapable. First, the Debtor held no interest in the property as of the filing date. The Papos' interest was extinguished and the leases and subleases terminated as of February 21, 1992 prior to the filing of this Chapter 11 petition. Second, there is no need to require further litigation in this Court or in the state court to determine the rights of 6177 Realty in the property. Rather, having concluded that the underlying lease is terminated, the landlord is entitled to immediate surrender of the premises not only by the Papos but also by 6177 Realty and any other parties who claim an interest in the premises. See In re Elm Inn, Inc., 942 F.2d 630 (9th Cir.1991) (holding that it is appropriate for the bankruptcy court to enter an order compelling surrender of the premises once a lease has been rejected under § 365(d)(4)).
For the foregoing reasons, it is
ORDERED as follows:
1. The Debtors' application for approval of proposed leases is denied.
2. Finch Apartment Corporation is entitled to immediate possession of the leasehold property free and clear of any claim or interest of this Debtor. The sublease interest of this Debtor is deemed terminated.
DONE AND ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537722/ | 918 A.2d 1151 (2007)
In the Matter of the PETITION OF the STATE of Delaware FOR a WRIT OF MANDAMUS.
No. 54, 2007.
Supreme Court of Delaware.
Submitted: February 15, 2007.
Decided: February 16, 2007.
Loren C. Meyers, and Paul R. Wallace, Department of Justice, Wilmington, DE, for the State of Delaware.
J. Brendan O'Neill, Kevin J. O'Connell, Bernard J. O'Donnell, and Nicole M. Walker, Assistant Public Defenders, Wilmington, DE, for Defendant James E. Cooke.
Charles M. Oberly, III, and Karen V. Sullivan, Oberly, Jennings & Rhodunda, P.A., Wilmington, DE, for Judge Jerome O. Herlihy.
Before STEELE, Chief Justice, HOLLAND and BERGER, Justices.
HOLLAND, Justice:
This Court has before it a petition that seeks to invoke its original jurisdiction for the purpose of issuing an extraordinary writ. The petition was filed by the State of Delaware and requests that this Court issue a writ of mandamus to Superior Court Judge Jerome O. Herlihy. The underlying matter that gave rise to the present proceeding is an evidentiary ruling during an ongoing capital murder trial.
James E. Cooke ("Cooke"), who is represented by two attorneys, is charged with First Degree Capital Murder and other serious offenses, and has pleaded not guilty. On the basis of psychiatric examinations and other evidence, Cooke's counsel intend to contest the State's proof of guilt, but also plan, concurrently, to present mitigation evidence of Cooke's mental illness. Several days prior to the beginning of trial, Cooke's defense counsel advised the trial judge that, based on their conversations with Cooke, he was not in agreement with presenting evidence of mental illness that would support a verdict of guilty but mentally ill ("GBMI").
The State seeks review of an order issued January 30, 2007, in which the Superior Court denied a motion made by prosecutors to preclude presentation by Cooke's defense counsel, during the guilt phase of the trial, of any evidence that would support *1153 a GBMI verdict or any other mental illness defense. The State asks this Court to adopt a per se rule that a defense attorney is prohibited from advancing a mental illness defense in the guilt phase if the defendant is opposed to that approach. Neither the State, nor the attorneys for Cooke, nor the trial judge's attorneys[1] were able to find a prior case from any jurisdiction deciding that exact issue.
In this expedited matter, we announced our decision yesterday because the defense was scheduled to begin today in the guilt phase of the ongoing capital murder trial. For the reasons stated in this Opinion, we have concluded that a writ of mandamus proceeding is not the proper procedural context in which to decide the issue raised by the State. Accordingly, the State's petition for the issuance of an extraordinary writ is denied.
Facts[2]
On August 8, 2005, the grand jury indicted James Cooke, charging him with two counts of Murder in the First Degree, Rape in the First Degree, Burglary in the First Degree, Arson in the First Degree, Reckless Endangering in the First Degree two counts of Burglary in the Second Degree, Robbery in the Second Degree, and two counts of Misdemeanor Theft. The State is seeking the death penalty on each count of murder. Trial began in the Superior Court on Friday, February 2, 2007, before the Honorable Jerome O. Herlihy.
On Friday, January 19, 2007, Judge Herlihy conducted an office conference for the purposes of discussing jury selection and scheduling. Immediately prior to this conference, prosecutors had received information from defense counsel on the question of presenting a mental illness defense at trial. After the various issues about jury selection, voir dire scheduling, and the use of uncharged misconduct evidence had been discussed, Judge Herlihy asked Cooke's counsel if there were any issues they wished to raise at that time. Counsel for Cooke, J. Brendan O'Neill, Esq., responded that "there's probably something we should bring up and Mr. Cooke and co-counsel [Kevin J. O'Connell, Esq.] and I have talked about it at length." As O'Neill explained, "Mr. Cooke has one idea about how to defend this case; his counsel has a different idea."
According to O'Neill, Cooke and defense counsel had discussed his defense at great length and had essentially "agreed to disagree." Cooke had been told by counsel that in the opinion of defense counsel, "it is his lawyer's discretion whether to present a particular defense. . . ." More precisely, a decision about the purpose of the litigation rested with Cooke, but decisions about trial tactics and strategy were for counsel to make in the guilt phase of the trial. O'Neill had also told Cooke that, in any penalty hearing, counsel also made the decision about presentation of mitigation evidence.
In defense counsel's view, the defense could present evidence of mental illness to support a verdict of GBMI, yet have Cooke maintain his innocence, as he may testify that he is factually innocent of the crimes. Cooke has at all times maintained that another person committed the charged offenses. At this point, O'Neill observed that before presentation of evidence began, they were going to need to go "hash this out on the record, and go forward from there."
*1154 Prosecutors then raised the question whether defense counsel could advance evidence of mental illness, over Cooke's objections and without undercutting a defense of actual innocence. O'Neill again observed that the question needed to be addressed formally before opening statements, including putting Cooke on the record. Prosecutors again broached this issue one week later on the afternoon of January 26.
In the view of prosecutors, it was hardly clear that defense counsel could choose to proceed with a particular mental illness defense when the defendant was adamant about his factual innocence. Given the uncertain state of the law, prosecutors indicated the State might ask the trial judge to certify questions to this Court. Before the Superior Court recessed for the day, prosecutors asked the trial judge to engage in a colloquy with Cooke, as had been suggested in the office conference on January 19. The defense took no position on whether the issue should be certified to this Court.
On January 26, the trial judge deferred any ruling on the issue. Before proceedings resumed on Monday, January 29, both the State and the defense had submitted additional memoranda to the trial judge. The trial judge indicated that no decision would be made on the issue that day.
On Tuesday, January 30, prosecutors moved to preclude the introduction of evidence, during the guilt phase, that would support a GBMI verdict or any other mental illness defense:
unless and until one of two things happens: either counsel tells Your Honor that the extant dispute between Mr. Cooke and counsel about the pursuit of that defense has been resolved and the defendant now agrees with the presentation of the defense or unless and until Your Honor engages in a colloquy with the defendant and satisfies Your Honor that the defendant has assented to the [advancing of evidence of mental illness].
In the State's view, "the presentation of evidence supporting a GBMI verdict was sufficiently akin to a guilty plea to make the decision to present such evidence one for the defendant alone to make." The record, according to prosecutors, established that (i) defense counsel intended to pursue a verdict of GBMI; (ii) Cooke has expressly objected to his attorneys' plans; (iii) Cooke has told his attorneys "that he prefers to pursue a factual defense of innocence . . . and also does not want to hear evidence of mental illness presented on his behalf"; and (iv) defense counsel intend to present evidence of mental illness supporting a GBMI verdict, during the guilt phase of the trial, notwithstanding Cooke's wishes. After hearing from defense counsel on the issue, the trial judge denied the State's application to preclude the defense from introducing evidence that would support a GBMI verdict.
Defense Decision Debate
A criminal defendant has authority over certain "fundamental decisions regarding the case, as to whether to plead guilty, waive a jury, testify in his or her own behalf, or take an appeal."[3] Counsel, however, bears principal responsibility for the conduct of the defense.[4] In particular, counsel has the responsibility for determining "what arguments to pursue,"[5] and *1155 "what defenses to develop."[6]
According to the State, its petition presents one question: in the event of an irreconcilable disagreement between defense counsel and the defendant about a decision to seek a verdict of guilty but mentally ill, do the defendant's wishes prevail? The State is asking this Court to place the decision to pursue a mental illness defense in the category of issues upon which only the defendant can decide. Although the State has been unable to find any controlling precedent that is exactly on point, it makes an argument based upon Delaware Professional Conduct Rule 1.2, Scope of Representation, which states the following:
(a) [A] lawyer shall abide by a client's decisions concerning the objectives of representation and . . . shall consult with the client as to the means by which they are to be pursued . . . In a criminal case, the lawyer shall abide by the client's decision, after consultation with the lawyer, as to a plea to be entered, whether to waive jury trial and whether the client will testify.
Thus, Rule 1.2 expressly provides that the client is the ultimate decision maker as to whether to enter a plea, waive a jury trial or testify at trial.[7]
The State argues that pursuit of a GBMI verdict is the "functional equivalent of a plea of guilt with a request for mitigation of the nature of his sentence (death) or the manner it is to be served (partially in a mental facility . . . )." In response to that argument, Cooke's attorneys assert the United States Supreme Court held in Florida v. Nixon that a concession of guilt is not the functional equivalent of a guilty plea.[8] In Nixon, the Supreme Court distinguished a concession of guilt from a guilty plea as follows:
Despite [defense counsel's] concession, Nixon retained the rights accorded a defendant in a criminal trial. CF. Boykin, 395 U.S. [238] at 242-243 and n. 4, 89 S.Ct. 1709[, 23 L.Ed.2d 274] (a guilty plea is "more than a confession which admits that the accused did various acts," it is a "stipulation that no proof by the prosecution need be advanced"). The State was obliged to present during the guilt phase competent, admissible evidence establishing the essential elements of the crimes with which Nixon was charged. . . . Further, the defense reserved the right to cross-examine witnesses for the prosecution and could endeavor, as [defense counsel] did, to exclude prejudicial evidence. See supra, at 558. In addition, in the event of errors in the trial or jury instructions, a concession of guilt would not hinder the defendant's right to appeal.[9]
In Nixon, the defense attorney conceded guilt and then presented evidence of mental illness during the penalty phase with the goal of avoiding a death sentence. He consulted several times with his client but never obtained explicit consent to conduct the defense in this manner.[10] Because the prosecution was still required to prove its case beyond a reasonable doubt, the United States Supreme Court held that conceding guilt during the guilt phase of a capital *1156 murder trial was not the functional equivalent of a guilty plea.[11] Cooke's defense counsel submit their position is strengthened by the Supreme Court's ruling in Nixon because, unlike the attorney in that case, they will not concede that Cooke is guilty. Moreover, Cooke's attorneys assert that a GBMI verdict is an alternative that will only be reached by the jury if they are persuaded that the State has met its burden of proof.
"In Wainwright v. Sykes, the United States Supreme Court held that the attorney possesses the right to decide certain strategic and tactical decisions, including what witnesses to call, whether and how to conduct cross-examination, what trial motions should be made, and what evidence should be introduced."[12] Based on Wainwright, Cooke's counsel assert that the decision to present evidence of mental illness at Cooke's trial is a tactical one solely within their province. Cooke's defense counsel argue that the principle that the attorney is the one who chooses whether to pursue a mental health defense was solidified by the United States Supreme Court in Florida v. Nixon.[13]
State Acknowledges Uncertainty
The State argues that the result in Nixon would have been different if the defendant had expressly objected. Nevertheless, with commendable candor the State acknowledges "the uncertain state of the law" underlying its claim. In fact, the State has consistently acknowledged that it does not have a clear right to the relief sought by its petition.
During the voir dire of prospective jurors on January 30, 2007, Deputy Attorney General Steve Wood raised the possibility of the State's making a request for certification. He noted that while no decision had been reached on whether to make such a request, the law was less than clear.
I think it is incumbent upon me to advise the Court that there is a growing sentiment, although not a decision yet, in our office to perhaps ask you to certify the question of essentially who is controlling the defense guilty but mentally ill versus not guilty to the Delaware Supreme Court.
The reason for that is, although we're still researching the matter, I don't know how to say this in legal language, but in a sense Your Honor is being called to make a decision in a capital case with no binding precedent that I can find or that we've found yet, not that I am a scholar here, but my reading of the cases that I've looked at, including Florida v. Nixon, the law review articles we've given Your Honor and everything else, is that this is about a 50-50 call, and I can't find a case right on point, and we haven't found one yet. . . .
* * *
I am I am rarely standing up before a court am I more uncertain about the law, and I don't mean that to sound arrogant, and I'm not trying to sound *1157 that way at all. It's just that I've read these cases, and boy, they're all over the map, and worse yet, I can't find anything, and I'm told yet that our office has not found anything that is factually on all fours; in other words, GBMI in a guilt phase versus Not Guilty by Reason of Insanity, or how one conduct the mitigation case in the penalty phase.
* * *
[B]ut as I said before, the more I look at the cases, the more I realize that through no fault of any Appellate Court, of course, Your Honor has been in some sense cast adrift at sea, because we cannot find a case that we could site to you as binding precedent either way. What I instead found are cases that I think, in good faith, I could use to argue either side of the question.
In his email to Judge Herlihy on January 27, 2007, Mr. Wood wrote: "We remain very concerned about our inability to find clear post-Nixon authorities directly on point." During a conference with Judge Herlihy on January 30, 2007, Mr. Wood characterized the issue as "a close call" and the case law as "so murky." In his last communication with Judge Herlihy before the State filed its petition for a writ of mandamus, Mr. Wood wrote: "Your Honor is well aware that there is no controlling authority directly on point."
Writ of Mandamus
"A writ of mandamus is a command that may be issued . . . to compel the performance of a duty to which the petitioner has established a clear legal right."[14] Because mandamus is an extraordinary remedy, the petitioner must establish a clear right to performance of the duty in question; no other adequate legal remedy is available; and the trial court has arbitrarily failed or refused to perform its duty.[15] "[I]n the absence of a clear showing of an arbitrary refusal or failure to act, this Court will not issue a writ of mandamus to compel a trial court to perform a particular judicial function, to decide a matter in a particular way, or to dictate the control of its docket."[16]
In addition,
It is clear that only exceptional circumstances amounting to a "judicial usurpation of power" will justify the invocation of the extraordinary writ of mandamus. One who applies to an appellate court for a writ of mandamus must demonstrate to the reviewing court that the entitlement to the writ is both "clear and indisputable."[17]
Conclusion
The State has not demonstrated that it has a clear legal right to require the trial judge to preclude Cooke's defense attorneys from presenting evidence that would support a GBMI verdict. Accordingly, the State's petition for a writ of mandamus must be denied.
NOTES
[1] In accordance with Supreme Court Rule 43, the trial judge notified the Clerk of this Court that he would participate in this proceeding and retained outside counsel to represent him.
[2] These facts are taken primarily from the State's petition in this matter.
[3] Jones v. Barnes, 463 U.S. 745, 751, 103 S.Ct. 3308, 77 L.Ed.2d 987 (1983).
[4] Id. at 753 n. 6, 103 S.Ct. 3308; New York v. Hill, 528 U.S. 110, 114-15, 120 S.Ct. 659, 145 L.Ed.2d 560 (2000).
[5] Hill, 528 U.S. at 115, 120 S.Ct. 659 (citing Jones, 463 U.S. at 751, 103 S.Ct. 3308).
[6] Wainwright v. Sykes, 433 U.S. 72, 93 n. 1, 97 S.Ct. 2497, 53 L.Ed.2d 594 (1977) (Burger, C.J., concurring).
[7] The request to expand the category of issues upon which only the defendant can decide is not without precedent. In Red Dog v. State, 625 A.2d 245, 247 (Del.1993), this Court expanded the list of situations where the defendant, rather than the attorney, is the ultimate decision maker to include the decision whether to forego further appeals and to accept the death penalty.
[8] Florida v. Nixon, 543 U.S. 175, 188, 125 S.Ct. 551, 160 L.Ed.2d 565 (2004).
[9] Id.
[10] Id. at 189, 125 S.Ct. 551.
[11] Id. at 188-89, 125 S.Ct. 551.
[12] Phillips, Jean K. Gilles, and Joshua Allen, Who Decides: The Allocation of Powers Between the Lawyer and the Client in a Criminal Case?, 71-Oct. J. Kan. B.A. 28 (2002) (citing Wainwright v. Sykes, 433 U.S. 72, 93 n. 1, 97 S.Ct. 2497, 53 L.Ed.2d 594 (1977) (Burger, C.J., concurring)); see also Strickland v. Washington, 466 U.S. 668, 690-91, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984).
[13] See Nixon, 543 U.S. at 190-91, 125 S.Ct. 551 (citing Goodpaster, The Trial for Life: Effective Assistance of Counsel in Death Penalty Cases, 58 N.Y.U.L. Rev. 299, 329 (1983); Performance of Defense Counsel in Death Penalty Cases § 10.9.1, Commentary (rev. 3d 2003), reprinted in 31 Hofstra L. Rev. 913, 1040 (2003)).
[14] Clough v. State, 686 A.2d 158, 159 (Del. 1996).
[15] In re Bordley's Petition for a Writ of Mandamus, 545 A.2d 619, 620 (Del.1988) (per curiam).
[16] Id.
[17] In re Petition of State for a Writ of Mandamus, 603 A.2d 814, 815 (Del.1992) (citations omitted). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537743/ | 142 B.R. 908 (1992)
In re Danny STOKES; Sandra Roberts-Stokes, Debtors.
Andrea R. BRAUD, Plaintiff,
v.
Danny STOKES; Sandra Roberts-Stokes, Defendants.
In re Hiawatha T. ROBERTS, Jane G. Roberts, Debtors.
Andrea R. BRAUD, Plaintiff,
v.
Hiawatha T. ROBERTS, Defendant.
Bankruptcy Nos. 91-46756 NR, 91-47835 T, Adv. Nos. 92-4060 AN, 92-4077 AN.
United States Bankruptcy Court, N.D. California.
July 23, 1992.
William F. McLaughlin, San Francisco, Cal., for defendant Hiawatha T. Roberts.
Harvey Sohnen, Walnut Creek, Cal., for plaintiff Andrea Braud.
Winslow West, San Francisco, Cal., for defendants Danny Stokes, Sandra Roberts-Stokes, Hiawatha Roberts.
DECISION AND ORDER
RANDALL J. NEWSOME, Bankruptcy Judge.
These Chapter 7 adversary proceedings are before the Court upon the Court's own *909 motion to dismiss[1] pursuant to status conferences conducted on March 11, 1992. The simple issue presented by both proceedings is whether debt arising from an attorney's professional negligence is non-dischargeable in the attorney's bankruptcy as a defalcation by a fiduciary within the meaning of 11 U.S.C. Section 523(a)(4).
The complaints are grounded on the same set of facts. On August 2, 1985 plaintiff suffered injuries from a fall in a Woolworth's department store in Oakland, California. On August 5, 1985 plaintiff retained the debtors, who are attorneys licensed by the State of California, to pursue her claim against Woolworth's. Debtors, on behalf of plaintiff, filed a complaint for damages in the appropriate court on July 25, 1986. Debtors failed, however, to serve the defendant within three years after the complaint was filed, and on March 27, 1990 the Court dismissed the complaint as pursuant to California Code of Civil Procedure Section 583.250.
On December 20, 1990 the plaintiff filed a complaint against the defendants claiming that they acted negligently in failing to serve Woolworth's within the requisite three-year period. No allegations of fraud or other misconduct were pled.
The Superior Court of Alameda County referred plaintiff's malpractice action to an arbitrator, who found that the defendants' negligence was the cause of the plaintiff's loss, and awarded damages to the plaintiff in the amount of $6,000. Costs of $775.65 were also allowed. No party filed a request for a trial de novo of the matter, and pursuant to California Code of Civil Procedure Section 1141.20 the arbitrator's award became a final judgment.
On October 23, 1991 defendants Danny Stokes and Sandra Roberts-Stokes filed Chapter 7 petitions in this court. Defendant Hiawatha T. Roberts did so on December 10, 1991. These two adversary proceedings followed. The legal theory upon which both are premised is that defendants as attorneys owed a fiduciary obligation to the plaintiff as their client; that they caused the value of plaintiff's cause of action to be lost through their negligence; that property lost through the negligence of a trustee falls within the sweep of "defalcation" as that term is comprehended for purposes of Section 523(a)(4) (In re Graziano, 35 B.R. 589, 594 (Bankr. E.D.N.Y.1983)); and that the debt created by their negligence must therefore be non-dischargeable under that section. In support of this theory, plaintiff principally relies upon In re Gelman, 47 B.R. 735 (Bankr.S.D.Fla.1985) and In re Janikowski, 60 B.R. 784 (Bankr.N.D.Ill.1986). Both of those cases seem to hold (although not unequivocally) that the loss of a client's legal rights through the negligence of his attorney constitutes a defalcation by that attorney just as surely as "a failure to account for entrusted moneys would have been." Id. at 790.
I have no quarrel with much of what is said in Gelman and Janikowski. However, to the extent that those cases hold that Section 523(a)(4) makes nondischargeable debts arising from mere negligence by an attorney who does not hold the position of a trustee with regard to his client's property, I disagree. While it appears to cover the vast array of relationships which might be deemed fiduciary or confidential under state law, as a matter of federal law only fiduciary relationships arising from express or statutory[2] trusts *910 are covered by the statute. State law, however, governs in determining whether such trusts exist. Chapman v. Forsyth, 43 U.S. 202, 208, 11 L.Ed. 236 (1844); Ragsdale v. Haller, 780 F.2d 794, 796 (9th Cir. 1986); In re Hooper, 112 B.R. 1009, 1013 (9th Cir. BAP 1990).
As is true in other jurisdictions, "[i]t is . . . well established in California that the relationship of attorney and client is one of trust and confidence and that the attorney owes to his client all of the obligations of a trustee." Green v. MacAdam, 175 Cal. App.2d 481, 487, 346 P.2d 474 (1959) However, it is equally settled that having fiduciary duties akin to those of a trustee does not make one a trustee. E.g., Bainbridge v. Stoner, 16 Cal.2d 423, 428, 106 P.2d 423 (1940) (while the director of a corporation is imbued with the duties of a trustee, he is not a trustee of corporate property); In re Lamb, 61 Cal.App. 321, 328, 215 P. 109 (1923) ("not every obligation arising out of a personal confidence reposed in and voluntarily accepted by one for the benefit of another is a trust, within the legal meaning of the term.") Since no California statute elevates the attorney-client relationship to one of trustee-beneficiary status,[3] Section 523(a)(4) can come into play only if the defendants held the position of trustees of an express trust for the benefit of the plaintiff. The essential elements of an express trust are: "1) sufficient words to create a trust; 2) a definite subject; and 3) a certain and ascertained object or res. The intent to create a trust relationship rather than a contractual relationship is the key element in determining the existence of an express trust." In re Thornton, 544 F.2d 1005, 1007 (9th Cir.1976), quoted in In re Pedrazzini, 644 F.2d 756, 758 n. 2 (9th Cir.1981); see also, Estate of Johnston, 47 Cal.2d 265, 270, 303 P.2d 1 (1956); Cal. Prob.Code Sections 15201-15205 (West 1991). The creation of a trust requires more than the holding of property in the capacity of an agent or bailee. Some "estate" (i.e. right, title or interest) in the property must be conveyed to the trustee in order for a trust to come into existence. See Estate of Johnston at 270, 303 P.2d 1. In other words, "[i]f it appears that the purported settlor retained title and the right of control over property deposited with another, there is no trust." 11 B.E. Witkin, Summary of California Law, Trusts Section 33 (9th ed. 1990); see also, Carr v. Bank of Italy, 113 Cal.App. 6, 9, 297 P. 630 (1931); Bainbridge v. Stoner, 16 Cal.2d 423, 428, 106 P.2d 423 (1940) (director of corporation had no title to corporate property, and thus was not a trustee); Noble v. Learned, 153 Cal. 245, 250, 94 P. 1047 (1908) (no title to 40 shares of stock passed to holder of certificate); Monell v. College of Physicians & Surgeons, 198 Cal.App.2d 38, 51, 17 Cal.Rptr. 744 (1961) (client conveyed no title to funds held by his attorney to pay for client's medical bills and thus attorney was an agent rather than trustee). As has been noted in a different context:
An agent as such is not owner of the principal's property, although he may have powers with respect to it. That is clear. But a trustee is more than an agent. He owns the trust property subject to his duty to hold it for the benefit of the cestui que trust. Because one man undertakes to look after another's affairs he does not get legal title to the other's property. He may have all of the duties of loyalty that go with a confidential agency but he is still not a trustee.
Sherwin v. Oil City National Bank, 229 F.2d 835, 838-39 (3rd Cir.1956) (footnotes omitted).
While plaintiff's cause of action qualified as property capable of being held in trust (Restatement (Second) of Trusts Section 82 (1959)), there is no allegation in the complaint that plaintiff intended to and did in fact convey some species of title in her lawsuit to the defendants, and that defendants accepted that conveyance as trustees. The absence of such allegations is fatal to *911 plaintiff's cause of action under Section 523(a)(4). See, In re Hooper, 112 B.R. 1009, 1013 (9th Cir. BAP 1990).
A number of reported cases can be found which appear to gloss over the need for establishing the elements of an express trust as a prerequisite to prevailing under Section 523(a)(4). E.g., In re Woosley, 117 B.R. 524 (9th Cir. BAP 1990). The path marked by such cases would ultimately lead to Section 523(a)(4) being extended to encompass simple acts of negligence by agents, corporate officers, and the myriad of others who hold the status of fiduciaries under California law. This is precisely the path which the U.S. Supreme Court counselled against in Chapman v. Forsyth, supra almost 150 years ago, and which the U.S. Court of Appeals for the Ninth Circuit has repeatedly refused to follow. I must decline to follow it as well.
For the reasons stated above, these adversary proceedings are hereby DISMISSED WITHOUT PREJUDICE. Plaintiff shall have 20 days from the date of this order in which to file amended complaints. Should she fail to do so within that time period, dismissal of these adversary proceedings shall automatically be deemed "with prejudice," and as such, final and appealable.
NOTES
[1] As required by Franklin v. State of Oregon, State Welfare Division, 662 F.2d 1337, 1340-41 (9th Cir.1981), the plaintiff was given notice of the proposed dismissal and given an opportunity to submit written argument in response. Plaintiff filed a "post-status conference" memorandum on March 19, 1992.
[2] The cases usually refer to express, technical or statutory trusts. The term "technical trusts" was first used in this context by the U.S. Supreme Court in Chapman v. Forsyth, 43 U.S. 202, 208, 11 L.Ed. 236 (1844). It appears that the Court was referring to true or formal trusts by its use of this term, rather than those implied at law. See In re Pedrazzini, 644 F.2d 756, 758 n. 2 (9th Cir.1981); In re Holmes, 117 B.R. 848, 852 (Bankr.D.Md.1990).
As defined, "technical" is thus a redundancy, since its meaning is encompassed entirely by "express." 76 Am.Jur.2d Trusts Section 11, pg. 42 (1992). Since "technical trust" appears to be an obsolete term, and since it only serves to add to the confusion surrounding the meaning of this statute, reference to it should be abandoned.
[3] The one exception is Rule 8-101 of the Rules of Professional Conduct of the State Bar of California, which requires all funds held by an attorney for the benefit of a client to be deposited into a segregated trust account. Since the defendants are not alleged to have held funds of any kind, this rule has no applicability here. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537744/ | 918 A.2d 1210 (2007)
2007 ME 46
Chandra D. PILLSBURY
v.
David M. PILLSBURY.
Supreme Judicial Court of Maine.
Submitted on Briefs: December 20, 2006.
Decided: March 27, 2007.
Karen Frink Wolf, Jonathan M. Dunitz, Friedman Gaythwaite Wolf & Leavitt, Portland, for plaintiff.
Pamela S. Holmes, Amy B. McGarry, McGarry & Holmes, LLC, Wells, for defendant.
Panel: SAUFLEY, C.J., and CLIFFORD, ALEXANDER, CALKINS, and LEVY, JJ.[*]
CLIFFORD, J.
[¶ 1] David M. Pillsbury appeals from a divorce judgment as to Chandra D. Pillsbury entered in the District Court (Springvale, Janelle, J.). Although David asserts that the court erred in several respects, he focuses most of his contentions on the court's award of spousal support to Chandra. Because we agree with David that *1211 the court erroneously applied the spousal support statutory presumption based on a ten-year marriage, a provision that does not apply in this case, we vacate the judgment.
I. BACKGROUND
[¶ 2] David and Chandra Pillsbury married on December 11, 1993. They have two minor children. It was on September 18, 2003, that Chandra filed a complaint for divorce against David in the District Court on the ground of irreconcilable differences. David counterclaimed for divorce on the same ground. The parties were able to partially resolve the matter by agreement.
[¶ 3] Following a hearing, the court issued a divorce judgment dated December 14, 2005, and later, in January of 2006, an amended divorce judgment, which corrected a clerical error. The court found, inter alia, that: the parties had been married for twelve years; by agreement of the parties, Chandra left the work force in 1995 for ten years to raise their children; Chandra had recently obtained employment as a substitute teacher, earning an annual income of approximately $5000; given her education and the age of her children, Chandra is underemployed and capable of earning $17,000 per year; and David earns $40,000 per year at the Portsmouth Naval Shipyard, but he is capable of earning $50,000 per year there by accepting travel assignments as he has done in the past. The court concluded, "the presumption of an award of spousal support to [Chandra] in the amount of $125.00 per week, for a period of 6 years is reasonable" because it would approximately equal David's share of the equity in the marital home. Because Chandra wished to remain in the marital home, and because David did not feel that he had the ability to pay weekly support, the court awarded the marital home to Chandra, and also awarded to her David's share of the equity in the marital home as a lump sum spousal support payment, which the court found "reasonable and necessary for both her and the children." David filed this appeal.
II. DISCUSSION
[¶ 4] David contends that the court's award of spousal support to Chandra was error in three respects: (1) the court failed to identify the type, term, and limitations on the spousal support award, and the factors considered in awarding it; (2) the court based the award on an erroneous finding as to the length of the parties' marriage; and (3) the court erred in determining the parties' income potential. We inquire into an award of spousal support only to determine whether the trial court has exceeded its discretion. Urquhart v. Urquhart, 2004 ME 103, ¶ 3, 854 A.2d 193, 194. The court's underlying factual findings on which an award of spousal support is based are reviewed for clear error, and will be sustained if there is any competent evidence in the record to support them. Macomber v. Macomber, 2003 ME 1, ¶ 6, 814 A.2d 456, 457.
A. Sufficiency of Findings
[¶ 5] David argues that the court erred in failing to identify: what type of spousal support it was awarding Chandra, whether or how it applied any statutory presumptions, and the factors on which the court relied in awarding the spousal support. An award of spousal support is governed by 19-A M.R.S. § 951-A (2006). Section 951-A lists the five types of spousal support, each of which is awarded to fulfill a different statutory goal. 19-A M.R.S. § 951-A(2). General spousal support, for example, "may be awarded to provide financial assistance to a spouse with substantially less income potential than the other spouse so that both spouses can maintain a reasonable standard of living *1212 after the divorce." 19-A M.R.S. § 951-A(2)(A). In considering whether and which type of spousal support to award, section 951-A also lists seventeen factors that the court "shall consider," including the length of the marriage, the parties' ages, the ability of the parties to pay, and the parties' income history. 19-A M.R.S. § 951-A(5).
[¶ 6] An order granting spousal support "must state": (1) "[t]he type or types of support"; (2) "[t]he method or methods of payment, and the term and limitations imposed"; (3) whether "the support awarded is not, in whole or in part, subject to future modification"; and (4) "[t]he factors relied upon by the court in arriving at its decision to award or deny spousal support, if the proceeding was contested." 19-A M.R.S. § 951-A(1). The reasons supporting this requirement are many:
The trial court's duty to identify the type of support awarded is significant for a number of reasons. The enumeration of "types" of support by the Legislature serves as a guide for trial courts, and limits judicial authority to award spousal support to those listed. Further, the articulation of the type of spousal support is part of the trial court's duty to inform the parties of the reasons underlying its conclusions. The type of support awarded will also inform any appellate analysis required. Finally, the type of spousal support awarded will bear on any future motion to modify the award.
Urquhart, 2004 ME 103, ¶ 4, 854 A.2d at 194 (citation omitted). We have vacated judgments on the ground that such decisions did not contain the required statutory findings pursuant to section 951-A(1), despite the deferential standard of review applicable to support awards. See id.; see also Holt v. Watson, 2005 ME 33, ¶¶ 6, 7, 868 A.2d 891, 893-94 (vacating an award of spousal support purporting to provide for reimbursement support, but nevertheless applying a rebuttable presumption applicable only to general spousal support).
[¶ 7] In the instant case, although not explicitly using language mirroring section 951-A(1), the court did provide for each of the four requirements of an order awarding spousal support. First, the court's reference to "the presumption of an award of spousal support," a presumption applicable only to general support awards, indicates that the court was awarding general spousal support to Chandra. Indeed, the portion of section 951-A applicable to general support contains two rebuttable presumptions not applicable to any of the other types of spousal support:
There is a rebuttable presumption that general support may not be awarded if the parties were married for less than 10 years as of the date of the filing of the action for divorce. There is also a rebuttable presumption that general support may not be awarded for a term exceeding 1/2 the length of the marriage if the parties were married for at least 10 years but not more than 20 years as of the date of the filing of the action for divorce.
19-A M.R.S. § 951-A(2)(A)(1). Both of these presumptions may be rebutted by evidence "that a spousal support award based upon a presumption . . . would be inequitable or unjust." 19-A M.R.S. § 951-A(2)(A)(2). The court found that the parties were married for twelve years, and that "the presumption . . . of spousal support is reasonable," and awarded Chandra spousal support for a term equal to six years. This is a clear indication that the court applied the second presumption set out in subsection (2)(A)(1), applicable only to general support awards.
[¶ 8] Second, the court did state how that support was to be paid in ordering a lump sum payment. Third, section 951-A(4) *1213 provides that any award of spousal support may be modified "when it appears that justice requires." 19-A M.R.S. § 951-A(4). The court was required to make an express statement only if the support award was not subject to future modification; silence on this point by the court indicates application of the default provision of subsection (4), which allows for support to be modified in the future. 19-A M.R.S. § 951-A(4). Because the court made no express statements that the award may not be modified in the future, the award is modifiable pursuant to subsection (4), and the court's duty to state such pursuant to the third requirement of section 951-A(1) was satisfied.
[¶ 9] Finally, the court did recite the factors on which it relied in awarding spousal support pursuant to section 951-A(5), including the length of the parties' marriage, their income and income potential, their employment situations and education, the division of the marital home, and the parties' retirement funds. We are therefore persuaded that the court adequately satisfied each of the four divorce judgment requirements as set forth in 951-A(1).
B. Length of the Parties' Marriage
[¶ 10] David also contends that the court erred in finding that the parties were married for twelve years in awarding spousal support. We agree with David that the evidence does not support, but instead contradicts, the court's finding on the length of the parties' marriage. See Macomber, 2003 ME 1, ¶ 6, 814 A.2d at 457.
[¶ 11] Pursuant to the presumption of general support applied by the court, the length of the marriage is determined "as of the date of the filing of the action for divorce." 19-A M.R.S. § 951-A(2)(A)(1). There is no dispute that the parties married on December 11, 1993. There is also no dispute that Chandra filed her complaint for divorce on September 18, 2003. Thus, although the parties had been married twelve years by the time the divorce judgment was actually issued in December of 2005, for purposes of determining spousal support pursuant to section 951-A(2)(A)(1), the duration of the marriage must be measured from December of 1993 to September of 2003, a period of just less than ten years. Accordingly, the court's consideration of the twelve-year marriage period for the purposes of applying the statutory presumption in section 951-A(2)(A)(1) is error.
[¶ 12] Moreover, the fact that the parties were married less than ten years for purposes of the statute means that, if the court awards general support, it must apply the rebuttable presumption that "general support may not be awarded if the parties were married for less than 10 years as of the date of the filing of the action for divorce." 19-A M.R.S. § 951-A(2)(A)(1). Chandra contends that, in any event, she presented enough evidence, and the court made sufficient findings and conclusions, to rebut that presumption. The language of the judgment, however, clearly indicates that the court did not consider the award of spousal support based on the presumption applicable to a marriage of less than ten years, as it was required to do, but rather applied the presumption applicable to a marriage of ten years or more. Because the court applied the wrong rebuttable presumption applicable to general spousal support, we must remand to the District Court for reconsideration of the award of spousal support.
[¶ 13] Finally, contrary to David's contentions, we discern no error in the court's determination of the parties' income potential, or in the court's manner of dealing with refinancing of the marital home.
The entry is:
*1214 Judgment vacated. Remanded to the District Court for further proceedings consistent with this opinion.
NOTES
[*] Justice Howard H. Dana participated in the initial conference but retired before this opinion was certified. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537760/ | 142 B.R. 172 (1992)
In re Joe Willie JACKSON and Mary C-M Jackson, Debtors.
Joe Willie JACKSON and Mary C-M Jackson, Plaintiffs,
v.
GENERAL MOTORS ACCEPTANCE CORPORATION, Defendant.
Bankruptcy No. 92-30725, Adv. No. 92-3068.
United States Bankruptcy Court, N.D. Ohio, W.D.
June 2, 1992.
*173 James M. Perlman, Toledo, Ohio, for plaintiffs.
Jane L. Lackey, Toledo, Ohio, for defendant.
OPINION AND ORDER GRANTING PERMANENT INJUNCTION AND TURNOVER
WALTER J. KRASNIEWSKI, Bankruptcy Judge.
This matter came on for hearing upon plaintiff's request for permanent injunction *174 to prohibit defendant from selling the automobile previously repossessed. Upon consideration of the evidence adduced at the hearing and the parties' post-hearing briefs, the court finds that said request is well taken, that defendant should be enjoined from selling the automobile in its possession and that defendant should turnover to plaintiffs the automobile previously repossessed in accordance with this opinion and order.
FACTS
On February 28, 1992, Debtors/plaintiffs filed their voluntary petition under chapter 13 of title 11. Thereafter, on March 3, 1992, plaintiffs filed a verified complaint, seeking turnover of an automobile currently in defendant's possession and motion for temporary restraining order, prohibiting defendant from selling said automobile. Defendant previously financed the purchase of that automobile. On January 27, 1992, defendant repossessed the automobile, obtaining a "repo title." Defendant sent notice of plaintiff's default under the contract to plaintiff on January 31, 1992. Sale of that automobile was scheduled for March 4, 1992, but has been stayed.
A hearing upon plaintiffs' motion for temporary restraining order was held on March 3, 1992. At that hearing, the court granted plaintiffs' motion, enjoining defendant from selling that car until the hearing on the preliminary injunction, but permitted the car to remain in defendant's possession.
A hearing upon the preliminary injunction was held on March 16, 1992. Plaintiff Willie Joe Jackson testified that the car currently in defendant's possession was the family car. Plaintiffs state that this vehicle is needed for Mr. Jackson to commute to work and to accommodate plaintiffs' family. The loss of the vehicle imposes a hardship upon plaintiffs.
Mr. Jackson explained the car was impounded late one evening while he was driving the automobile in issue with some friends. One of the passengers saw another friend, whom Mr. Jackson did not know, walking down the street and asked Mr. Jackson if he would stop and give him a ride. Mr. Jackson agreed. A few blocks later, the police stopped the car and, after searching it and its occupants, impounded the car as a result of drug charges. Mr. Jackson was not charged with a drug offense. Mr. Jackson was, subsequently, informed that the vehicle had been turned over to defendant. He further stated that he was informed by a representative from defendant corporation, that although defendant did not usually repossess a car of an individual with plaintiffs' payment history, the drug offense posed a different situation.
Mr. Jackson testified that he has been using his pickup to commute to work, although that vehicle is not in good condition. Furthermore, the pickup cannot accommodate his family as there is insufficient room for a car seat. However, he has not missed work since the car was taken; he has traveled to work with others when the truck is not operable.
The parties were granted leave to file post-hearing briefs. Defendant states that the automobile was turned over to it from the Lima city police, on or about January 27, 1992, after being impounded, on November 28, 1991, as a result of two occupants' possession of cocaine. Defendant maintains that because the vehicle was retitled in defendant's name, on February 13, 1992, plaintiffs are without legal interest to that vehicle as of the date of their petition. Furthermore, plaintiffs have failed to cure the default under the agreement between the parties, pursuant to O.R.C. § 1317.12. As a result, plaintiffs may not, at this juncture, redeem that collateral. Finally, defendant states that pursuant to O.R.C. §§ 2933.42 and 2933.43, its security interest may be forfeited if the vehicle is subsequently used in an offense involving contraband.
Plaintiffs rebut defendant's assertions stating that plaintiffs would not be "picking up strangers again." Additionally, plaintiffs maintain that the vehicle "is absolutely crucial and necessary" for work and family purposes. Lastly, plaintiffs assert *175 that insurance will be obtained upon turnover of that vehicle.
DISCUSSION
Initially, the court notes that "`Congress has generally left the determination of property rights in the assets of a bankrupt's estate to state law.'" In re Billerman, 88 B.R. 133, 136 (Bkrtcy.N.D.Ohio 1988) (citing Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979)). Pursuant to O.R.C. § 1309.49, plaintiffs, at any time prior to disposition by a secured creditor in its collateral, may
redeem the collateral by tendering fulfillment of all obligations secured by the collateral as well as the expenses reasonably incurred by the secured party in retaking, holding, and preparing the collateral for disposition, in arranging for the sale.
Defendant has not yet disposed of the property. Therefore, the court finds that the "Debtor's equity of redemption continued to exist at the time they filed their chapter 13 petition." Billerman, 88 B.R. at 136. See also In re Bialac, 712 F.2d 426 (9th Cir.1983) (we hold that a pre-foreclosure right to redeem is a property right under § 541 whether it stems from ownership of entire underlying property or only a fractional share); In re Foam Systems Co., 92 B.R. 406 (9th Cir. BAP 1988) (the existence and nature of Debtor's interest in property are determined by reference to state law); In re Cooley, 87 B.R. 432, 17 B.C.D. 903 (Bkrtcy.S.D.Texas 1988) (whether a Debtor possesses an interest in property is governed by state law); Matter of Mullarkey, 81 B.R. 280 (Bkrtcy.D.N.J.1987) (upon commencement of the case, a Debtor retains the property rights that existed under state law at the time of filing).
Furthermore,
although Ohio Rev.Code § 4505.10 lists the repossession of a motor vehicle as an illustration of an event that may result in a transfer of ownership by operation of law, a reading of the statute does not require the conclusion that the mere act of repossession is sufficient to cause a change of ownership.
* * * * * *
This court finds that as of the date [Debtors'] petition in bankruptcy was filed, [they] possessed the right to cure or redeem the automobile and "ownership" of the automobile had not passed. . . .
In re Sutton, 87 B.R. 46, 48-49 (Bkrtcy. S.D.Ohio 1988).
As a result of plaintiffs' interest in the automobile, defendant, at this juncture, should be enjoined from selling same. Furthermore, because plaintiffs have an interest in the vehicle, and that interest constitutes property of the estate, turnover of this property may be ordered pursuant to § 542. In re Contractors Equipment Supply Co., 861 F.2d 241 (9th Cir.1988). See also United States v. Whiting Pools, Inc., 462 U.S. 198, 103 S.Ct. 2309, 76 L.Ed.2d 515 (1983) (property of the estate encompasses property of the Debtor that was seized by a creditor before the petition was filed); In re Caldwell, 81 B.R. 164, 18 C.B.C.2d 23 (Bkrtcy.M.D.Ga.1988) (several provisions of § 541 bring into the estate property in which Debtor did not have a possessory interest at the time the bankruptcy proceedings commenced). Although the instant hearing was held upon plaintiffs' motion for temporary restraining order, defendant has answered plaintiffs' complaint and the parties presented testimony and oral argument in support of plaintiffs' request for turnover. The court will, then, adjudicate the merits of plaintiffs' complaint.
Defendant's counsel argued at the hearing that turnover should not be ordered as the vehicle was not insured and that plaintiff's insurance, in the past, has been cancelled. Plaintiff testified that he is in a position to obtain insurance if the car were turned over to him. Based upon this representation, the court is persuaded that defendant's argument is not well taken. As discussed, infra, the court finds that defendant should turnover the automobile; plaintiffs' failure to obtain and maintain insurance could support a motion *176 for relief from stay or other remedies available to defendant and the court is not convinced by this argument.
Defendant's counsel also argued that the vehicle is subject to O.R.C. § 1317.12 as the parties' contract represents a retail installment contract. Thus, defendant asserts, plaintiffs had 20 days from repossession or 15 days from the notice in which to redeem the vehicle; because plaintiffs failed to redeem, they have no interest in the vehicle.
The court does not concur in defendant's analysis. Initially, the court finds that the Retail Installment Sales Act, O.R.C. Chapter 1317 (RISA) does not apply to defendant; defendant is a financial institution. That is,
plaintiffs agree that the central issue is whether, in obtaining their loans, they were customers of the car dealers, or of the bank. If the plaintiffs were customers of the car dealers, the provision of RISA apply to the retail installment contracts. On the other hand, if the plaintiffs were customers of the bank, RISA does not apply because the bank is a "financial institution" as defined by R.C. 5725.01.
Mullen v. Fifth Third Bank, 43 Ohio App.3d 69, 70, 539 N.E.2d 683 (1988). Because defendant is engaged in the business of lending money, RISA is inapplicable and the redemption time referenced by defendant's counsel is not controlling. See O.R.C. § 5725.01(A).
The court is also persuaded that RISA does not govern the instant situation as defendant's notice to Mr. Jackson provides in pertinent part:
You can get your vehicle back any time until it is sold. . . .
* * * * * *
The longer you wait, the more you may have to pay to get your vehicle back. . . .
Defendant's Memorandum, Letter of January 31, 1992 from Defendant to Mr. Jackson (April 24, 1992). Based upon these statements, it appears that plaintiffs had the opportunity to redeem the vehicle until sale. Furthermore, Mr. Jackson testified that he understood that he had the right to obtain the car until sale. The court finds, based upon the statute, defendant's own exhibits and Mr. Jackson's understanding, that plaintiffs had the opportunity to redeem in accordance with O.R.C. § 1309.49, previously cited. See supra pp. 174-75. Thus, the court is unpersuaded by this argument.
Lastly, defendant contends that if the vehicle is turned over to plaintiffs and if it is involved in an offense, the vehicle is subject to seizure and forfeiture of defendant's security interest pursuant to O.R.C. § 2933.43. However, based upon the record, this assertion does not support defendant's continued retention of the automobile. As found, plaintiffs have an interest, an opportunity to redeem, in the vehicle repossessed by defendant. This interest is includable in plaintiffs' estate pursuant to 11 U.S.C. § 541. Notwithstanding defendant's concern that the vehicle may be subsequently seized and forfeited, it appears that the procedure set forth in O.R.C. § 2933.43 prohibits forfeiture of defendant's security interest by providing:
[n]o bona fide security interest shall be forfeited pursuant to this division if the holder of the interest establishes, by a preponderance of the evidence, that he neither knew, nor should have known after a reasonable inquiry, that the property was used, or likely to be used, in a crime or administrative violation, that he did not consent, expressly or impliedly, to the use of the property in a crime or administrative violation, and that the security interest was perfected pursuant to law prior to the seizure.
Thus, it appears that defendant's security interest is protected by the statute. The court is unpersuaded by this argument.
Defendant must, then, upon plaintiffs' payment of the reasonable expenses incurred in retaking this property, turnover the vehicle as it constitutes property of the estate. Turnover is, however, subject to plaintiffs' providing proof of, and maintaining, insurance; failure to maintain insurance, upon the filing of an appropriate *177 pleading, may result in a surrender of the automobile to defendant. In light of the foregoing, it is therefore
ORDERED that plaintiff's request for permanent injunction be, and hereby is, granted. It is further
ORDERED that defendant turnover the vehicle to plaintiffs subject to plaintiffs' payment to defendant of the expenses reasonably incurred by it in retaking and holding the vehicle and providing proof of insurance. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537763/ | 918 A.2d 1086 (2006)
Christopher BRYAN, Creditor Trustee for Ingersoll International, Inc., Appellant,
v.
John DOAR and Dieter Feisel, Defendants Below, Appellees.
No. 469, 2006.
Supreme Court of Delaware.
Submitted: October 27, 2006.
Decided: November 6, 2006.
Reargument Denied November 22, 2006.
David E. Wilks (argued) and Thad J. Bracegirdle, Reed Smith, Wilmington, DE, for appellant.
Donald J. Wolfe, Jr., Michael A. Pittenger (argued), and Berton W. Ashman, Jr., Potter Anderson & Corroon, Wilmington, DE, for appellees.
Before STEELE, Chief Justice, HOLLAND and RIDGELY, Justices.
HOLLAND, Justice.
This Court directed the sole appellant, Christopher Bryan, Creditor Trustee (the "Trustee") for Ingersoll International, Inc. ("Ingersoll"), to show cause why this appeal should not be dismissed by reason of the fact the Trustee was never a party to the underlying action in the Court of Chancery. The Trustee argues that he has standing to appeal because he has an interest in the outcome of the litigation. The Trustee acknowledges, however, that Delaware follows the general rule that "[a] mere interest in the outcome of litigation will not suffice to confer standing upon a nonparty."[1] The Trustee also argues that he has standing to appeal because he "appeared in the action below and asserted his rights in opposition to the defendants' motion to dismiss." It is well-established, however, that "mere participation in the proceedings below will not suffice to confer standing upon a nonparty."[2]
*1087 Under Delaware law, "a nonparty has no standing to take a direct appeal or an interlocutory appeal to [the Delaware Supreme Court]."[3] The United States Supreme Court has described as "well settled" the rule that only parties to a civil action are permitted to appeal from a final judgment.[4] It is not contested that the Trustee was not named as a party in the Court of Chancery, nor that the Trustee did not seek substitution, joinder or intervention. Accordingly, we hold that the Trustee has no right to appeal from the final judgment that was entered by the Court of Chancery.
Procedural History
On December 12, 2000, Lori Ingersoll Gaylord, Lisa March Gaylord and Kimberly Ingersoll Gaylord (the "Original Plaintiffs" or the "Gaylords") filed a complaint with the Court of Chancery against members of the board of directors of Ingersoll International, Inc. ("Ingersoll" or the "Company"). The original complaint sought injunctive and monetary relief for the individual defendants' alleged breaches of fiduciary duty in connection with a sale of the Company's assets and the defendants' failure to secure a valid vote of Ingersoll's shareholders in favor of that transaction.
The action in the Court of Chancery proceeded sporadically for the next two and one-half years, in part because the attorney for the Original Plaintiffs changed several times. On April 22, 2003, shortly after the Original Plaintiffs retained their third attorney, Ingersoll filed a petition for bankruptcy in the United States Bankruptcy Court for the Northern District of Illinois ("Bankruptcy Court"). The action in the Court of Chancery was automatically stayed pursuant to the United States Bankruptcy Code.
On October 4, 2005, the second Amended Joint Plan of Liquidation of Ingersoll International, Inc. and Certain of Its Subsidiaries (the "Joint Plan") became operational. Among other things, the Joint Plan gave effect to a settlement agreement which transferred the initial right and obligation to prosecute this action and others from the Original Plaintiffs to the Creditor Trustee of Ingersoll and its Affiliated Debtors (the "Creditor Trustee"). The Joint Plan provided for certain assets of Ingersoll, including the claims in this litigation, to be transferred to the Creditor Trust of Ingersoll, Inc. and its Affiliated Debtors (the "Creditor Trust").
Bankruptcy Stay Lifted
The stay of this litigation was lifted after the Joint Plan became effective. As a result, "the creditor trustee was empowered to prosecute the lawsuit." If, for any reason and at any time, the Creditor Trust chose not to prosecute this litigation, however, the Joint Plan provided that the Gaylords had a right to take over its prosecution.
After the Joint Plan was confirmed by the Bankruptcy Court on September 8, 2005, the defendants' September 15, 2005 status letter advised the Court of Chancery that "[they had] not yet been informed whether the creditors trust' or the Robert Gaylord family [would] elect to prosecute this action." In a January 20, 2006 status letter, the defendants informed the Court of Chancery that:
*1088 the bankruptcy counsel who represented the Gaylord family (the Plaintiffs in this action) in connection with the Illinois bankruptcy proceedings has been retained to represent the trust established pursuant to the Plan of Liquidation. Although the stay of this litigation apparently was lifted in early October, we have not yet been advised whether the trust or the Gaylord family intends to continue to prosecute this litigation.
Neither the Gaylords nor the Creditor Trust contacted the Court of Chancery.
Trustee Abjures Substitution
On May 11, 2006, the defendants filed a Motion to Dismiss for Failure to Prosecute. On May 16, 2006, an attorney entered his appearance on behalf of the Original Plaintiffs. Although the same attorney also represented the Trustee, no action was taken to add or substitute the Creditor Trust as a party in the Court of Chancery.
In correspondence dated May 17, 2006, counsel for defendants advised the attorney who had entered his appearance on behalf of "plaintiffs," that substitution of the Trustee for Ingersoll appeared to be appropriate. The defendants agreed not to oppose a motion for substitution, so long as it was in acceptable form and comported with the terms of the Joint Plan. In correspondence dated May 27, 2006, the attorney who had entered his appearance for the Original Plaintiffs, and who also represented the Trustee, indicated he needed further time to discuss and evaluate the issues raised by a substitution.
The record reflects that the Trustee never sought to be substituted or joined as a party. When the procedural posture resulting from the Trustee's failure to seek to be substituted or joined as a party was raised in the Court of Chancery, the attorney who represented both the Original Plaintiffs and the Trustee responded that a decision had been made to proceed under Chancery Court Rule 25(c) which provides that "in case of any transfer of interest, the action may be continued by or against the original party, unless the Court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party."[5] Accordingly, this action continued to be prosecuted in the Court of Chancery by the Original Plaintiffs (the Gaylords), notwithstanding the prosecution authority of the Trustee that was conferred by Ingersoll's Joint Plan.
Dismissal Motion Granted
In opposing the motion to dismiss, the attorney for the Original Plaintiffs argued that the Trustee had only had seven months to evaluate the case. Therefore, the attorney argued that any prior delays by the Original Plaintiffs should not defeat the Trustee's interest in having a trial on the merits. The efforts by the Trustee in the Court of Chancery to separate himself from the prior inaction and delays by the Original Plaintiffs was in obvious conflict with the tactical decision of the Trustee not to become a party and to have his attorney, who had only entered his appearance on behalf of the Original Plaintiffs, continue prosecution of the action "by . . . the original party" under Rule 25(c).
The Court of Chancery concluded that the failure of either the Original Plaintiffs or the Trustee to prosecute the action (or even to contact the court or opposing counsel) for seven months after confirmation of the Joint Plan was unreasonable and prejudicial in view of the Original Plaintiffs' prior history of causing delays. The Court of Chancery noted that the Original Plaintiffs and the Trustee were acting in concert *1089 with the same attorney and that "the Gaylords aren't out of this." The Court of Chancery granted the defendants' Motion to Dismiss for Failure to Prosecute.
Nonparty Trustee Appeals
In an apparent effort to disassociate himself from the Original Plaintiffs, the Trustee made the strategic decision to pursue this appeal in his own name and on his own behalf. On the day after the Trustee's appeal was filed, counsel for the defendants/appellees pointed out in their response to the Motion to Expedite that the Trustee had appealed in his own name but had not been a party in the Court of Chancery. Accordingly, the Trustee then had the opportunity to dismiss his appeal voluntarily and to cause his counsel, who also serves as counsel for the Original Plaintiffs, to commence a timely appeal by the Gaylords. The Trustee chose not to do so.
Nonparty Lacks Appellate Standing
The Trustee acknowledges that, in Delaware, a nonparty generally has no standing to take an appeal. The Trustee argues, however, that this Court should follow certain federal precedents that permit an appeal by a nonparty who has "an interest that is affected by the trial court's judgment."[6] While the federal courts have recognized exceptions to the general rule that a nonparty has no standing to appeal "[b]y and large, the [United States] Supreme Court has been inhospitable to these endeavors."[7] For example, the Second Circuit "suggested in dictum that there were several exceptions to the rule that only parties may appeal from an adverse judgment."[8] Although the United States Supreme Court affirmed the decision, it added the following cautionary language:
The Court of Appeals suggested that there may be exceptions to this general rule, primarily "when the nonparty has an interest that is affected by the trial court's judgment." We think the better practice is for such a nonparty to seek intervention for purposes of appeal[.][9]
In this case, the Trustee could have filed a motion for intervention or substitution. Since the Trustee could have been substituted for the Original Plaintiffs (the Gaylords) under Rule 25(c), even the federal exceptions to the general rule that prohibits a nonparty from appealing are inapplicable. The First Circuit's opinion in Microsystems Software is didactic:
We believe that this message is reasonably clear. While there is an exception to the "only a party may appeal" rule that allows a nonparty to appeal the denial of a motion to intervene, the situation differs when intervention is readily available. In that event, courts are powerless to extend a right of appeal to a nonparty who abjures intervention.
* * * * * *
[The appellants] made a strategic choice not to intervene in the proceedings. By intervening . . . the appellants could have become parties, entitled to both that status's benefit (including the right to appeal an unfavorable judgment) and its burdens.
In our view, the decision to forgo intervention works a forfeiture of any claim to appellate standing.[10]
*1090 The First Circuit's rationale is equally applicable to a nonparty who abjures substitution.
Nonparty Trustee Appeal Dismissed
The procedural history of this case demonstrates that the Trustee had the opportunity to move for substitution or intervention as a party in the Court of Chancery. In fact, the Trustee was encouraged to do so by the defendants. Nevertheless, the attorney for the Original Plaintiffs, who is also the Trustee's counsel, argued forcefully that the Trustee did not have to become a party to the action.
The Trustee and his attorney made the strategic decision not to move for substitution and, instead, to continue prosecution of the action in the Court of Chancery solely on behalf of the Original Plaintiffs, the Gaylords. That strategic choice results in a forfeiture of any claim that Trustee has to appellate standing.[11] As the First Circuit explained in Microsystems, "[t]hose who aspire to litigate issues cannot have it both ways. . . ."[12] The Trustee cannot decline to achieve party status in the Court of Chancery "and still expect to be treated as [a] part[y] for the purpose of testing the validity of an ensuing decree."[13]
Conclusion
This appeal must be dismissed for lack of standing on the part of the Trustee to pursue an appeal from a final judgment of the Court of Chancery in an action as to which the Trustee made a strategic decision not to become a party by either substitution or intervention.
NOTES
[1] Microsystems Software, Inc. v. Scandinavia Online AB, 226 F.3d 35, 42 (1st Cir.2000).
[2] Id.
[3] Townsend v. Griffith, 570 A.2d 1157, 1158 (Del.1990).
[4] See Marino v. Ortiz, 484 U.S. 301, 304, 108 S.Ct. 586, 98 L.Ed.2d 629 (1988) (per curiam) (citation omitted); see also United States v. LTV Corp., 241 U.S.App.D.C. 58, 746 F.2d 51, 53 (D.C.Cir.1984) ("It has long been settled that one who is not a party to a record and judgment is not entitled to appeal therefrom.") (internal quotations omitted).
[5] Del. Ch. Ct. R. 25(c).
[6] Hispanic Soc'y of the N.Y. City Police Dep't v. N.Y. City Police Dep't, 806 F.2d 1147, 1152 (2d Cir.1986).
[7] Microsystems Software, Inc. v. Scandinavia Online AB, 226 F.3d 35, 40 (1st Cir.2000).
[8] Id. (discussing Hispanic Soc'y of the N.Y. City Police Dep't v. N.Y. City Police Dep't, 806 F.2d 1147, 1152 (2d Cir.1986)).
[9] Marino v. Ortiz, 484 U.S. 301, 304, 108 S.Ct. 586, 98 L.Ed.2d 629 (1988) (citation omitted).
[10] Microsystems Software, Inc. v. Scandinavia Online AB, 226 F.3d at 40, 42.
[11] See Microsystems, Inc. v. Scandinavia Online AB, 226 F.3d at 41 (holding that "a strategic choice not to intervene" in lower court proceedings "works a forfeiture of any claim to appellate standing.").
[12] Id.
[13] Id. (footnote omitted). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537773/ | 918 A.2d 341 (2007)
Walter E. RYAN, Jr., In the right of and for the benefit of Maxim Integrated Products, Inc., Plaintiff,
v.
John F. GIFFORD, James R. Bergman, B. Kipling Hagopian, A.R. Frank Wazzan, Eric P. Karros, M.D. Sampels, Defendants, and
Maxim Integrated Products, Inc., Nominal Defendant.
Civil Action No. 2213-N.
Court of Chancery of Delaware, New Castle County.
Submitted: January 29, 2007.
Decided: February 6, 2007.
*345 Norman M. Monhait, of Rosenthal Monhait & Goddess, P.A., Wilmington, Delaware; of Counsel: Krislov & Associates, Ltd., Chicago, Illinois, Attorneys for Plaintiff.
Peter J. Walsh Jr. and Timothy R. Dudderar, of Potter Anderson & Corroon LLP, Wilmington, Delaware; of Counsel: John M. Potter, of Quinn Emanuel Urquhart Oliver & Hedges LLP, San Francisco, California, Attorneys for Individual Defendants James R. Bergman, B. Kipling Hagopian, A.R. Frank Wazzan, Eric P. Karros, and M.D. Sampels.
Jeffrey L. Moyer and Kelly E. Farnan, of Richards Layton & Finger, P.A., Wilmington, Delaware, Attorneys for Individual Defendant John F. Gifford.
J. Jackson Shrum, of Harvey Pennington, Ltd., Wilmington, Delaware; of Counsel: Michael J. Ioannou, of Ropers Majeski Kohn & Bentley, San Jose, California, Attorney for Nominal Defendant.
OPINION
CHANDLER, Chancellor.
On March 18, 2006, The Wall Street Journal sparked controversy throughout the investment community by publishing a one-page article, based on an academic's statistical analysis of option grants, which revealed an arguably questionable compensation practice. Commonly known as backdating, this practice involves a company issuing stock options to an executive on one date while providing fraudulent documentation asserting that the options were actually issued earlier. These options may provide a windfall for executives because the falsely dated stock option grants often coincide with market lows. Such timing reduces the strike prices and inflates the value of stock options, thereby increasing management compensation. This practice allegedly violates any stock option plan that requires strike prices to be no less than the fair market value on the date on which the option is granted by the board. Further, this practice runs afoul of many state and federal common and statutory laws that prohibit dissemination of false and misleading information.
After the article appeared in the Journal, Merrill Lynch issued a report demonstrating that officers of numerous companies, including Maxim Integrated *346 Products, Inc., had benefited from so many fortuitously timed stock option grants that backdating seemed the only logical explanation. The report engendered this action.
Plaintiff Walter E. Ryan alleges that defendants breached their duties of due care and loyalty by approving or accepting backdated options that violated the clear letter of the shareholder-approved Stock Option Plan and Stock Incentive Plan ("option plans"). Individual defendants move to stay this action in favor of earlier filed federal actions in California ("federal actions"). In the alternative, they move to dismiss this action on its merits.
In this Opinion, I grant individual defendants' motion to dismiss all claims arising before April 11, 2001. I deny the remainder of the individual defendants' motion to stay or dismiss.
I. FACTS
Maxim Integrated Products, Inc. is a technology leader in design, development, and manufacture of linear and mixed-signal integrated circuits used in microprocessor-based electronic equipment. From 1998 to mid-2002 Maxim's board of directors and compensation committee granted stock options for the purchase of millions of shares of Maxim's common stock to John F. Gifford, founder, chairman of the board, and chief executive officer, pursuant to shareholder-approved stock option plans filed with the Securities and Exchange Commission. Under the terms of these plans, Maxim contracted and represented that the exercise price of all stock options granted would be no less than the fair market value of the company's common stock, measured by the publicly traded closing price for Maxim stock on the date of the grant. Additionally, the plan identified the board or a committee designated by the board as administrators of its terms.
Ryan is a shareholder of Maxim and has continuously held shares since his Dallas Semiconductor Incorporated shares were converted to Maxim shares upon Maxim's acquisition of Dallas Semiconductor on April 11, 2001. He filed this derivative action on June 2, 2006, against Gifford; James Bergman, B. Kipling Hagopian, and A.R. Frank Wazzan, members of the board and compensation committee at all relevant times; Eric Karros, member of the board from 2000 to 2002, and M.D. Sampels, member of the board from 2001-2002. Ryan alleges that nine specific grants were backdated between 1998 and 2002, as these grants seem too fortuitously timed to be explained as simple coincidence. All nine grants were dated on unusually low (if not the lowest) trading days of the years in question, or on days immediately before sharp increases in the market price of the company.
A. Genesis of these Claims
As practices surrounding the timing of options grants for public companies began facing increased scrutiny in early 2006, Merrill Lynch conducted an analysis of the timing of stock option grants from 1997 to 2002 for the semiconductor and semiconductor equipment companies that comprise the Philadelphia Semiconductor Index. Merrill Lynch measured the aggressiveness of timing of option grants by examining the extent to which stock price performance subsequent to options pricing events diverges from stock price performance over a longer period of time. "Specifically, it looked at annualized stock price returns for the twenty day period subsequent to options pricing in comparison to stock price returns for the calendar year in *347 which the options were granted."[1] In theory, companies should not generate systematic excess return in comparison to other investors as a result of the timing of options pricing events. "[I]f the timing of options grants is an arm's length process, and companies have [not] systematically taken advantage of their ability to backdate options within the [twenty] day windows that the law provided prior to the implementation of Sarbanes Oxley in 2002, there shouldn't be any difference between the two measures."[2] Merrill Lynch failed to take a position on whether Maxim actually backdated; however, it noted that if backdating did not occur, management of Maxim was remarkably effective at timing options pricing events.
With regard to Maxim, Merrill Lynch found that the twenty-day return on option grants to management averaged 14% over the five-year period, an annualized return of 243%, or almost ten times higher than the 29% annualized market returns in the same period.
B. Similar Pending Actions
The Merrill Lynch report formed the bases for other derivative lawsuits. Robert McKinney filed a federal action in the Northern District of California on May 22, 2006, three weeks before this action was filed. Eugene Horkay, Jr. followed suit, filing an identical action in the same court two days later. The Northern District of California entered an order on June 14, 2006, consolidating these suits and all subsequently filed suits. Under this order, two more actions were consolidated. All four derivative plaintiffs have stipulated to consolidate and agreed to a lead plaintiff and lead counsel structure. Further, defendants and plaintiffs have entered into a stipulated scheduling order approved by that court.[3]
The federal action is similar to the Delaware action. The federal plaintiffs posit claims of backdating based on the Merrill Lynch report. They specifically challenge ten option grants, alleging that backdating occurred. Further, they contend that this violation of their options plan exposes Maxim to adverse tax consequences.
The federal action differs in some respects, however. First, that action alleges that other officers, in addition to Gifford, benefited from backdated options. Further, the federal action names more director defendants. In addition to breach of fiduciary duty claims, the federal plaintiffs assert claims for aiding and abetting breach of fiduciary duty, abuse of control, gross mismanagement, constructive fraud and corporate waste. The federal plaintiffs also allege violations of sections 10(b) and 14(a) of the Securities Exchange Act of 1934 and of Rules 10b-5 and 14a-9.
In addition to the Delaware action and the federal action, Louisiana Sheriff's Pension & Relief Fund filed a derivative action in California state court that makes similar allegations as the federal derivative action and this action. The California state court action, filed on June 16, 2006, names sixteen defendants, including all defendants in the Delaware action. The judge in the state court action granted a stay in that proceeding.
II. CONTENTIONS
Plaintiff contends that all defendants breached their fiduciary duties to Maxim and its shareholders. The shareholder-approved 1983 Stock Option Plan and 1999 *348 Stock Incentive Plan bound the board of directors to set the exercise price according to the terms of the plans. The 1999 plan allowed the board to designate a committee to approve the plans. The designated compensation committee, consisting of Bergman, Hagopian, and Wazzan, approved option grants after 1999. Plaintiff alleges that from 1998 to 2002, the board actively allowed Maxim to backdate at least nine option grants issued to Gifford, in violation of shareholder-approved plans, and to purposefully mislead shareholders regarding its actions. As a result of the active violations of the plan and the active deceit, plaintiff contends that Maxim received lower payments upon exercise of the options than would have been received had they not been backdated. Further, Maxim suffers adverse effects from tax and accounting rules. The options priced below the stock's fair market value on the date of the grant allegedly bring the recipient an instant paper gain. At the time, such compensation had to be treated as a cost to the company, thereby reducing reported earnings and resulting in overstated profits. This likely necessitates revision of the company's financial statements and tax reporting. Moreover, Gifford, the recipient of the backdated options, is allegedly unjustly enriched due to receipt of compensation in clear violation of the shareholder-approved plans.
Defendants respond with a motion asserting three theories under which this Court should stay this action in favor of the federal action or, in the alternative, numerous theories under which this Court should dismiss this action. First, defendants move to stay this action pursuant to the Supreme Court of Delaware's ruling in Mc Wane Cast Iron Pipe Corp. v. McDowell-Wellman Engineering Co.[4] They assert that because this is a second-filed action, I should grant a stay under principles of comity. In the alternative, defendants contend that the doctrine of forum non conveniens supports a stay because the California action provides a more convenient forum. Finally, defendants insist that this case should be stayed because the result in California may render the Delaware action moot.
Defendants also seek dismissal under numerous theories. First, defendants allege that plaintiff fails to meet his burden of pleading demand futility with particularity because plaintiff does not show that the companies' directors were incapable of making an impartial decision regarding litigation. Second, defendants state that plaintiff lacks standing to assert seven of his nine claims because he was not a shareholder when those challenged transactions occurred. Third, defendants assert that plaintiff fails to state a claim for breach of fiduciary duty because plaintiff fails to rebut the business judgment rule. Fourth, defendants contend that the statute of limitations bars plaintiff's claims and that plaintiff cannot save his claims by relying on any tolling doctrines because all relevant information was public. Finally, defendants assert that plaintiff's unjust enrichment claim fails because plaintiff does not allege the manner in which Gifford was unjustly enriched. Ryan never suggests that Gifford has exercised any of the allegedly backdated options or sold any stock. Thus, defendants argue, there is no enrichment.
I will address these assertions in turn.
III. MOTION TO STAY
A. McWane Doctrine
Defendants move to stay this action pursuant to the McWane doctrine, arguing *349 that the "McWane doctrine is most useful in derivative actions because such actions present the greatest probability for identical claims to be presented to multiple courts at the same time."[5] Thus, this Court should use its broad discretion under the first-filed rule to grant a stay.
The Supreme Court of Delaware strongly encourages this Court to freely exercise its discretion "in favor of the stay when there is a prior action pending elsewhere, in a court capable of doing prompt and complete justice, involving the same parties and the same issues."[6] Further, it recognizes that "considerations of comity and the necessities of an orderly and efficient administration of justice"[7] often require that "litigation should be confined to the forum in which it first commenced, and a defendant should not be permitted to defeat the plaintiff's choice of forum in pending suit."[8] The application of this doctrine, however, presents great difficulty in shareholder derivative actions.
A shareholder plaintiff does not sue for his direct benefit. Instead, he alleges injury to and seeks redress on behalf of the corporation. Further, the board or any shareholder with standing may represent the injured party. Thus, this Court places less emphasis on the celerity of such plaintiffs and grants less deference to the speedy plaintiff's choice of forum. Because the plaintiff is not the directly injured party, this Court proceeds cautiously when faced with the question of whether to defer to a first-filed derivative suit, "examin[ing] more closely the relevant factors bearing on where the case should best proceed, using something akin to a forum non conveniens analysis."[9]
For example, in Biondi v. Scrushy, Vice Chancellor Strine declined to stay a later-filed Delaware action where he determined that the first-filed Alabama complaint was substandard compared to the Delaware action.[10] Conversely, in Derdiger v. Tallman, I granted a stay in favor of a non-Delaware action where that complaint was more fulsomely pleaded than the Delaware complaint.[11] Thus, this Court has recognized that the adequacy of the complaint is a more important factor than time of filing in a Mc Wane analysis of shareholder derivative actions, so much so that this Court will, in certain instances, grant or deny a stay based on this factor alone.
A similarly important factor in determining whether a stay is appropriate in a derivative action is a court's ability to render justice. Rendering justice necessarily entails accurately applying controlling law, in this case Delaware law. In many instances, this Court has recognized without hesitation that sister state courts and federal courts are capable of applying Delaware law and providing complete justice to parties.[12] At the same time, however, Delaware courts have a "significant and substantial interest in overseeing the conduct of those owing fiduciary duties to shareholders of Delaware corporations."[13]*350 This interest increases greatly in actions addressing novel issues. In In re Chambers Development Co., this Court noted, as it has in the past, that "novel and substantial issues of Delaware corporate law are best resolved in Delaware courts."[14] Thus, while the application of Delaware law in most cases is not determinative, more weight must be accorded to this factor where the law is novel. Such is the case here.
The allegations in this case involve backdating option grants and whether such practice violates one or more of Delaware's common law fiduciary duties. This question is one of great import to the law of corporations. It encompasses numerous issues, including the propriety of this type of executive compensation, requisite disclosures that must accompany such compensation, and the legal implications of intentional non-compliance with shareholder-approved plans (if such practices are deemed noncompliant), to name only a few. Investors are challenging this very practice in many courts throughout the United States, including this Court.[15] Delaware courts have not as yet addressed these fundamental issues. Nevertheless, Delaware law directly controls and affects many of the option backdating cases. An answer regarding the legality of these practices pursuant to Delaware law plainly will affect not only the parties to this action, but also parties in other civil and criminal proceedings where Delaware law controls or applies. By directly stating the fiduciary principles applicable in this context, Delaware courts may remove doubt regarding Delaware law and avoid inconsistencies that might arise in the event other state or federal courts, in applying Delaware law, reach differing conclusions. Because Delaware has an overwhelming interest in resolving questions of first impression under Delaware law, I deny defendants' McWane-based stay request.[16]
B. Forum Non Conveniens
Defendants also seek a stay pursuant to the doctrine of forum non conveniens. Specifically, they contend that the pendency of the first-filed federal derivative action warrants a stay because "`it makes little sense to duplicate the efforts of the federal court.'"[17] Defendants assert that: there is no reason to burden the defendants or waste the resources of the court with dual litigation of the same matters; the federal forum offers greater ease of access to proof because potential witnesses *351 and documents are located in California; the federal forum allows for compulsory process over a greater number of potential witnesses; and federal courts have proven their ability to appropriately apply Delaware law.
This Court examines six factors when assessing whether stay or dismissal is appropriate under a forum non conveniens analysis: "1) the applicability of Delaware law, 2) the relative ease of access of proof, 3) the availability of compulsory process for witnesses, 4) the pendency or non-pendency of a similar action or actions in another jurisdiction, 5) the possibility of a need to view the premises; and 6) all other practical considerations that would make the trial easy, expeditious, and inexpensive."[18] A showing of mere convenience, however, will not warrant stay or dismissal under forum non conveniens. Instead, a party seeking to stay or dismiss on the grounds of forum non conveniens must demonstrate that litigating in Delaware would subject it to overwhelming hardship.[19] The facts of this case show no such insurmountable burden.
First, Delaware law controls. Thus, the applicability of Delaware law clearly favors denial of the motion. Second, most corporate litigation in the Court of Chancery involves companies with documents and witnesses located outside of Delaware. Defendants point to no documents they will be unable to produce and no witnesses who will be subjected to overwhelming hardship by testifying in Delaware. While it is true that California might provide a more convenient location, motions to dismiss a plaintiff's choice of forum are not granted for defendants' mere convenience. Thus, there is no showing that the "ease of access of proof" standard supports a stay or dismissal. Third, "the availability of compulsory process of witnesses" while convenient in California, is not determinative. Defendants fail to identify necessary witnesses not subject to process; nor will this Court presume that such witnesses exist. Fourth, while a separate pending action exists, defendants provide no evidence that litigating both matters will cause the type of overwhelming hardship necessary under the forum non conveniens doctrine. Fifth, there is no indication that a view of any premises will be necessary. Nor do defendants assert any other considerations that would make trial in Delaware a real hardship, let alone a substantial and overwhelming hardship. Therefore, the doctrine of forum non conveniens does not require that I grant a stay in favor of the first-filed action.
C. California Actions Will Render Delaware Actions Moot
In a final effort to convince this Court to stay this action, defendants state that adjudication of the California actions will render the Delaware action moot. Defendants fail, however, to provide any explanation as to why they make this assertion. Without more, I cannot hold that this action should be stayed. Thus, I deny a motion to stay on the grounds that adjudication of the California actions will render the Delaware action moot.
IV. MOTION TO DISMISS
A. Futility of Demand Under Rule 23.1
Defendants state that plaintiff has failed to make demand or prove demand futility. *352 That is, defendants contend that the complaint lacks particularized facts that either establish that a majority of directors face a "substantial likelihood" of personal liability for the wrongdoing alleged in the complaint or render a majority of the board incapable of acting in an independent and disinterested fashion regarding demand.
When a shareholder seeks to maintain a derivative action on behalf of a corporation, Delaware law requires that shareholder to first make demand on that corporation's board of directors, giving the board the opportunity to examine the alleged grievance and related facts and to determine whether pursuing the action is in the best interest of the corporation. This demand requirement works "to curb a myriad of individual shareholders from bringing potentially frivolous lawsuits on behalf of the corporation, which may tie up the corporation's governors in constant litigation and diminish the board's authority to govern the affairs of the corporation."[20]
This Court has recognized, however, that in some cases demand would prove futile. Where the board's actions cause the shareholders' complaint, "a question is rightfully raised over whether the board will pursue these claims with 100% allegiance to the corporation, since doing so may require that the board sue itself on behalf of the corporation."[21] Thus, in an effort to balance the interest of preventing "strike suits motivated by the hope of creating settlement leverage through the prospect of expensive and time-consuming litigation discovery [with the interest of encouraging] suits reflecting a reasonable apprehension of actionable director malfeasance that the sitting board cannot be expected to objectively pursue on the corporation's behalf," Delaware law recognizes two instances where a plaintiff is excused from making demand.[22] Failure to make demand may be excused if a plaintiff can raise a reason to doubt that: (1) a majority of the board is disinterested or independent or (2) the challenged acts were the product of the board's valid exercise of business judgment.[23]
The analysis differs, however, where the challenged decision is not a decision of the board in place at the time the complaint is filed. In Rales v. Blasband, the Supreme Court of Delaware held that "[w]here there is no conscious decision by the corporate board of directors to act or refrain from acting, the business judgment rule has no application."[24] Stated differently, "the absence of board action . . . makes it impossible to perform the essential inquiry contemplated by Aronson."[25]*353 Accordingly, where the challenged transaction was not a decision of the board upon which plaintiff must seek demand, plaintiff must "create a reasonable doubt that, as of the time the complaint is filed, the board of directors could have properly exercised its independent and disinterested business judgment in responding to a demand."[26]
Here, the compensation committee, not the board, approved the challenged option grants. Plaintiff concedes that the option plans provided the board with express authority to delegate to a committee its power to grant options according to the plans. Additionally, 8 Del. C. § 141(c) provides that the board of directors may designate committees and "[a]ny such committee . . . shall have and may exercise all powers and authority of the board of directors in the management of the business and affairs of the corporation." Further, "a member of the board of directors . . . shall, in the performance of such member's duties, be fully protected in relying in good faith upon the records of the corporation and upon any such information, opinions, reports or statements presented . . . by committees of the board of directors."[27] At first glance, it appears that because this decision was not a board decision, plaintiff must comply with Rales, alleging facts that raise a reason to doubt that the board members could have properly exercised their independent and disinterested business judgment in responding to a demand. The unique facts here, however, present a different situation. Maxim's board consisted of six members at all relevant times. The compensation committee, at all relevant times, consisted solely of three members, Bergman, Wazzan, and Hagopian. Thus, one half of the current board members approved each challenged transaction. Where at least one half or more of the board in place at the time the complaint was filed approved the underlying challenged transactions, which approval may be imputed to the entire board for purposes of proving demand futility, the Aronson test applies.
The spirit of Rales, if not the letter, supports this conclusion. In Rales, the current board was not the same board that originally made the decision on which the action was based. Consequently, the Supreme Court of Delaware held that the usual test for determining a derivative plaintiff's compliance with the demand obligation did not apply. Because the current board did not make the underlying challenged decision, it became impossible to test whether the current directors acted in conformity with the business judgment rule in approving the challenged transaction.[28] That impossibility is not present here.[29]
*354 1. Demand is Futile Under the Second Prong of Aronson
Because the compensation committee attacked by plaintiff constitutes a majority of the board, the business judgment analysis under the second prong of Aronson may be readily applied. Plaintiffs may prove demand futility by raising a reason to doubt whether the challenged transactions were a valid exercise of business judgment.
Plaintiff alleges that the challenged transactions raise a reason to doubt whether the option grants were a valid exercise of business judgment. Specifically, plaintiff states that the terms of the stock option plans required that "[t]he exercise price of each option shall be not less than one hundred percent (100%) of the fair market value of the stock subject to the option on the date the option is granted."[30] The board had no discretion to contravene the terms of the stock option plans. Altering the actual date of the grant so as to affect the exercise price contravenes the plan. Thus, knowing and intentional violations of the stock option plans, according to the plaintiff, cannot be an exercise of business judgment. I conclude that the unusual facts alleged raise a reason to doubt that the challenged transactions resulted from a valid exercise of business judgment.
In Sanders v. Wang,[31] then-Vice Chancellor Steele addressed the demand futility issue in a similar factual context. There, shareholders filed a derivative suit alleging that directors granted stock in excess of the number authorized by the employee stock ownership plan.[32] Then-Vice Chancellor Steele held that "the plaintiffs have sufficiently alleged facts which, taken as true, show that the CA board violated an express KESOP provision limiting the number of shares they were authorized to award. . . . Thus, the facts raise doubt that the board's actions resulted from a valid exercise of business judgment."[33] A board's knowing and intentional decision to exceed the shareholders' grant of express (but limited) authority raises doubt regarding whether such decision is a valid exercise of business judgment and is sufficient to excuse a failure to make demand.
The situation here closely mirrors that in Sanders v. Wang. Plaintiff supports his claim that backdating occurred by pointing to nine option grants over a six-year period where each option was granted during a low point. That is, every challenged option grant occurred during the lowest market price of the month or year in which it was granted. In addition to pointing specifically to highly suspicious timing, plaintiff further supports his allegations with empirical evidence suggesting that backdating occurred. The Merrill Lynch analysis measured the extent to which stock price performance subsequent to options pricing events diverged from stock price performance over a longer period of time to measure the aggressiveness of the timing of option grants and found that Maxim's average annualized return of 243% on option grants to management was almost ten times higher than the 29% annualized market returns in the same period. This timing, by my judgment and by support of *355 empirical data, seems too fortuitous to be mere coincidence. The appearance of impropriety grows even more when one considers the fact that the board granted options, not at set or designated times, but by a sporadic method.[34]
Plaintiff supports his breach of fiduciary duty claim and his assertion that demand is futile by pointing to the board's decision to ignore limitations set out in the company's stock options plans. The plans do not grant the board discretion to alter the exercise price by falsifying the date on which options were granted. Thus, the alleged facts suggest that the director defendants violated an express provision of two option plans and exceeded the shareholders' grant of express authority.
Plaintiff here points to specific grants, specific language in option plans, specific public disclosures, and supporting empirical analysis to allege knowing and purposeful violations of shareholder plans and intentionally fraudulent public disclosures. Such facts, in my opinion, provide sufficient particularity in the pleading to survive a motion to dismiss for failure to make demand pursuant to Rule 23. 1.[35]
2. Demand is Futile Under Rales
Even if the decision by the compensation committee was not imputable to the entire board, thereby implicating Aronson, demand would remain futile under the Rales test. Where the board has not yet made a decision, demand is excused when the complaint contains particularized facts creating a reason to doubt that a majority of the directors would have been independent and disinterested when considering the demand. Directors who are sued have a disabling interest for pre-suit demand purposes when "the potential for liability is not a mere threat but instead may rise to a substantial likelihood."[36]
A director who approves the backdating of options faces at the very least a substantial likelihood of liability, if only because it is difficult to conceive of a context in which a director may simultaneously lie to his shareholders (regarding his violations of a shareholder-approved plan, no less) and yet satisfy his duty of loyalty. Backdating options qualifies as one of those "rare cases [in which] a transaction *356 may be so egregious on its face that board approval cannot meet the test of business judgment, and a substantial likelihood of director liability therefore exists."[37] Plaintiff alleges that three members of a board approved backdated options, and another board member accepted them. These are sufficient allegations to raise a reason to doubt the disinterestedness of the current board and to suggest that they are incapable of impartially considering demand.[38]
B. Failure To State a Claim Upon Which Relief Can Be Granted
Defendants assert that plaintiff fails to state a claim for breach of fiduciary duty. This defense, stripped to its essence, states that in order to survive a motion to dismiss on a fiduciary duty claim, the complaint must rebut the business judgment rule. That is, plaintiff must raise a reason to doubt that the directors were disinterested or independent. Where the complaint does not rebut the business judgment rule, plaintiff must allege waste. Plaintiff here, argue the defendants, fails to do either. Further, there is no evidence that the defendants acted intentionally, in bad faith, or for personal gain. Therefore, so the argument goes, plaintiff fails to plead facts sufficient to rebut the business judgment rule and cannot maintain an action for breach of fiduciary duties.
Plaintiff responds that the same facts that establish demand futility under the second prong of Aronson v. Lewis that is, the directors' purposeful failure to honor an unambiguous provision of a shareholder approved stock option plan also rebuts the business judgment rule for the purpose of a motion to dismiss for failure to state a claim upon which relief can be granted.
1. Rule 12(b)(6) v. Rule 23.1
This Court follows well-settled standards governing motions to dismiss for *357 failure to state a claim. At the motion to dismiss stage, all well-pleaded factual allegations made in the complaint are to be accepted as true.[39] Moreover, this Court must draw all reasonable inferences in favor of the non-moving party, and dismissal is inappropriate unless the "plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances susceptible of proof."[40] Conclusory allegations are not considered as expressly pleaded facts or factual inferences.[41] Such facts must be put forth in the complaint and not merely in subsequent briefs.[42] In the context of a motion to dismiss for failure to state a claim, however, the pleading standard does not reach so high a bar as Rule 23.1. Thus, where plaintiff alleges particularized facts sufficient to prove demand futility under the second prong of Aronson, that plaintiff a fortiori rebuts the business judgment rule for the purpose of surviving a motion to dismiss pursuant to Rule 12(b)(6).
2. The Business Judgment Rule and Bad Faith
Even if this were not the case, the complaint here alleges bad faith and, therefore, a breach of the duty of loyalty sufficient to rebut the business judgment rule and survive a motion to dismiss. The business affairs of a corporation are to be managed by or under the direction of its board of directors.[43] In an effort to encourage the full exercise of managerial powers, Delaware law protects the managers of a corporation through the business judgment rule. This rule "is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interest of the company."[44] Nevertheless, a showing that the board breached either its fiduciary duty of due care or its fiduciary duty of loyalty in connection with a challenged transaction may rebut this presumption. Such a breach may be shown where the board acts intentionally, in bad faith, or for personal gain.[45]
In Stone v. Ritter, the Supreme Court of Delaware held that acts taken in bad faith breach the duty of loyalty.[46] Bad faith, the Court stated, may be shown where "the fiduciary intentionally acts with a purpose other than that of advancing the best interests of the corporation, where the fiduciary acts with the intent to violate applicable positive law, or where the fiduciary intentionally fails to act in the face of known duty to act, demonstrating a conscious disregard for his duties."[47] Additionally, other examples of bad faith might exist.[48] These examples include any action that demonstrates a faithlessness or lack of true devotion to the interests of the corporation and its shareholders.
Based on the allegations of the complaint, and all reasonable inferences drawn *358 therefrom, I am convinced that the intentional violation of a shareholder approved stock option plan, coupled with fraudulent disclosures regarding the directors' purported compliance with that plan, constitute conduct that is disloyal to the corporation and is therefore an act in bad faith. Plaintiffs allege the following conduct: Maxim's directors affirmatively represented to Maxim's shareholders that the exercise price of any option grant would be no less than 100% of the fair value of the shares, measured by the market price of the shares on the date the option is granted. Maxim shareholders, possessing an absolute right to rely on those assurances when determining whether to approve the plans, in fact relied upon those representations and approved the plans. Thereafter, Maxim's directors are alleged to have deliberately attempted to circumvent their duty to price the shares at no less than market value on the option grant dates by surreptitiously changing the dates on which the options were granted. To make matters worse, the directors allegedly failed to disclose this conduct to their shareholders, instead making false representations regarding the option dates in many of their public disclosures.
I am unable to fathom a situation where the deliberate violation of a shareholder approved stock option plan and false disclosures, obviously intended to mislead shareholders into thinking that the directors complied honestly with the shareholder-approved option plan, is anything but an act of bad faith. It certainly cannot be said to amount to faithful and devoted conduct of a loyal fiduciary. Well-pleaded allegations of such conduct are sufficient, in my opinion, to rebut the business judgment rule and to survive a motion to dismiss.[49]
C. Standing
Defendants move to dismiss seven of the nine claims asserted in plaintiff's complaint on the grounds that plaintiff lacks standing to assert these claims. According to defendants, plaintiff must have continuous ownership from the time of the transaction in question through the completion of the lawsuit in order to sustain a derivative action. It is unchallenged that plaintiff never owned stock in Maxim before 2001, and plaintiff acquired his stock through a merger, not by operation of law. Only two of the nine challenged transactions occurred while plaintiff held shares. Accordingly, defendant argues that dismissal of all claims arising before April 11, 2001, is proper pursuant to 8 Del. C. § 327.
Section 327 of the DGCL exists to prevent the purchasing of shares in order to maintain a derivative action attacking transactions that occurred before the purchase.[50]*359 It provides that a stockholder seeking to assert a derivative action on behalf of a corporation must have been a stockholder at the time of the transaction complained of, or his shares must have devolved upon him by operation of law.[51] Additionally, he must continuously hold stock through completion of the litigation.[52]
In most instances, Delaware courts have strictly construed this statute. Dispositive in this case is this Court's holding in Saito v. McCall.[53] There, two stockholders filed a derivative action, but their first claim alleged pre-merger breaches of fiduciary duties. The Court held that stockholders who obtained their stock pursuant to a stock-for-stock merger lacked standing to sue derivatively for transactions occurring before the merger.[54]
Plaintiff here faces the same problem. He became a shareholder on April 11, 2001, by way of a merger, not by operation of law. Therefore, he lacks standing to assert claims arising before April 11, 2001. The cases where this Court has applied section 327 with some leniency are not applicable here. For example, in the case of Helfand v. Gambee, plaintiff lost standing by virtue of reorganization.[55] To the contrary, plaintiff here argues that he gained standing by virtue of a merger. The law here is settled. Plaintiff may not assert claims arising before his ownership interest materialized on April 11, 2001.
D. Statute Of Limitations
Defendants contend that the statute of limitations of 10 Del. C. § 8106 bars plaintiff's claims because none of the challenged transactions occurred within the past three years. Further, defendants assert that plaintiff cannot save his claims by relying on any tolling doctrines since the information was publicly available. Plaintiff concedes as much by relying on the Merrill Lynch report as the basis of his claims, which was prepared using publicly disclosed information and historical stock prices. Thus, defendants argue, the statute of limitations bars all claims asserted in this complaint.
This Court applies a three-year statute of limitations to equitable claims only by analogy. The statute of limitations begins to run at the time the alleged harmful act is committed, regardless of plaintiff's knowledge of the act. Plaintiff, however, may toll the limitations period by specifically alleging that the facts were "so hidden that a reasonable plaintiff could not have made timely discovery of an injury necessary to file a complaint."[56] If plaintiff sufficiently meets his burden of showing that the statute was tolled, relief extends only until plaintiff is on inquiry notice. That is to say, tolling ends where plaintiff discovers, or in the exercise of reasonable diligence should have discovered, his injury.[57]
Plaintiff asserts that the doctrine of fraudulent concealment tolls the statute *360 of limitations in this case. Fraudulent concealment "requires an affirmative act of concealment by a defendant an `actual artifice' that prevents a plaintiff from gaining knowledge of the facts or some misrepresentation that is intended to put a plaintiff off the trail of inquiry."[58]
The allegations in the complaint satisfy the requirements of the doctrine of fraudulent concealment. Defendants allegedly caused Maxim to falsely represent that the exercise price of all the stock options it granted pursuant to its stock option plans was no less than the fair market value of Maxim's common stock, measured by the publicly traded closing price for Maxim stock on the date of the grant. To the extent that the date on which the grant was issued is not the same as the date that the defendants, in public filings, represented that the grant was issued, defendants affirmatively acted to conceal a fact that prevented plaintiff from gaining material relevant knowledge in an attempt to put plaintiff off the trail of inquiry. Plaintiff may rely on public filings and accept them as true, and need not assume that directors and officers will falsify such filings. Accordingly, where plaintiff alleges that defendants intentionally falsified public disclosures, defendants may not rely on the statute of limitations as a defense until plaintiff is placed on inquiry notice that such filings were fraudulent.
Defendants argue that there is no fraudulent concealment since Merrill Lynch based its report on public disclosures and plaintiff bases his complaint on the Merrill Lynch report. That is, defendants insist that Ryan, through investigation, could have discovered the same information that Merrill Lynch discovered. This defense is unconvincing. Shareholders may be expected to exercise reasonable diligence with respect to their shares, but this diligence does not require a shareholder to conduct complicated statistical analysis in order to uncover alleged malfeasance.[59] The above-mentioned facts, in conjunction with an alleged affirmative cover up, convince me that the actions were fraudulently concealed and, thus, defendants may not rely on the statute of limitations as a defense. Inaccurate public representations as to whether directors are in compliance with shareholder-approved stock option plans constitute fraudulent concealment of wrongdoing sufficient to toll the statute of limitations.[60]
*361 E. Unjust Enrichment
Finally, defendants contend that plaintiff's claim for unjust enrichment fails because there is no allegation that Gifford exercised any of the alleged backdated options and, therefore, Gifford did not obtain any benefit to which he was not entitled to the detriment of another. This defense is contrary both to the normal concept of remuneration and to common sense.
Unjust enrichment is "the unjust retention of a benefit to the loss of another, or the retention of money or property of another against the fundamental principles of justice or equity and good conscience."[61] A defendant may be liable "even when the defendant retaining the benefit is not a wrongdoer" and "even though he may have received [it] honestly in the first instance."[62]
At this stage, I cannot conclude that there is no reasonably conceivable set of circumstances under which Gifford might be unjustly enriched. Gifford does retain something of value, the alleged backdated options, at the expense of the corporation and shareholders. Further, defendants make no allegations that Gifford is precluded from exercising these options or that the options have expired. Thus, one can imagine a situation where Gifford exercises the options and benefits from the low exercise price. Even if Gifford fails to exercise a single option during the course of this litigation, that fact would not justify dismissal of the unjust enrichment claim. Whether or not the options are exercised, the Court will be able to fashion a remedy. For example, this Court might rely on expert testimony to determine the true value of the option grants or simply rescind them. Either way, Gifford's alleged failure to exercise the options up to this point does not undermine a claim for unjust enrichment Thus, I deny the motion to dismiss the unjust enrichment claim.
V. CONCLUSION
For the foregoing reasons, I grant defendants' motion to dismiss all claims arising before April 11, 2001. I deny defendants' motion to stay or dismiss with respect to all other claims.
IT IS SO ORDERED.
NOTES
[1] Compl. Ex. 1 at 1-2.
[2] Compl. Ex. 1 at 2.
[3] In re Maxim Integrated Prod., Inc. Derivative Litig., No. C-06-3344 JW (N.D.Cal.).
[4] 263 A.2d 281 (Del.1970).
[5] Defs.' Opening Br. in Supp. of Mot. to Dismiss at 10.
[6] McWane Cast Iron Pipe Corp., 263 A.2d at 283.
[7] Id.
[8] Id.
[9] Biondi v. Scrushy, 820 A.2d 1148, 1159 (Del.Ch.2003).
[10] Id. at 1160-63.
[11] 773 A.2d 1005 (Del.Ch.2000).
[12] In re Westell Techs., Inc., 2001 WL 755134 (Del.Ch. June 28, 2001).
[13] In re Chambers Dev. Co. S'holders Litig., 1993 WL 179335, at *8 (Del.Ch. May 20, 1993).
[14] Id. at *9.
[15] See, e.g., AFSCME Employees' Pension Planet v. Jobs, No. 06-5007 (N.D.Cal.); In re Caremark Rx, Inc. Derivative Litig., Master Docket No. 3:06-cv-00535 (M.D.Tenn.); Brandin v. Darwin, C.A. No. 2123-N (Del. Ch.). Additionally, numerous lawyers and law firms are compiling regularly updated lists of companies involved in securities fraud class actions and shareholder derivative class actions challenging timing of stock option grants. As of January 26, 2007, between 120-170 companies were implicated in lawsuits or investigations. See, e.g., Lieff Cabraser Heimann & Bernstein, LLP, Securities and Investment Fraud: Frequently Asked Questions on Stock Options Backdating and Stock Options Grants, http://www.lieffcabrasersecurities. com/options-backdating-faq.php# 9 (last visited Jan. 30, 2007).
[16] Although not determinative to my analysis, it is noteworthy that the California federal actions were filed only three weeks before this action, and have yet to reach oral argument on the motion to dismiss those cases. The California state court action has been stayed, and so is likely even further behind this action.
[17] Defs.' Opening Br. in Supp. of Mot. to Dismiss at 17 (quoting Friedman v. Alcatel Alsthom, 752 A.2d 544, 555 n. 46 (Del.Ch. 1999)).
[18] In re Chambers Dev. Co. S'holder Litig., 1993 WL 179335, at *6.
[19] Berger v. Intelident Solutions, Inc., 906 A.2d 134 (Del.2006) (reversing this Court's decision to grant stay where defendants showed that litigating in Florida would have been less burdensome because there was no showing of overwhelming hardship).
[20] Sanders v. Wang, 1999 WL 1044880, at *11 (Del.Ch. Nov.10, 1999).
[21] Id. at *12.
[22] Khanna v. McMinn, 2006 WL 1388744, at *11 n. 50 (Del.Ch. May 9, 2006) (citations omitted).
[23] Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984). Creating such a reason to doubt is a difficult feat under Delaware law. Rule 23.1 requires that the complaint "allege with particularity the efforts, if any, made by the plaintiff to obtain the action the plaintiff desires from the directors . . . and the reasons for the plaintiff's failure to obtain the action or for not making the effort." Ch. Ct. R. 23.1. That is, plaintiff must "comply with stringent requirements of factual particularity that differ substantially from the permissive notice pleadings" in order to create a reason to doubt that a majority of the board is disinterested or independent or that the board's action was a valid exercise of business judgment, thereby excusing plaintiff's failure to make demand. Zimmerman ex rel. Priceline.com, Inc. v. Braddock, 2002 WL 31926608, at *7 (Del.Ch. Dec.20, 2002).
[24] 634 A.2d 927, 933 (Del.1993).
[25] Id.
[26] Id. at 933-34.
[27] 8 Del. C. § 141(e).
[28] Rales, 634 A.2d at 932-35.
[29] Rales, 634 A.2d at 932-35. The Supreme Court identified three scenarios in which it would be inappropriate to challenge the business judgment of a current board of directors for purposes of demand under Rule 23.1:(1) where a business decision was made by the board of a company, but a majority of the directors making the decision have been replaced; (2) where the subject of the derivative suit is not a business decision of the board; (3) and where the decision being challenged was made by the board of a different corporation. Id. at 934. The Supreme Court included the second scenario out of a concern that demand upon a board should not be excused when a board did not have the opportunity to consider a corporate action. Demand "permits the board to have the opportunity to take action where it has not previously considered doing so." Id. at 934 n. 9.
This concern is not implicated where the board has delegated decision-making authority to a committee comprising one half or more of its members and a shareholder seek to challenge an action taken by that committee. Where half or more of the board has already approved a corporate action, even acting through a committee, there is no need for a shareholder to give the entire board a second bite at the apple.
[30] Compl. at ¶ 23.
[31] 1999 WL 1044880 (Del.Ch. Nov. 10, 1999).
[32] Id.
[33] Id. at *14-15.
[34] Defendants argue repeatedly that plaintiff's allegations ultimately rest upon nothing more than statistical abstractions. Nevertheless, this Court is required to draw reasonable inferences and need not be blind to probability. True, the Merrill Lynch report does not state conclusively that Gifford's options were actually backdated. Rather, it emphatically suggests that either defendant directors knowingly manipulated the dates on which options were granted, or their timing was extraordinarily lucky. Given the choice between improbable good fortune and knowing manipulation of option grants, the Court may reasonably infer the latter, even when applying the heightened pleading standards of Rule 23.1.
[35] Defendants also object that plaintiff's allegations are not particularized for purposes of Rule 23.1 because they do not directly allege knowledge on behalf of the directors. Yet, it is difficult to understand how a plaintiff can allege that directors backdated options without simultaneously alleging that such directors knew that the options were being backdated. After all, any grant of options had to have been approved by the committee, and that committee can be reasonably expected to know the date of the options as well as the date on which they actually approve a grant. Nor is it any defense to say that directors might not have had knowledge that backdating violated their duty of loyalty. Directors of Delaware corporations should not be surprised to find that lying to shareholders is inconsistent with loyalty, which necessarily requires good faith. See, e.g., Malone v. Brincat, 722 A.2d 5, 11-12 (Del.1998).
[36] In re Baxter Int'l, Inc. S'holders Litig., 654 A.2d 1268, 1269 (Del.Ch.1995).
[37] Aronson, 473 A.2d at 815.
[38] Nor do defendant directors' concerns necessarily end with consideration of the duty of loyalty. Were the board to pursue a derivative suit, it might unearth facts that would subject directors to further civil and criminal liability. Four board members, Gifford, Bergman, Wazzan, and Hagopian were familiar with Maxim's stock option plans. In 1999, they recommended the most recent options plan and submitted it for shareholder approval accompanied by their own directorial stamps of approval. In 2000 and 2001 proxy statements filed pursuant to section 14(a) of the Securities Exchange Act of 1934, Bergman, Wazzan, and Hagopian, representing half of the board, verified that they bore direct responsibility for granting options and that they granted all options according to the options plan. See Wal-Mart Stores v. AIG Life Ins. Co., 860 A.2d, 312, 320 n. 28 (citing DiLorenzo v. Edgar, 2004 WL 609374, at *2 (D.Del. Mar. 24, 2004) for the proposition that "[o]n a motion to dismiss, the court may take judicial notice of the contents of documents required by law to be filed, and actually filed, with federal or state officials"). Further, Bergman, Wazzan, and Hagopian were also members of the audit committee, and as such, directly responsible for approving any false financial statements that resulted from mischaracterization of these option grants. Thus, they might be exposed to potential criminal liability for securities fraud, tax fraud, and mail and wire fraud. See Martha Boersch and Renee Beltranena Bea, The Criminal Implication of Backdating Stock Options, The Metropolitan Corp. Counsel, Nov. 2006, at 8 (discussing potential criminal liability associated with backdating options and detailing criminal charges presently filed against executives associated with backdating options); see also Linda Chatman Thomsen, Speech by SEC Staff in Washington, D.C.: Options Backdating: The Enforcement Perspective (Oct. 30, 2006), available at http:// www. sec.gov/news/speech/2006/spch103006l ct.htm; Kenneth Winer, Elizabeth Gray and Pamela Johnson, Options Backdating: A Practical Guide to the Controversy, Vol. 20 Insights No. 9, p. 2 (Sept.2006).
[39] In re Gen. Motors (Hughes) S'holder Litig., 897 A.2d 162, 168 (Del.2006) (quoting Savor, Inc. v. FMR Corp., 812 A.2d 894, 896-7 (Del. 2002)).
[40] Id.
[41] White v. Panic, 783 A.2d 543, 549 (Del. 2001).
[42] Orman v. Cullman, 794 A.2d 5, 28 n. 59 (Del.Ch.2002).
[43] 8 Del. C. § 141(a).
[44] Aronson, 473 A.2d at 812.
[45] Malpiede v. Townson, 780 A.2d 1075, 1093-97 (Del.2001).
[46] 911 A.2d 362, 370 (Del.2006).
[47] Id. at 369.
[48] Id.
[49] I pause here to note the procedural posture of this case. This opinion addresses a motion to dismiss. Thus, neither party has had the benefit of any discovery. At this stage, plaintiffs are afforded certain presumptions of truth. Because of these presumptions, plaintiff may survive a motion to dismiss where the complaint relies on empirical data to support claims of: 1) specific instances of backdating; 2) violations of shareholder-approved plans or some other legal obligation; and 3) fraudulent disclosures regarding compliance with that plan. If, however, this case reaches the trial stage, plaintiff may no longer rely on liberal pleading assumptions. Instead, plaintiff must then rely on evidence presented at trial to demonstrate by a preponderance of the evidence that the defendants in fact backdated options, and thus are not afforded the protections of the business judgment rule. Even at that point, directors may still prevail by meeting the hefty burden of proving that the challenged transactions were entirely fair to the corporation and its shareholders. See, e.g., In re Walt Disney Co. Derivative Litig., 907 A.2d 693, 755-58 (Del.Ch.2005).
[50] 8 Del. C. § 327.
[51] Id.
[52] Lewis v. Anderson, 477 A.2d 1040, 1046 (Del.1984).
[53] C.A. No. 17132-NC, slip op., 2004 WL 3029876 (Del.Ch. Dec. 20, 2004).
[54] Id. at *18-23.
[55] 136 A.2d 558 (Del.Ch.1957).
[56] Smith v. McGee, 2006 WL 3000363, at *3 (Del.Ch. Oct.16, 2006).
[57] In re Dean Witter P'ship Litig., 1998 WL 442456, at *4-6 (Del.Ch. July 17, 1998) (citations omitted).
[58] Id. at *5-6.
[59] Although the mechanics of backdating differs from the mechanics of spring loading, each practice encompasses an element of intentional dissembling, either as to the date of the option grant, or as to the existence of potentially favorable information unavailable to the market and to all other shareholders. See In re Tyson Foods, Inc. Consol. S'holder Litig., ___ A.2d ___, ___, 2007 WL 1018209 (Del.Ch.2007).
[60] Further, the existence of fraudulent concealment is supported by the fact that no one noticed these patterns for at least six years. Though most alleged backdating occurred more than four years ago, before the birth of Sarbanes-Oxley, challenges to this compensation method are a recent phenomena, and most of the current litigation is born from the Merrill Lynch report and other articles like it, the earliest of which seem to have been published in 2005. The literature on the opportunistic timing of option grants and the more recent literature on backdating have focused on post and pre-grant stock returns as their tool for detecting and investigating abnormal patterns in option grants. In particular, to detect patterns that could be the result of backdating, this research examined whether post-grant returns tended to be positive, whether pre-grant returns tended to be negative, and whether post-grant returns tended to exceed pre-grant returns. Post and pre-grant returns have then been the tool used by this research to investigate the variables correlated with grant manipulation as well as to estimate the incidence of such manipulation. See, e.g., Lucian Bebchuk, Yaniv Grinstein & Urs Peyer, Lucky CEOs (Harvard Law and Economics, Working Paper Series No. 566, 2006), available at http:// papers.ssrn.com/sol3/papers.cfm?abstract_ id=945392 (citing David Yermack, Good Timing: CEO Stock Option Awards and Company News Announcements, 52 J. of Fin. 449 (1997)); Erik Lie, On the Timing of CEO Stock Option Awards, 51 Mgmt. Sci. 802 (2005); M.P. Narayanan and Hasan Nejat Seyhun, The Dating Game: Do Managers Designate Option Grant Dates to Increase Their Compensation? Review of Financial Studies (U. Mich. Working Paper Series, 2006), available at http://ssrn.com/abstract=896164).
[61] Schock v. Nash, 732 A.2d 217, 232-33 (Del. 1999).
[62] Id. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537775/ | 918 A.2d 838 (2007)
ST. IGNATIUS NURSING HOME, Petitioner
v.
DEPARTMENT OF PUBLIC WELFARE, Respondent.
Commonwealth Court of Pennsylvania.
Submitted on Briefs November 3, 2006.
Decided March 14, 2007.
*839 Joseph F. Murphy, Harrisburg, for petitioner.
Marisa L. Cohan, Asst. Counsel and Mary Frances Grabowski, Sr. Asst. Counsel, Harrisburg, for respondent.
BEFORE: COLINS, President Judge, and SIMPSON, Judge, and LEAVITT, Judge.
OPINION BY Judge LEAVITT.
St. Ignatius Nursing Home, petitions for review of the adjudication of the Department of Public Welfare (Department) denying its appeal of the Department's audit reducing its Medical Assistance (MA) reimbursement for the period from July 1, 1995, through December 31, 1995.[1] The Department held that the salaries of four management employees, who are registered nurses, should have been reported as nursing, not administrative, costs. By reclassifying these salaries, the Department found that St. Ignatius had exceeded the maximum allowable reimbursement for nursing costs during the period in question. Concluding that the Department erred in reclassifying the salaries in question, we reverse the adjudication in this respect. We affirm the remainder of the adjudication.
St. Ignatius is a licensed nursing home located in Philadelphia and is an MA provider for the Department. In 1992, St. Ignatius replaced its "Assistant Directors of Nursing" with "Unit Managers," assigning one Manager to each floor, or unit, of the facility. As did the Assistant Directors of Nursing, the Managers supervise the licensed nurses and certified aides who provide patient care. The Manager's job description provides that this individual "is responsible for total patient care, twenty four (24) hours per day on his/her assigned unit." Reproduced Record at 237 *840 (R.R. ____). In addition, St. Ignatius employs an individual to direct the facility's infection control program, the "Infection Control Director."[2] The Managers and the Infection Control Director are each registered nurses.
As an MA provider, St. Ignatius must file an annual cost report with the Department within 90 days of the close of its fiscal year and must use the Department's pre-printed form, known as the MA-11 report, to do so. Schedule C of the MA-11 form lists five cost centers for reporting purposes: Room and Board; Healthcare; General Administration; Other Costs; and Depreciation and Interest on Capital Indebtedness. R.R. 28. Under "Healthcare," there are ten reporting categories, including, inter alia, nursing, director of nursing and related clerical staff costs.[3]
On Schedule C of the MA-11 report, St. Ignatius reported the salaries of each Manager and the Infection Control Director on the line specified for "director of nursing" costs rather than on the line specified for "nursing" costs. Accordingly, their salaries were not used to calculate St. Ignatius' nursing costs. Notably, even without including the salaries of these four individuals, St. Ignatius reported that its nursing costs for the six-month period in 1995 had exceeded the maximum allowable for MA reimbursement by $139,525.
The Department's auditor reviewed the MA-11 report prepared by St. Ignatius and found it acceptable with respect to its report of nursing costs. However, the auditor's supervisor concluded otherwise. Accordingly, the Department issued an audit determining that $93,119 in costs related to the compensation of the three Managers and one Infection Control Director should have been listed on Schedule C as "nursing," not "director of nursing," costs. With this reclassification, St. Ignatius was found to have exceeded its maximum allowable costs for nursing staff hours by an additional $85,207.[4]
Another cost disallowed by the Department was $702 spent on flowers for employees who had experienced a death in the family. The Department concluded that bereavement flowers were not related to patient care and reduced St. Ignatius' allowable reimbursement costs by $614.
St. Ignatius filed a timely administrative appeal and, after a hearing, the Administrative Law Judge (ALJ) recommended that the appeal be denied. The Bureau of Hearings and Appeals adopted the ALJ's recommendation. The present petition for review followed.
On appeal,[5] St. Ignatius presents two issues for our consideration. First, it *841 contends that the Department's adjudication is based upon a new, and incorrect, interpretation of a regulation intended to cap nursing staff hours, not administrative costs, and it lacks any foundation in the language of that regulation. If allowed, the Department will improperly effect a new regulation by interpretation rather than by rulemaking. Second, St. Ignatius contends the purchase of bereavement flowers for employees was necessary; was related to patient care; and should be considered a reimbursable cost of the facility.
We address, first, the claim of St. Ignatius that the Department's treatment of the salaries of persons who supervise nurses, but do not provide direct patient care, was incorrect. St. Ignatius contends that the Department's cap on nursing costs has always been tied to the Pennsylvania Department of Health requirements for a licensed nursing home facility. Because the hours spent supervising nurses do not satisfy the Department of Health's standards for minimum nursing staff hours per patient, "supervising" is not "nursing" and must be treated separately in the MA-11 annual report.
The Department counters that as the agency charged with determining what can be reimbursed to an MA provider, its reimbursement determination with respect to St. Ignatius must be afforded controlling weight unless it is plainly erroneous and inconsistent with the applicable regulation. It contends that the Department of Health's standard for the minimum number of "nursing hours" that must be given to each patient is irrelevant. Further, it claims that the instructions on the MA-11 report direct that the salaries of all nurses, including those in administration, must be reported as nursing costs.
We begin with a review of the Department regulations found at 55 Pa.Code §§ 1181.1-1189.274, which provide the standards for reimbursement of an MA provider's costs.[6] Only those "[c]osts which are necessary and reasonable to the proper care of Medical Assistance patients and which are identified in this subchapter" are "allowable costs." 55 Pa.Code. § 1181.202. "[A]llowable costs include those costs necessary to provide skilled or intermediate care . . . [and] may include costs related to . . . (5)[N]ursing [and] (6) Director of nursing." 55 Pa.Code § 1181.212(c). The regulation caps the maximum allowance for nursing costs as follows:
(a) Except for special rehabilitation facilities, the allowable costs recognized for Medical Assistance may not exceed 3 nursing hours per patient per day for skilled nursing care and 2.6 nursing hours per patient per day for intermediate care.
*842 (b) For special rehabilitation facilities, the allowable costs recognized for Medical Assistance may not exceed 3.75 nursing hours per patient per day for skilled nursing care and 3.2 nursing hours per patient per day for intermediate care.
(c) Allowable nursing hours are calculated in accordance with the instructions of the Department's preprinted cost report.
55 Pa.Code § 1181.242 (emphasis added). The "preprinted cost report," the MA-11 report, repeats the cap found in 55 Pa. Code § 1181.242(a). It states:
1. Nursing Staffing: Total nursing salaries may not be more than 3.0 hours per skilled patient and 2.6 hours per intermediate care patient.
R.R. 81a (emphasis added).
St. Ignatius reported the salaries of its Managers and Infection Control Director as "director of nursing" costs on line 8 of Schedule C on the MA-11 report, as it had done on its previous reports filed for the fiscal years ending in June 1993, 1994 and 1995. It did not report these salaries as "nursing" costs on line 7 of Schedule C for several reasons.
First, the instructions to Schedule C of the MA-11 report identify "nursing" costs to be reported on line 7 as follows:
Salaries, wages, and fringe benefits of nurses, aides, orderlies; contracted nursing services; nursing supplies not chargeable to patients such as dressings, thermometers, etc.
R.R. 1263. "Nursing" costs are not just salaries; they include supplies used in nursing care. Where Schedule C does list salaries to be included, it does not list the salaries of nursing supervisors. It does include salaries of persons, such as orderlies, who are not registered nurses. Schedule C directs that "[s]alary and fringe benefits of the director of nursing" be reported on line 8 of Schedule C as "director of nursing costs," except where the director "also routinely provides patient care, whereupon the salary should be included with Nursing." Id.
Second, Schedule H, where allowable "nursing" costs are calculated, does not instruct that lines 7 and 8 on Schedule C are to be used together. To the contrary, it directs that the hours of a director of nursing be excluded, unless that individual spends more than 50% of his time attending to patients, rather than administration. This directive is evidenced in its instructions on "floor hours" that state as follows:
[T]he actual floor hours worked. Floor hours represent all actual hours that nursing care was provided, including nursing labor pools and overtime hours at straight time. The hours should generally exclude paid sick and vacation hours. In addition, unless the director of nursing regularly spends a majority of the week attending to patient needs rather than administrative procedures, those hours should be excluded.
R.R. 81 (emphasis added). In sum, 55 Pa.Code § 1181.242(a) and the MA-11 report itself teach that "nursing" costs are those that relate to direct patient care.
At the hearing, Ian Cohen, the Department employee who is responsible for auditing MA nursing home rates, explained the Department's contrary position. He testified that the Department interprets "nursing" to cover any task done by a nurse, and this is the meaning of the reference to "total nursing salaries" on Schedule H. He conceded a "director of nursing" salary is not a "nursing" cost, but he rejoined that Managers and the Infection Control Director are "not director[s] of nursing." R.R. 961. Mr. Cohen's conclusion appeared to be based upon the title of those individual employees as opposed to *843 their functions or whether those functions were the same as those of their predecessors, i.e., the assistant directors of nursing. In his opinion, making staff assignments, doing personnel evaluations and disciplining employees constitute "nursing" because these activities indirectly affect patient care. R.R. 1451-1452. Thus, Mr. Cohen contended that where the MA-11 instructs the inclusion of "all nursing salaries" in the Schedule H calculation of maximum allowable nursing costs, this means the "salaries of all nurses." Notably, Mr. Cohen could not explain why the salary of the St. Ignatius "Registered Nurse Assessment Coordinator," a registered nurse who is responsible for patient assessment at admission and for developing that patient's plan of care, was properly counted as a "director of nursing" cost, as opposed to a "nursing" cost.[7]
Raymond Keefe, the certified public accountant who prepared St. Ignatius' MA-11 report as of December 31, 1995, testified. He explained that prior to 1992, the persons now holding the title "Manager" then held the title "Assistant Director of Nursing." Their salaries were always reported as "director of nursing" costs, and this reporting treatment had always been accepted by the Department. Managers do not work "floor hours," as that term is used on Schedule H because they do not provide direct "nursing care." R.R. 81. Schedule H specifically provides that unless a director of nursing spends the majority of his or her week "attending to patient needs rather than administrative procedures, those hours should be excluded." R.R. 81. In Mr. Keefe's view, the preprinted report form was clear on this point.
Mr. Keefe's view was confirmed by the testimony of Marianna Hall, a former employee of the Department of Health, responsible for compliance surveys of nursing homes during the audit period in question. The Department of Health regulates quality of care in nursing homes, and its regulation states as follows:
A minimum number of general nursing care hours shall be provided for each 24-hour period. The total number of hours of general nursing care provided in each 24-hour period shall, when totaled for the entire facility, be a minimum of 2.7 hours of direct resident care for each resident.
28 Pa.Code § 211.12(I)(emphasis added).[8] Because the Infection Control Director and Managers do not provide direct, "hands on" nursing care to patients, Ms. Hall maintained the Health Department would not accept their hours as satisfying *844 the regulation at 28 Pa.Code § 212.12(I). R.R. 1406.
We conclude that St. Ignatius properly excluded the salaries of the Managers and Infection Control Director from its calculation of nursing costs. We do so because, as set forth below, neither the Department's regulation nor the instructions on its MA-11 report support any other accounting treatment of these salaries.
We begin with the Department's regulation on maximum nursing costs allowable for reimbursement. In 1983, the Department adopted Chapter 1181 of Title 55, which codified its prior cost standards,[9] as follows:
From January 8, 1983 through December 31, 1983, the allowable costs recognized for Medical Assistance may not exceed, by more than 20%, 2.5 nursing hours for skilled nursing care; the allowable costs recognized for Medical Assistance may not exceed by more than 20%, 2.0 nursing hours for intermediate care. (Nursing hours are calculated in accordance with the Department's preprinted cost report). Beginning January 1, 1984, the allowable costs recognized for Medical Assistance may not exceed by more than 20% the minimum staffing standards for nursing personnel specified in 28 Pa.Code Chapters 211-215 (relating to long term care facilities).
55 Pa.Code § 1181.242; 13 Pa. B. 2413 (emphasis added).
In 1986, the current version of 55 Pa. Code § 1181.242 was adopted, and it no longer contains a direct reference to the Department of Health's regulation at Title 28 of the Pennsylvania Code. However, this deletion did not initiate a substantive change. The Department's own comments about the 1986 revision explain that nursing costs are those incurred to satisfy the minimum required by the Department of Health. These comments state:
The Department of Health licensure regulations require, at a minimum, that 2.5 nursing hours of care per day be provided to a skilled care patient and 2.0 nursing hours of care per day be provided to an intermediate care patient. Therefore, considering the 20% override, the Department recognizes as allowable a maximum of 3.0 nursing hours per day for skilled care and 2.4 nursing hours per day for intermediate care, to the extent that the additional hours of care are actually provided.[10]
*845 16 Pa. B. 3294; R.R. 1249. Thus, the 20% formula was eliminated and replaced with a fixed number of allowable nursing hours for each level of care; however, the meaning of what constitutes nursing costs remained unchanged. We reject the Department's premise that the Department of Health's requirements for nursing care are irrelevant. If this were true, the Department would not have continued to reference the 20% formula on Schedule H of the MA-11 preprinted report. R.R. 82.
We also reject the Department's argument that instructions on the MA-11 report resolve the question of how to report the salaries of the Managers and the Infection Control Director in favor of the Department. Even Mr. Cohen conceded that "director of nursing" costs and "nursing" costs are different costs. There is no reason to distinguish them on Schedule C if they are to be aggregated on Schedule H. The Department's contention that "all nursing salaries," as it appears in the instructions to Schedule H of the MA-11 report, means "all salaries of nurses" is insupportable.
The dispositive question is how to interpret the term "nursing."[11] Where a term is not defined, we are instructed that "[w]ords and phrases shall be construed according to rules of grammar and according to their common and approved usage." 1 Pa.C.S. § 1903(a). Moreover, in ascertaining the common and approved usage or meaning of a word, we may resort to the dictionary. See, e.g., P.R. v. Pennsylvania Department of Public Welfare, 759 A.2d 434, 437 (Pa.Cmwlth.2000). Webster's New Collegiate Dictionary II, 751 (1995), defines the term "nursing" as follows: "[t]o serve as a nurse; . . . [t]o try to cure or treat . . . [t]o take special care." (emphasis added). In sum, "nursing" is the act of providing direct patient care.
Here, there is no dispute that the Managers and Infection Control Director do not take care of patients. The ALJ specifically found that these persons do not take care of patients, stating:
[M]anagers are responsible for supervising the patient care staff . . . They do not regularly provide `direct, hands on' patient care except in `emergencies' or on rare occasions `if a nurse needs assistance,' estimated to be 1% of their time.
Finding of Fact, ¶ 29; R.R. 1272. (citations omitted). The Department argues that supervising nursing personnel and developing infection control programs constitute "nursing" because they affect patient care. This is a reducio ad absurdum because everything done at St. Ignatius affects patient care.[12] Further, it cannot be reconciled *846 with the MA-11 report, which categorizes ten different healthcare costs by function performed, not by degree of the employee. Under the Department's theory, a registered nurse who decides to accept a clerical position at St. Ignatius would be assigned to a "nursing" cost simply because of his or her professional degree. Finally, the Department's argument does not square with its own practices because the Department agreed that the salary of the Registered Nurse Assessment Coordinator, a registered nurse who provides "individual patient assessment" upon admission, was not a "nursing" cost.
The Department's standard for determining allowable nursing costs has always been based upon the minimum hours of direct nursing care required by the Department of Health to be spent on direct patient care. When the 20% formula was replaced with a fixed number of hours per patient, the Department did not also state, either in the text of the regulation or in its explanatory comments, that administrative hours were to be included in those hours.[13] Further, the Department did not revise its use of the term "nursing hours," which is critical in determining the maximum allowable expense reimbursement. Where a term is continued to be used in an amendment to a regulation or statute, the presumption is that the term carries the same meaning as before. Commonwealth v. Sitkin's Junk Co. 412 Pa. 132, 137, 194 A.2d 199, 202 (1963).
In sum, if the Department had intended 55 Pa.Code § 1181.242 to cap the costs of administrative nursing costs, it should have so stated. It could have defined the difference between "nursing" and "director of nursing" costs, but it did not. It cannot do through interpretation that which it failed to do through rulemaking. We hold that the Department erred in finding that the salaries of the Managers and Infection Control Director should have been included as "nursing" costs on Schedule H. St. Ignatius properly reported them as "director of nursing" costs.
We turn next to St. Ignatius contention that its purchase of bereavement flowers for nursing facility employees is necessary and related to the proper care of nursing home facility residents. It contends that flowers sent to employees are related to patient care because they assist in staff morale and employee retention. In this regard, St. Ignatius relies on Mercy-Douglass Center, Inc. v. Department of Public Welfare, 144 Pa.Cmwlth. 451, 601 A.2d 913, 916 (1992).
In Mercy-Douglass, an MA nursing home provider appealed the Department's disallowance of reimbursement for the cost of directors' and officers' liability insurance. This Court found the disallowance unreasonable because under the Department's Provider Reimbursement Manual, the purchase of such coverage was a common and accepted expense for nursing homes. Such liability coverage is encouraged by the Pennsylvania Non-Profit Corporation Law, 15 Pa.C.S. §§ 5741-5747, and its purchase was considered an allowable cost under the Department's regulations.
Here, we find no such support in statute or regulation. There is no specific category of allowed expenses for staff morale in Chapter 1181 of Title 55 of the Pennsylvania Code, nor is there any evidence *847 that these expenditures are a common and accepted expense in the field. The Department did not err in disallowing this expenditure because "expenses . . . not necessary to patient care" are not considered as allowable costs. 55 Pa.Code § 1181.271(25).[14]
Accordingly, we affirm in part and reverse in part. We hold that only the salaries of nurses who are directly involved with patient care are to be included in the calculation of nursing costs. The salaries of nurses who perform administrative or supervisory tasks, without direct patient interaction or care, are to be excluded. The cost of bereavement flowers for employees of a nursing home are also properly excluded.
ORDER
AND NOW, this 14th day of March, 2007, the order of the Pennsylvania Department of Public Welfare, dated February 17, 2006, is hereby affirmed in part and reversed in part, in accordance with the attached opinion.
NOTES
[1] The audit covered a short period report because the rules providing for MA reimbursement changed effective January 1, 1996.
[2] The individual in this position is required to "[p]lan, develop organize, implement, evaluate, coordinate, and direct [the] Infection Control program . . . [d]evelop, maintain, and periodically update infection control precautions and aseptic techniques . . . [r]eview and analyze infectious disease laboratory reports and consult with the Registered Nurse Assessment Coordinator (RNAC) in developing the care plan . . . and [p]rovide the Director of Nursing Services with a report of pertinent findings and recommendations pertaining to nosocomial infection." R.R. 239.
[3] Schedule C also lists "Practitioners, Medical Director, Utilization and Medical Review, Social Services, Patient Activities, Volunteer Services" and provides a blank space for other healthcare categories, which St. Ignatius filled in with "Pastoral Care." R.R. 28.
[4] In its three prior MA-11 reports filed for June 1993, 1994 and 1995, St. Ignatius treated the salaries of the Managers and Infection Control Director as "director of nursing" costs. These MA-11 reports were audited and accepted by the Department.
[5] In an appeal from an adjudication of the Department, we determine whether the adjudication is supported by substantial evidence, whether the decision is in accordance with the applicable law, or whether constitutional rights were violated. Cambria County Home and Hospital v. Department of Public Welfare, 907 A.2d 661, 667 (Pa.Cmwlth.2006).
[6] The cost-based regulations provide in relevant part:
(a) The facility shall identify for cost finding allowable direct, indirect, ancillary and related organization costs that apply to patient care for each certified level of care.
(b) The facility shall submit a cost report (Financial and Statistical Report, MA-11) to the Department in accordance with Departmental requirements. The cost report shall be based on financial and statistical records maintained by the facility. The cost information contained in the cost report and in the facility's records shall be current, accurate, and in sufficient detail to support the claim for cost reimbursement. The Financial and Statistical Report (MA-11) outlines the expenses and revenues to be included in the cost report for MA.
55 Pa.Code § 1181.213.
[7] Mr. Cohen could not explain why the Department's audit found the MA-11 reports filed by St. Ignatius in June 1993, 1994 and 1995 to be correct. He believed the Department made a mistake and that St. Ignatius was "lucky." R.R. 968-969.
[8] The prior version of 28 Pa.Code § 211.12(n), adopted August 29, 1975, 5 Pa. B. 2333, read as follows:
A minimum number of general nursing care hours shall be provided for each 24-hour period. The total number of hours of general nursing care provided in each 24-hour period shall, when totaled for the entire facility, be a minimum of 2.7 hours of direct patient care for each skilled care patient and a minimum of 2.3 hours of direct patient care for each intermediate care patient. The total number of daily required hours shall be computed by multiplying the number of intermediate care patients by 2.3 hours and multiplying the number of skilled care patients by 2.7 hours. The two figures shall be added; the sum shall be the minimum total number of hours of general nursing provided in each 24-hour period for the entire facility.
28 Pa.Code § 211.12(n) (emphasis added). This subsection was amended in 1987, changing the subsection designation from (n) to (13). 17 Pa. B. 540.
[9] Since 1975, the Department's "Manual for Allowable Costs for Skilled Nursing and Intermediate Facilities" (Manual) had stated as follows:
Minimum staffing standards for classes of nursing personnel are specified in the Department of Health's Long Term Care Facility Standards and Regulations for Skilled Nursing Facilities and Intermediate Care Facilities. The allowable costs incurred and recognized for Medical Assistance may not exceed by more than 20% the minimum staffing standards for nursing personnel specified in these rules and regulations.
5 Pa. B. 2928 (1975) (emphasis added); R.R. 1248.
[10] The remaining comments were as follows:
Revisions were made to §§ 1181.2 and 1181.242 (relating to definitions and nursing staff allowance) to clarify the allowable nursing staff allowance for special rehabilitation facilities. Under current regulation, special rehabilitation facilities are defined as skilled and intermediate care facilities that provide services to patients who have physical disabilities to the extent that these patients require facility staffing of 50% more than the minimum levels specified in the Department of Health's Long Term Care Facilities Licensure Regulations. The changes remove the arithmetical formula for calculating the allowable nursing hours for special rehabilitation facilities. As a result of this change, these facilities may receive the benefit of having an additional 0.2 hours of care per day recognized as allowable for their intermediate care patients.
16 Pa. B. 3294-3295. The change was, if anything, to benefit nursing home MA providers.
[11] We are mindful that the Department's interpretation of what constitutes a reimbursable expense is to be given controlling weight unless it is plainly erroneous or inconsistent with the Department's regulations or the underlying statute. Cambria County Home and Hospital v. Department of Public Welfare, 907 A.2d 661, 667 (Pa.Cmwlth.2006). We conclude that the Department's newfound interpretation of the term "nursing hours per patient" to include the hours of any nurse employed in the facility, even one who performs supervisory or administrative duties, is erroneous and not consistent with the regulation. Accordingly, it is not entitled to deference.
[12] Mr. Cohen relied heavily on the fact that Managers are located "on the floor" and have "ultimate responsibility" for patient welfare. First, the location of the supervisor's office is irrelevant. The relevant question is whether the supervisor is providing direct patient care. Second, everyone in a management level position at St. Ignatius, whether or not that person is a healthcare professional, has "ultimate responsibility" for patient care because that is the business of St. Ignatius.
[13] Indeed, this formula continued to appear on Schedule H of the MA-11 report; the purpose of the Schedule H computation is to determine "nursing staffing 20% in excess of minimum." R.R. 82.
[14] In this regard, St. Ignatius is as guilty as the Department in falling for the logical fallacy that anything and everything affects patient care and must, therefore, be considered a reimbursable cost. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537779/ | 918 A.2d 290 (2007)
100 Conn.App. 466
Willis CAVANAUGH
v.
Joseph RICHICHI et al.
No. 27296.
Appellate Court of Connecticut.
Argued November 28, 2006.
Decided April 10, 2007.
*291 Paul J. Pacifico, Westport, for the appellant (defendant Robert W. Bloom).
Eric M. Higgins, Stamford, for the appellees (named defendant et al.).
Mark F. Katz, for the appellee (plaintiff).
BISHOP, DiPENTIMA and BERDON, Js.
PER CURIAM.
In this matter involving a property dispute, the defendant Robert W. Bloom[1] appeals from the judgment of the trial court rendered in favor of the plaintiff, Willis Cavanaugh. On appeal, the defendant claims that the court improperly found that (1) a deed for the subject property was delivered to the plaintiff with the requisite intent of transferring title and (2) a resulting trust was created. We affirm the judgment of the trial court.
The following facts and procedural history, as set forth by the court in its memorandum of decision, are relevant to the defendant's appeal. "The starting point for the analysis of the plaintiff's claims is December 24, 1962, when Helen Soderstrom, Beatrice Berg and Grace Wolfe executed a warranty deed to 120 Water Street, Norwalk, to Hillard E. Bloom, his brother, Norman R. Bloom, and Wallace H. Bell, Jr. This deed was recorded in the Norwalk land records in volume 591, page 536. The plaintiff's name did not appear as a grantee because the grantors did not know the plaintiff and were apparently reluctant to include him in the deed of conveyance. The plaintiff did, however, pay the grantors $5000, which was one half of the $10,000 deposit or down payment. The grantees took out a mortgage for approximately $45,000, which was paid by a partnership called Bell's Boatyard, which ran an oyster business from 120 Water Street, and of which the plaintiff was a one-third partner."
The court further found that a deed for the subject property was delivered to the plaintiff in 2003. The court stated: *292 "There was credible testimony that the 1993 deed from the three grantors was first delivered to an attorney R. Desarbo in New Haven with instructions not to deliver the deed until the estate of Norman Bloom was settled. The settlement of the estate has been completed, and Leslie Miklovich, Hillard Bloom's daughter and Norman Bloom's niece, found this 1993 deed in the papers returned to her by the New Haven attorney. She delivered the deed to the plaintiff, who then recorded it in the Norwalk land records on May 29, 2003, in volume 4920, page 334. The deed contained `executor's covenants' from Robert Bloom, who agreed that he did in fact sign the deed. Among other things, the deed to the plaintiff stated that its purpose was to `correct any deficiencies of a deed recorded in the Norwalk Land Records in Volume 591, Page 536' and that the result is that one third of the subject premises would be owned by Wallace H. Bell, Jr., `One-third (1/3rd) interest to Willis Cavanaugh,' one-sixth for Hillard E. Bloom and one-sixth for Robert W. Bloom, as executor of the estate of Norman R. Bloom, deceased."
On the basis of those findings, the court concluded that "a resulting trust was created in 1963, when the plaintiff paid half of the down payment and a third of the mortgage, and the deed from the three record owners of the subject premises is valid and binding even though not delivered and recorded for ten years after its execution. In accordance with General Statutes § 47-31,[2] the plaintiff, Willis Cavanaugh, is deemed to own one third of the subject premises." This appeal followed.
The defendant brings two claims on appeal that challenge the factual bases for the court's conclusions. We note that although the court concluded that there were two independent legal bases to support the plaintiff's claim, one would have sufficed. Because we conclude that the defendant's first claim must fail and that the record supports the court's finding with respect to the delivery of the deed, it is unnecessary to give further review to the defendant's second claim.
"On appeal, it is the function of this court to determine whether the decision of the trial court is clearly erroneous. . . . This involves a two part function: where the legal conclusions of the court are challenged, we must determine whether they are legally and logically correct and whether they find support in the facts set out in the memorandum of decision. . . ." (Citation omitted.) Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 221-22, 435 A.2d 24 (1980). When reviewing the factual basis of a trial court's decision, our role "is to determine whether [those] facts . . . are supported by the evidence or whether, in light of the evidence and the pleadings in the whole record, [they] are clearly erroneous. . . . On appeal, [our] function . . . is limited solely to the determination of whether the decision of the trial court is clearly erroneous. . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. . . . [W]e do not retry the facts or pass on the credibility of witnesses." (Citations omitted; internal *293 quotation marks omitted.) Wren v. MacPherson Interiors, Inc., 69 Conn.App. 349, 353-54, 794 A.2d 1043 (2002).
Our jurisprudence regarding the conveyance of title is well established. The "[d]elivery of a deed coupled with intent by the grantor to pass title is necessary for a valid conveyance. . . . The delivery of a deed includes not only an act by which the grantor parts with the possession of it, but also a concurring intent on the part of the grantor that it shall vest the title in the grantee. . . . Both elements involve questions of fact for the trier of fact." (Internal quotation marks omitted.) Young v. Young, 78 Conn.App. 394, 398 n. 5, 827 A.2d 722 (2003); see McCook v. Coutu, 31 Conn.App. 696, 701, 626 A.2d 1321, cert. denied, 227 Conn. 911, 632 A.2d 692 (1993); see also Lomartira v. Lomartira, 159 Conn. 558, 561, 271 A.2d 91 (1970).
On appeal, the plaintiff essentially argues that the court should have made different factual findings and reached different conclusions on the basis of the credibility of the witnesses. In effect, we are being asked to substitute our judgment, as to the credibility of the witnesses, for the judgment of the trial court. It is axiomatic that we cannot do that. In assessing the evidence, the court found that the plaintiff's claim of ownership was valid and that the deed was delivered to the plaintiff with the requisite intent of transferring title. In coming to this conclusion, the court made factual findings that are amply supported by the record.
The judgment is affirmed.
NOTES
[1] The plaintiff brought this action against Bloom, Joseph Richichi, Leslie Miklovich, Tallmadge Brothers, Inc., and John Gardella. Bloom is the only defendant challenging the judgment of the trial court on appeal. Thus, we refer to Bloom as the defendant.
[2] General Statutes § 47-31 provides in relevant part: "(a) An action may be brought by any person claiming title to, or any interest in, real . . . property . . . against any person who may claim to own the property, or any part of it, or to have any estate in it. . . . (f) The court shall hear the several claims . . . and render judgment determining the questions and disputes and quieting and settling the title to the property." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537789/ | 142 B.R. 730 (1992)
In re Joseph T. EGAN, Jacqueline Martin Egan, Debtors.
Bankruptcy No. 91-10203S.
United States Bankruptcy Court, E.D. Pennsylvania.
July 27, 1992.
*731 Alan L. Frank, Philadelphia, Pa., for debtors.
David E. Fraimow, Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pa., for Meridian Bank.
Frederic Baker, Asst. U.S. Trustee, Philadelphia, Pa.
MEMORANDUM
DAVID A. SCHOLL, Bankruptcy Judge.
Before this court in the instant joint Chapter 11 individual consumers' bankruptcy case is the issue of whether we can confirm the Debtors' Amended Plan of Reorganization ("the Plan"), pursuant to 11 U.S.C. § 1129(b), in light of the rejection of the Plan by the Debtors' unsecured creditors. We conclude that we can.
JOSEPH T. EGAN and JACQUELINE MARTIN EGAN ("the Debtors") filed this bankruptcy case pursuant to Chapter 13 of the Bankruptcy Code on January 10, 1991. Meridian Bank ("Meridian") and the Standing Chapter 13 Trustee moved to dismiss the case on the ground that the Debtors' indebtednesses to Meridian exceeded the debt limit imposed by 11 U.S.C. § 109(e). These indebtednesses arose from the Debtors' personal guarantees in the amount of $350,000 for debts of Trison Associates, a defunct ex-manufacturer of railroad car seat-locking devices formerly owned by the Husband-Debtor ("the Husband"). In response to this Motion, the Debtors moved to convert this case to a Chapter 11 case. *732 On October 8, 1991, no opposition having been raised, the case was in fact so converted.
On March 25, 1992, the Debtors filed a Chapter 11 Plan of Reorganization and accompanying Disclosure Statement. By Order of May 27, 1992, the Disclosure Statement was approved; ballots and objections to the Plan were to be filed by July 2, 1992; a voting report was due on July 9, 1992; and the confirmation hearing was scheduled on July 15, 1992.
The Debtors made peace with Meridian by granting it a second mortgage on their former residence, which they have retained as a rental property, in the amount of $35,000, to be liquidated over 15 years at a rate of one (1%) percent over the "National Commercial Rate." The Debtors' first mortgages on their former and present residences and certain tax liabilities were also to be paid in full under the Plan. But no payments were to be made to unsecured creditors.
Meridian voted to accept the Plan. However, four of five unsecured creditors voting rejected the Plan. Since the class of unsecured creditors was deemed to have rejected the Plan because no payments were made to its members, 11 U.S.C. § 1126(g), the vote of the one unsecured creditor who accepted the Plan not only was puzzling, but also was irrelevant.
However, no Objections to confirmation were filed. At the confirmation hearing, in which the Debtors sought to have the plan confirmed under 11 U.S.C. § 1129(b), no objecting parties appeared, and only the Husband took the stand. He stated that he was presently employed as a sales representative by Power Rail Corp., earning about $40,000 annually from this employment. He also testified that he had begun a new railroad-oriented sales business, United Products, Inc. ("United"), from which he projected annual earnings of $4,000 to $8,000. The Wife-Debtor has been continuously employed as a reservation manager at a Holiday Inn, and presently earns an annual salary of $29,000.
The Husband also presented a list of the Debtors' present property holdings. The Debtors' present home was valued at $190,000 and said to be subject to a mortgage of $177,831. The Debtors' former home was valued at $104,000 and was said to be subject to a mortgage of $71,914, plus Meridian's $35,000 mortgage. This property generated net rents of about $600 monthly, $355 of which were paid to Meridian. A 1987 Volvo automobile, valued at $4,000, was allegedly subject to a lien and exemptions equal to that amount. Cash of $325 and a $1,000 value attributed to United were claimed as exempt under 11 U.S.C. § 522(d)(5). In sum, although the Debtors planned to retain all of the property held by them, they claimed all of it as exempt.
Apparently believing that it would enhance the Debtors' prospect for confirmation, the Husband offered, in the course of the hearing, to amend the Debtors' plan to reflect an immediate payment of $1,000, to be distributed pro rata to their unsecured creditors. This payment will obviously be nominal, because the Debtors' unsecured creditors, exclusive of Meridian, are owed about $100,000, according to their Schedules.
This court recently had occasion to discuss the circumstances in which individual consumer Chapter 11 debtors can "cram down" a plan rejected by a class of unsecured creditors, pursuant to 11 U.S.C. § 1129(b), in In re Harman, 141 B.R. 878 (Bankr.E.D.Pa.1992). In that decision, we questioned whether several of the policy reasons for recognizing a "new value exception" to the "absolute priority rule" set forth in 11 U.S.C. § 1129(b)(2)(B) applied in a consumer bankruptcy case. Id., at 886-87. Compare In re 222 Liberty Associates, 108 B.R. 971, 983-85 (Bankr.E.D.Pa. 1990) (new value exception recognized in context of a business case). Without deciding whether the new value exception could ever be applied in such a context, we held, in Harman, that we were obliged to carefully scrutinize the Harman debtors' fulfillment of all pertinent Code requirements. Id. at 888. Ultimately finding that the Harman debtors' proposed living expenditures of over $32,000 monthly, which would exhaust their income, were too lavish, we denied confirmation of their proposed plan on the basis of 11 U.S.C. §§ 1129(a)(3) and *733 (b)(1). Id. at 888-90. However, we accorded the Harman debtors an opportunity to (preferably) attempt to negotiate a resolution with their creditors, or to propose an amended plan which reflected at least some measure of "belt-tightening."
There is, however, one very significant difference between Harman and the instant case. In Harman, the Debtors' plan proposed their retention of non-exempt property in the amount of $166,000, as well as their exempt property. Id. at 881. It is only because of this factor that we became concerned about the application of the absolute priority rule in that case. Id. at 885. This is because, if debtors intend to retain only exempt property, then they are merely retaining that which is their absolute right to retain in any event, and they are not, properly speaking, receiving or retaining "any interest that is junior to the interests" of any class of creditors, 11 U.S.C. § 1129(b)(2)(B), including the class of unsecured creditors.
The Debtors have claimed that all of their property is exempt. No objections to their exemptions claimed were timely filed. See Federal Rule of Bankruptcy Procedure 4003(b). Therefore, no objections to those exemptions can now be recognized, and the Debtors' claim of exemptions of all of their property is conclusively established. See Taylor v. Freeland & Kronz, ___ U.S. ___, ___-___, 112 S.Ct. 1644, 1648-49, 118 L.Ed.2d 280 (1992).
Therefore, it appears that no impediment to confirmation of the Debtors' plan presents itself. This conclusion is not dependent on the Debtors' offer to pay $1,000 to their creditors. The only effect of that offer is to eliminate the "deemed rejection" of the plan under 11 U.S.C. § 1126(g). However, unless a new vote would be requested and would come out differently than the last vote, the rejection of the Plan by the unsecured creditors, if not automatic, is still very real.
We do not mean to suggest, by the foregoing analysis, that confirmation of the Debtors' Plan, over the objection of unsecured creditors, is automatic simply because they have not retained non-exempt property. Creditors could have objected to any aspect of the plan. And, even in the absence of any objection to confirmation, this court retains an independent duty to satisfy itself that all of the criteria of 11 U.S.C. § 1129 are satisfied before confirming a plan. See In re Richard Buick, Inc., 126 B.R. 840, 846 (Bankr.E.D.Pa.1991). However, it is not our role to become a "grand inquisitor" and attempt to conjure up every potential objection to confirmation which could have been raised. Id. The absence of objections to confirmation is therefore an important factor in determining whether to confirm the instant Plan.
In Harman we refused to confirm the Debtors' plan because we felt that the debtors had not made a sufficient financial commitment to satisfy the "good faith" requirement of 11 U.S.C. § 1129(a)(3), or to establish that they had treated all of their creditors, including unsecured creditors, "fairly and equitably," as required by 11 U.S.C. § 1129(b)(1).
The instant Debtors are hardly impoverished. Their total annual income totals about $80,000. They have no dependent children. Compare, e.g., In re Capodanno, 94 B.R. 62, 66 (Bankr.E.D.Pa. 1988) (family of nine survives an income of about $21,500 annually); and In re Navarro, 83 B.R. 348, 350 (Bankr.E.D.Pa.1988) (family of four, which had income of about $15,000 annually, challenged for "lavish" religious donations). However, their income is less than one-fifth of that projected by the Harman Debtors. While we could have conceivably sustained a stiff challenge to the reasonability of the Debtors' budget, we do not consider their lifestyle to be inherently lavish, such that we are prepared to sua sponte declare their plan violative of 11 U.S.C. §§ 1129(a)(3) or (b)(1). Compare In re Hines, 723 F.2d 333, 334 (3d Cir.1983) (nominal Chapter 13 plan payments to unsecured creditors do not constitute lack of good faith); and In re Gathright, 67 B.R. 384, 387-88 (Bankr.E.D.Pa. 1986), appeal dismissed, 71 B.R. 343 (E.D.Pa.1987) (in the context of 11 U.S.C. § 1325(a)(3) of Chapter 13, lack of good faith refers only to serious debtor misconduct in the bankruptcy proceeding itself). *734 We do believe however, that, to be found to be treating unsecured creditors "fairly and equitably," a showing comparable, although less demanding, than that required by 11 U.S.C. § 1325(b)(1)(B) is necessary.
Especially in light of the fact that the Debtors have amended their Plan to make at least a nominal payment to unsecured creditors, we are unwilling to find that any bars to confirmation appear here. As in Chapter 13, see Hines, supra, we do not believe that a zero-payment plan as to unsecured creditors is inherently objectionable if the Debtors lack the means to make payments to such creditors. We are not prepared to find, noting the lack of objections to confirmation and considering the instant record, that the Debtors do not lack the means to treat unsecured creditors better than they have in the Plan.
We will therefore enter an Order confirming the Debtors' Plan. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537792/ | 918 A.2d 1207 (2007)
2007 ME 49
STATE of Maine
v.
Jason E. GORNEAULT.
Supreme Judicial Court of Maine.
Submitted on Briefs: February 27, 2007.
Decided: April 10, 2007.
*1208 Neale T. Adams, District Attorney, Todd R. Collins, Caribou, for State.
James M. Dunleavy, Dunleavy Law Offices, P.A., Presque Isle, for defendant.
Panel: CLIFFORD, ALEXANDER, CALKINS, LEVY, and SILVER, JJ.
CLIFFORD, J.
[¶ 1] Jason E. Gorneault appeals from a judgment of conviction for operating under the influence (Class C), 29-A M.R.S. § 2411(1-A)(B)(3) (2006), and operating after habitual offender revocation (Class C), 29-A M.R.S. § 2557(2)(B)(2) (2005),[1] entered in the Superior Court (Aroostook County, O'Mara, J.) following the entry of his conditional guilty plea to both charges pursuant to M.R.Crim. P. 11(a)(2). Gorneault contends that the court (Hunter, J.) erred in denying his motion to suppress evidence because, he argues, the evidence was obtained following an illegal stop of his vehicle. We disagree, and affirm the judgment.
I. BACKGROUND
[¶ 2] On the evening of May 7, 2005, police responded to a burglary report on West Road in Westmanland, a rural area. One officer sought the public's help by signaling to all passing motorists with a flashlight to stop so that he could briefly inquire of them if they had noticed anything suspicious in the area. At the time, the police knew that the burglary had occurred only thirty minutes to two hours before, and hoped to obtain information quickly.
[¶ 3] The officer stopped every vehicle that passed through the area, including one driven by Gorneault. When the officer approached Gorneault's vehicle, he noticed several indications that Gorneault had been drinking alcohol, and, following the administration of field sobriety tests, arrested Gorneault, who was later charged with operating under the influence (Class C), 29-A M.R.S. § 2411(1-A)(B)(3), and operating after habitual offender revocation (Class C), 29-A M.R.S. § 2557(2)(B)(2). The court (Hunter, J.) denied Gorneault's subsequent motion to suppress all evidence obtained as a result of the stop.
[¶ 4] Gorneault entered a conditional guilty plea to both charges pursuant to M.R.Crim. P. 11(a)(2), preserving for appellate review the denial of his motion to suppress. The court (O'Mara, J.) sentenced Gorneault to eighteen months incarceration with all but six months suspended, two years of probation, a $2100 fine, and a six-year license suspension for operating under the influence, and a $1000 fine for operating after revocation. Gorneault's appeal followed.
II. DISCUSSION
[¶ 5] Gorneault argues that the court erred in denying his motion to suppress because his vehicle was stopped by the police without any reasonable articulable suspicion that he had committed a crime. We review the suppression court's determinations of historical facts for clear error, but review the "application of legal principles to those findings independently, . . . because we are in as good a position as the trial judge to decide whether those particular facts warrant a legal conclusion." State v. McCarthy, 2003 ME 40, ¶ 11, 819 A.2d 335, 339.
[¶ 6] Generally, an investigatory traffic stop is constitutionally legitimate if the officer conducting the stop has "an articulable suspicion that criminal conduct has taken place, is occurring, or imminently *1209 will occur, and the officer's assessment of the existence of specific and articulable facts sufficient to warrant the stop is objectively reasonable in the totality of the circumstances." State v. Lafond, 2002 ME 124, ¶ 6, 802 A.2d 425, 427-28 (quotation marks omitted); see U.S. CONST. amend. IV; ME. CONST. art. I, § 5.[2] Suppression is not always warranted when police stop a vehicle without reasonable articulable suspicion, however.
[¶ 7] In Illinois v. Lidster, 540 U.S. 419, 124 S.Ct. 885, 157 L.Ed.2d 843 (2004), police set up a highway checkpoint at the scene of a hit-and-run accident that had taken place one week earlier to obtain any helpful information from the motoring public. 540 U.S. at 422, 124 S.Ct. 885. As vehicles stopped at the checkpoint, police asked the drivers whether they had seen anything relating to the accident and handed them a flyer seeking assistance in identifying the driver, who had fled the scene of the accident. Id. As he proceeded through this checkpoint, Lidster, the defendant, swerved, nearly hitting an officer; he also smelled of alcohol. Id. Lidster was arrested and later charged with operating under the influence of alcohol. Id.
[¶ 8] The United States Supreme Court upheld the state trial court's denial of Lidster's motion to suppress, noting that in an information-seeking highway stop, the purpose is not to determine whether the vehicle's driver is committing a crime, but rather to seek helpful information in order to apprehend the perpetrator of a specific crime committed by another. Id. at 422-23, 124 S.Ct. 885. Because (1) police were seeking information about a specific crime, instead of finding perpetrators of "unknown crimes of a general sort"; (2) police tailored their checkpoint to fit their investigatory needs; (3) the stops were very brief in duration and unlikely to arouse anxiety or alarm; and (4) the police did not act in a discriminatory manner, the Court held that the stop of Lidster did not violate his rights under the Fourth Amendment. Id. at 427-28, 124 S.Ct. 885; see also State v. Moulton, 1997 ME 228, ¶¶ 2-3, 10, 704 A.2d 361, 362-64 (affirming the denial of a motion to suppress evidence obtained after a police officer approached a vehicle to see if the vehicle was disabled or the driver needed assistance, and subsequently arrested the driver for operating under the influence).
[¶ 9] The circumstances of the brief stop of Gorneault's vehicle and of his subsequent arrest are substantially similar to those in Lidster. Police set up a roadside inquiry of every vehicle passing through an area where a crime had recently been committed for the purpose of obtaining information about the crime and its perpetrator. The stop was of very brief duration and unlikely to cause alarm or anxiety, and the questions were limited to those related to the recently committed burglary. The purpose of the brief stop and the inquiry was not to determine if the drivers themselves committed a crime, nor to conduct general crime investigation, but rather was in response to a specific crime committed at a specific time and in a specific location. Gorneault's condition was observed during that brief stop. Accordingly, the Superior Court did not err in denying Gorneault's motion to suppress.
The entry is:
Judgment affirmed.
NOTES
[1] Section 2557 has since been repealed and replaced by 29-A M.R.S. § 2557-A (2006). P.L. 2005, ch. 606, §§ A-10, A-11 (effective Aug. 23, 2006).
[2] "The Fourth Amendment to the U.S. Constitution, and Article 1, Section 5 of the Maine Constitution, offer identical protection against unreasonable searches and seizures." State v. Patterson, 2005 ME 26, ¶ 10, 868 A.2d 188, 191. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537953/ | 6 B.R. 153 (1980)
In re JACK HUDSON, INC., Debtor.
JACK HUDSON, INC., a Nevada Corporation, First National Bank of Nevada, a Nevada Corporation, Plaintiffs,
v.
RENO/SPARKS INDIAN HOUSING AUTHORITY et al., Defendants.
Bankruptcy No. 80-00420, Adv. No. 80-0034.
United States Bankruptcy Court, Nevada.
September 12, 1980.
*154 David R. Belding, Stephen R. Harris, Reno, Nev., for plaintiffs.
David R. Houston, Sparks Indian Housing Authority, Reno, Nev., for defendants.
Michael Goldon, Reno, Nev., for Yerington Tribe.
Sherley Smith, U.S. Attys. Office, Reno, Nev., for Dept. of Housing and Urban Development.
OPINION AND DECISION
BURT M. GOLDWATER, Bankruptcy Judge.
The issue was raised in this case in a very peculiar way. The issue was raised in chambers and then in filing an opposition to the preliminary injunction and the debtor's standing. I consider that more or less of a motion under FRCP 17(a) adopted by Bankruptcy Rule 717.
I am not used to non-pleadings; and I am not used to some of these unorthodox procedures, but this is how it was raised. So, I am treating it as a motion under Rule 17(a).
Rule 17(a) requires actions to be brought in the name of the real party in interest.
It is contended here essentially that there is no right to bring the action on two contracts because the contracts were made with another corporation of the same name incorporated in New Mexico.
As I view the facts, the Reno/Sparks Indian Tribe Housing Authority entered into a contract for development and delivery of 20 houses and lots on September 15, 1978 with Jack Hudson, Inc., a New Mexico corporation.
Steve and Hudson, a Nevada corporation entered into a same-type of agreement for 30 units with Yerington Tribe in Yerington on January 26, 1979.
Those are the two basic contracts.
Both agreements are to be funded through HUD as a reimbursement and paid for, although the contractor has to fund construction. They provide and prohibit against assignment without the consent of the Tribes and HUD.
Both contracts were assigned to the First National Bank for financing on January 24, 1979 with consent of HUD and the Tribes.
*155 Those assignments provide that they are subject to the claims of materialmen and others; and that the performance is to be done by the original promissors.
The testimony in support of the position of the Plaintiff is that the financing with the First National Bank required a Nevada corporation to perform the contracts. A Nevada corporation was agreed to by the chief proponent of the contracts, Mr. Hudson; and a corporation of Jack Hudson, a Nevada corporation was formed August 19, 1979.
Looking towards the formation of a Nevada corporation to perform the contracts, the following was done: As to the Yerington contract, Mr. and Mrs. Steve Hudson on July 24, 1979 (the same day the note to the bank was signed), as officers, directors and stock holders resigned and gave all their right, title and interest to Jack Hudson personally. On August 9, 1979, before the de jure corporation was formed, a resolution (misdated 1978) by Steve and Hudson, Inc. assigned the Yerington contract to Jack Hudson, Inc. On August 9th (the same day misdated 1978) Jack Hudson, Inc. of Nevada agreed to accept the assignment and to perform the contract. On August 21, 1979 the Yerington Tribe approved the assignments. That was after the formation of the corporation, and with knowledge of the contents and the resolutions.
The contention is made that the resolutions were signed by a non-officer and that the resolutions are ineffective.
As to the Reno Tribe contract there was no direct assignment or transfer to Jack Hudson of Nevada.
The Nevada corporation opened an office in Reno and both contracts were funded by payment from the monies from the First National Bank. The contracts have been concluded except for punch lists, warranties and unpaid claims. The Nevada corporation was to receive funding and to perform the work.
The issue under Rule 17(a) of the Federal Rules of Civil Procedure is that all actions must be brought in the name of the real party in interest.
A study of that rule shows that the real party in interest isn't always the party to the contract. The purpose is to prevent the prosecution of the action by persons who have no right, title or interest in the cause and to require the actual party for relief to prosecute the cause, to avoid the multiplicity of litigation and to protect the defendants from the same demands and to avail the defendants of counter claims against the real party in interest, so that there will be full protection.
The arguments of the defendants may be boiled down as follows: Defendants did not deal with Jack Hudson of Nevada because it was not named in the contracts. One contract was New Mexico Jack Hudson.
The Reno contract was not assigned to J.H. of Nevada. If it was deemed assigned, the assignment was never approved under Section 25.
The Nevada corporation was not even in existence until after the bank loans.
The Yerington contract was assigned before there was a Nevada corporation, and the officer who signed the resolution was not an officer.
The second thing, the defendants were prejudiced because they do not know of a Jack Hudson of Nevada and they have counterclaims which they may want to assert against Jack Hudson of Nevada and they believe it insolvent.
Third, they cannot have dealt with Jack Hudson of Nevada because it did not exist at any time the pertinent documents were executed.
And four, the pleadings do not commit them to an estoppel because they did not know who the entities were at the time they pleaded in various cases.
The answer as I see it is that the Yerington contract with Steve and Hudson was duly assigned with the approval of the Tribe to Jack Hudson of Nevada. The resolutions were clearly approved, and the Yerington Tribe had received the performance and has had the benefits of the performance *156 of Jack Hudson of Nevada. No matter that the resolutions were signed by a non-officer. They were on notice who was going to perform the contract and that de facto corporation came into existence, and when it did, they estopped to deny the existence as what corporation is performing the contract; so, that the Yerington Tribe contract does not give me any problem at all.
The Reno contract is a problem. Jack Hudson of Nevada became an actual entity which Yerington and Reno dealt with. But there is no showing that either Tribe was prejudiced by the bank's financing of a Nevada corporation as opposed to a New Mexico corporation of the same name. Neither Reno nor Yerington deny the existence of Jack Hudson of Nevada, and their pleadings and counterclaims or demands bear upon dealings with Jack Hudson of Nevada. There is not one showing made that Jack Hudson of New Mexico had anything to do with the performance except the promotions.
I do not think the defendants are prejudiced because they hold funds, subject to the injunction of the Court, which may be easily retained if proof be made of damages or loss.
The record is replete with sloppy conduct of professionals and non-professionals, but that's what makes lawsuits.
There is no assignment of the Reno contract from New Mexico to Nevada.
The prohibitions against assignment in the HUD contracts are like prohibitions in any contracts, and they may be waived; and they certainly were waived by accepting all the benefits. The re-statement of Unjust Enrichment would show that they cannot blow hot and cold and now say that they didn't receive the benefits of the transactions from the bank and the Nevada corporation when HUD with its lawyers and the Tribe with its lawyers go through the way they did. They accepted the sloppy record and they are now estopped by their conduct and acceptance of the benefits.
The assignment from Steve and Hudson to Jack Hudson of Nevada is not explicit. It is misdated. The vice president was not the vice president, and the corporation was not in existence at the time. A lot of these things are cured by what actually happened. And equity will have done that which should be done.
Both the contracts were approved for assignment to First National Bank of Nevada, and when they did that, then the funds were used in the projects to be built. A Nevada corporation was formed (at the request of the bank) which did the performance, kept the records, and is the real party in interest under the Federal Rules of Civil Procedure.
There is no prejudice to the defendants, and additional parties may be brought in for complete relief, if necessary. There is plenty of opportunity under the Rules to get complete relief.
In my opinion, both the Tribes and HUD have been delinquent in not insisting upon precise and documented information before accepting the performance and paying money. Two payments to Jack Hudson, Inc. and the bank on the Reno case, and one payment on the Yerington to Jack Hudson in the other one. Thus, they are estopped by their action and conduct to deny the de facto existence of Jack Hudson of Nevada, which has now become de jure; they waived their position on the other. That they did deal with a corporation with officers in Reno, Nevada was a finding which they could have determined from First National Bank of Nevada which loaned that corporation money for the performance of their contracts.
Strict construction of these documents would result in more litigation and more frustration, more waste of time and more loss of money for both sides. We might establish that there was not precise and exact standing in Court, but the purpose of real party interest Rule is served if the defendants are not prejudiced and the rightful owner of the claim presents the matter and multiplicity of suits are avoided and the defendants are protected in every *157 respect. They will have their rights and counterclaims for damages heard and protected.
So, the defenses or motions or whatever you might call this, for the proper party that brought this issue from chambers to a determination here as to whether or not we are in Court with the right party-the motions or defenses, or whatever they are are dismissed.
The real party in interest as Plaintiff is before the Court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537958/ | 6 B.R. 194 (1980)
In re UNIVERSAL PROFILE, INC., Debtor.
UNIVERSAL PROFILE, INC., Plaintiff,
v.
ATLANTA FEDERAL SAVINGS AND LOAN ASSOCIATION, E. John Hosch, Rex Baker, Jesse Jordan, Elizabeth Ann Ekern f/k/a Elizabeth Ann Kandell, Universal Profile Trust, and John L. Westmoreland, Jr., Defendants.
and
Elizabeth Ann EKERN f/k/a Elizabeth Ann Kandell, Third-Party Plaintiff,
v.
Karl A. KANDELL, Third-Party Defendant.
Bankruptcy No. 80-00358A, Adv. No. 80-0222A.
United States Bankruptcy Court, N.D. Georgia, Atlanta Division.
September 18, 1980.
Joseph F. Page, Robin N. Loeb, Garland, Nuckolls, Kadish, Martin & Catts, P.C., Atlanta, Ga., for Elizabeth Ann Ekern.
Donald J. Ellis, Carroll, Greenfield, Beltran, Ellis, Atlanta, Ga., for Karl A. Kandell.
ORDER
HUGH ROBINSON, Bankruptcy Judge.
A "Motion to Dismiss Third Party Defendant's Counterclaim for Want of Subject Matter Jurisdiction" filed by defendant and third party plaintiff Elizabeth Ann Ekern brought the matters involved herein before this Court. Upon reviewing the motion and the briefs submitted by the parties the Court makes the following entry.
FINDINGS OF FACT
1. A voluntary petition under chapter 11 of title 11 of the United States Code was filed by Universal Profile, Inc., (hereinafter referred to as "UPI") on February 5, 1980.
2. Karl A. Kandell, (hereinafter referred to as "Kandell") is the sole director, officer and shareholder of UPI.
3. Elizabeth Ann Ekern, (hereinafter referred to as "Ekern") is the former wife of Kandell.
*195 4. The present adversary proceeding was commenced by UPI's "Complaint to Sell Free and Clear of Liens" filed on March 17, 1980. UPI desires to sell two dwellings and improvements located on seven acres of land.
5. The real property which is the subject matter of the instant adversary proceeding was the marital residence of Ekern and Kandell.
6. On May 30, 1979 Ekern and Kandell entered into a settlement agreement which settled their rights with regard to their property, alimony, child custody, child support and related matters.
7. By virtue of this settlement agreement Ekern claims an interest in the real estate UPI wishes to sell.
8. An "Answer, Counterclaim and Third Party Complaint" was filed by Ekern on June 16, 1980. It is alleged that UPI is bound by the settlement agreement for various reasons that are not pertinent to the issue presently before the Court. The third party complaint against Kandell asserts claims of breach of contract and fraud with respect to the settlement agreement.
9. Kandell responded to the third party complaint by filing an "Answer and Counterclaim" on May 27, 1980. The counterclaim requests this Court to modify the Final Judgment and Decree entered by the Superior Court of Cobb County, Georgia, which awards periodic payments of alimony and child support, so as to decrease the payments commensurate with Kandell's changed income and financial status.
10. On June 16, 1980 Ekern filed a "Motion to Dismiss Third Party Defendant's Counterclaim for Want of Subject Matter Jurisdiction." In the alternative Ekern has filed a "Motion to Strike Certain Portions of Defendant's Counterclaim."
APPLICABLE LAW
Ekern contends that this Court does not have subject matter jurisdiction over Kandell's counterclaim for the reasons that the determination of this controversy is not necessary to the administration of UPI's estate. It is also argued that if it is determined that this Court does have subject matter jurisdiction over Kandell's counterclaim, the Court should yield its jurisdiction to the Superior Court system of Georgia.
Chapter 90, Sections 1471 through 1482 were added to 28 U.S.C. by Section 241(a) of the Bankruptcy Reform Act of 1978, Public Law 95-598. Although 28 U.S.C. Chapter 90 does not become law until April 1, 1984, the amendments made by Section 241 of the Bankruptcy Reform Act are applicable to bankruptcy courts during the transition period. Title IV, Section 405(b) of the Bankruptcy Reform Act of 1978, Public Law 95-598.
The applicable statutory provision is 28 U.S.C. § 1471, the pertinent part of which reads:
"(b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings under title 11 or arising in or related to cases under title 11."
This Court is being asked to delve into the domestic relations law of the state of Georgia to determine the rights of two parties, neither of which is the debtor in this chapter 11 case.
There is no doubt that the provisions of 28 U.S.C. § 1471(b) were intended by Congress to significantly expand the jurisdiction exercised by the bankruptcy courts. See S.Rep. No. 989, 95th Cong., 1st Sess. (1978), U.S.Code Cong. & Admin.News 1978, p. 5787; H.R.Rep. No. 595, 95th Cong. 1st Sess. (1977), U.S.Code Cong. & Admin.News 1978, p. 5787. This expanded jurisdiction is designed to facilitate the expeditious administration of a debtor's estate by enabling the bankruptcy court to hear disputes which formerly had to be litigated in other forums. However this grant of jurisdiction is not unlimited.
[C]ertain types of civil proceedings should be held not to be within the jurisdiction of the bankruptcy court, even though the debtor is involved in those proceedings. *196 For example, divorce or child custody matters are so intimately involved with state policies and law, and so tangentially involved with the title 11 case, that they probably are not `related to' the title 11 case."
1 Collier on Bankruptcy (15th Edition) ¶ 3.01, p. 3-46.
It has long been held that the whole subject matter of domestic relations is a matter peculiarly within the province of state law. In Re: Burrus, 136 U.S. 586, 10 S.Ct. 850, 34 L.Ed. 500 (1890); Shiffman v. Askew, 359 F.Supp. 1225 (M.D.Fla.1973) affirmed sub nom. Makres v. Askew, 359 F.Supp. 1225 (M.D.Fla.1973) affirmed sub nom. Makres v. Askew, 500 F.2d 577 (5th Cir. 1974). The United States Supreme Court succinctly delineated the position of the federal courts with regard to domestic relations issues in Barber v. Barber, 21 How. 582, 584, 16 L.Ed. 226 (1859):
"We disclaim altogether any jurisdiction in the courts of the United States upon the subject of divorce, or for the allowance of alimony, either as an original proceeding in chancery or as an incident to divorce a vinculo, or to one from bed and board."
Accordingly, this Court concludes that it does not have subject matter jurisdiction over Kandell's counterclaims.
CONCLUSIONS OF LAW
1. Issues pertaining to domestic relations are matters over which the sovereign states have an overriding concern. For this reason the bankruptcy court does not have jurisdiction to modify a divorce decree. It is therefore
ORDERED that Ekern's "Motion to Dismiss Third Party Defendant's Counterclaim for Want of Subject Matter Jurisdiction" shall be and same is hereby granted; and it is further
ORDERED that Ekern's "Motion to Strike Certain Portions of Defendant's Counterclaim" shall be and same is hereby denied as having been rendered moot by this Court's disposition of the motion to dismiss the third party defendant's counterclaim. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537963/ | 6 B.R. 149 (1980)
In re Jack E. PATTERSON dba Jack E. Patterson Builders dba Jack E. Patterson Construction Co. and Centre of Ohio Plaza-Partnership and Dora J. Patterson, Debtors.
Jack R. JENSEN and D. Ann Jensen, Plaintiffs,
v.
Jack E. PATTERSON et al., Defendants.
Adv. No. 2-80-0290.
United States Bankruptcy Court, S.D. Ohio, E.D.
September 11, 1980.
Mark K. Merkle, Jr., Columbus, Ohio, for plaintiffs.
R.C. Gibbs, Columbus, Ohio, for debtors.
ORDER ON MOTION TO DISMISS AND TO STRIKE JURY DEMAND
G.L. PETTIGREW, Bankruptcy Judge.
In this action, defendants have moved to dismiss paragraphs C and D of plaintiffs' Demand for Judgment for failure of plaintiffs' complaint to state a claim for relief. In addition, they have moved to strike the jury demand endorsed on plaintiffs' complaint. For reasons stated herein, both motions are denied.
Plaintiffs' complaint alleges that defendants Jack and Dora Patterson intentionally obtained money through false pretenses. In addition, they alleged that they defrauded plaintiffs in connection with a real estate transaction. The prayer to the complaint asks for judgment, a determination of non-dischargeability of the debt, $20,000 compensatory damages and $20,000 punitive damages, together with attorneys fees and costs. Endorsed on the complaint is the plaintiffs' jury demand. Defendants contend that the complaint fails to state a claim for relief in which punitive damages and attorneys fees may be awarded. They further contend that plaintiffs' jury demand is insufficient to preserve the right to jury trial on issue so triable and that the complaint contains no allegations which give rise to a right to trial by jury.
Construing the complaint most favorably to the plaintiffs, as is required by defendants' motion, this Court finds that the complaint alleges two claims for relief. The first claim is for nondischargeability of a debt. The second claim is for recovery for defendants' fraudulent conduct.
*150 While defendants properly argue that dischargeability is not an issue on which the plaintiffs have a right to jury trial, they are incorrect in their argument that plaintiffs do not have a right to a jury trial on the issue of fraud. Ohio courts have long recognized the right of a jury trial in an action for damages, based on fraud. § 2311.04 ORC; Chapman v. Lee, 45 Ohio St. 356, 13 N.E. 736 (1887); Taylor v. Brown, 92 Ohio St. 287, 110 N.E. 739 (1915).
Both punitive damages and attorney fees are available to the prevailing plaintiff in an action for fraud and deceit as a part of the judgment under Ohio law in the appropriate situation. Roberts v. Mason, 10 Ohio St. 277 (1859), app. and followed in Saberton v. Greenwald, 146 Ohio St. 414, 66 N.E.2d 224 (1946).
The plaintiffs' right to a jury trial was preserved under 28 U.S.C. § 1480. Rule 409(c) provides for a jury trial and requires only that the plaintiff demand trial by jury on issues triable of right by a jury. Interim Rule 4003 simply carries forward the law which denies a jury trial on the issue of dischargeability of a debt. Further, 4003 only relates to the provisions of 409(a), which specify the applicability of a jury trial in proceedings to determine dischargeability of a debt. No mention is made of fraud actions with regard to that rule.
To further complicate this matter, Local Interim Rule 9001 provides for the form of a jury demand. Specifications of issues are permitted, but are not mandatory. A party is informed that he may specify the issues to be tried by jury or "otherwise he shall be deemed to have demanded trial by jury for all the issues so triable." Rule 9001(b).
Rule 9001(b) is a verbatim statement of Rule 38(c) FRCP. The requirements of FRCP 38 are discussed in 5 Moore's Fed. Practice, 2d Ed., ¶ 38.40, p. 328:
"Pursuant to Rule 38(c), the demand may be as general: as `Plaintiff demands trial by jury in this action' or the demand may specify the issues: as `defendant demands trial by jury of the issues raised by the defendant's counterclaim and plaintiff's reply thereto.'"
The requirements of specificity of issues in a jury demand under Bankruptcy Rule 409(c) seem to conflict with those of Interim Rule 9001. However, in Matter of Copeland, 412 F.Supp. 949 (D.Del.1976), the court deals with the problem of a jury demand that does not specify issues to be tried pursuant to Bankruptcy Rule 409(c):
"Counsel for the debtor also argues that the lack of specificity in the demands for jury trials endorsed upon creditor's applications for determinations of dischargeability render them void. He supports this argument by reference to Bankruptcy Rule 409, which requires that a party `specify the issues which he wishes to be so tried.' The Court declines to find a waiver by the creditor in light of their obvious intention to preserve whatever jury trial right was available at the time when the legal efficacy of this Court's ruling on the applicability of the Dischargeability Act was on Appeal." at 955.
It is clear that the court in Copeland is recognizing a jury demand that may be general in its language, but specific in its request to have issues tried by jury. It is the rationale in Copeland which compels this Court to recognize the plaintiffs' jury demand in this action.
The Bankruptcy Reform Act of 1978 provides for a right to a jury trial under 28 U.S.C. § 1480(a). The plaintiffs properly demanded a jury trial on issues triable by a jury. Defendants contend that by failure to specify the issues to be tried to a jury, the jury demand is defective and should be stricken. That argument cannot be upheld. The right to jury trial is highly regarded in American jurisprudence. The Bankruptcy Reform Act of 1978 codified and preserves the right to a jury trial. Therefore, failure to state the specific issues to be tried by a jury is not a fatal defect which defeats the plaintiffs' right to demand a jury.
Wherefore, the motion to dismiss for failure to state a claim and the motion to strike plaintiffs' jury demand is denied.
IT IS SO ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1538020/ | 210 N.J. Super. 248 (1985)
509 A.2d 316
RICKEY L. MILLER, PLAINTIFF,
v.
HALL BUILDING CORP., DEFENDANT/THIRD PARTY PLAINTIFF,
v.
BEE GEE MASONRY, INC., THIRD PARTY DEFENDANT AND DEFENDANT/THIRD PARTY PLAINTIFF,
v.
RAYMOND INTERNATIONAL, THIRD PARTY DEFENDANT.
Superior Court of New Jersey, Law Division Monmouth County.
Decided December 13, 1985.
*250 Joseph DeDonato, for defendant/third party plaintiff Hall Building Corp. (Morgan, Melhuish, Monahan, Arvidson, Abrutyn & Lisowski, attorneys).
Paul Mancuso, for third party defendant and third party plaintiff Bee Gee Masonry, Inc. (DiRienzo & Ruotolo, attorneys).
MILBERG, A.J.S.C.
Third-party defendant Bee Gee Masonry, Inc. seeks an Order for Summary Judgment on the grounds that defendant Hall Building Corporation's claims for contribution and indemnification are barred by statute and common law.
This action involves a claim for personal injuries sustained by plaintiff Rickey L. Miller on October 20, 1982 when he fell through an open skylight on the roof of a building under construction at the Earle Naval Weapons Station in Colts Neck, New Jersey.
At that time plaintiff was employed as a laborer by Bee Gee Masonry, Inc. Bee Gee had been hired by defendant Hall Building Corporation to perform the masonry work in connection with the construction of the building in question under an agreement executed on March 29, 1982.
Plaintiff brought a worker's compensation claim against Bee Gee and, on July 10, 1984, an Order of Judgment was entered awarding benefits to plaintiff under the Worker's Compensation Act.
On September 10, 1984, plaintiff commenced this action against Hall Building Corporation; Hall, in turn, filed a third-party complaint against Bee Gee asserting claims for contribution, common-law indemnification and contractual indemnification.
*251 Bee Gee now seeks summary judgment dismissing Hall's contribution claim on the ground that it is barred due to plaintiff's recovery of worker's compensation benefits; dismissing the common-law indemnification claim on the ground that Hall was actually liable; and dismissing the claim for contractual indemnification on the ground that the indemnity clause in the contract is unenforceable under N.J.S.A. 2A:40A-1, as that section existed at the time the contract was executed in 1982.
In opposition to the motion, Hall asserts that the indemnity clause is enforceable under N.J.S.A. 2A:40A-1 as it is presently written, and urges that the present section be given retroactive effect.
The facts are not in dispute. The sole question is whether Bee Gee Masonry is entitled to summary judgment as a matter of law.
It is well settled that a defendant in a tort action brought by an employee may not join the employer as a third-party defendant in order to seek contribution from him as a joint tortfeasor. See Public Service Electric & Gas Co. v. Waldroup, 38 N.J. Super. 419, 437 (App.Div. 1955); Arcell v. Ashland Chemical Co., 152 N.J. Super. 471, 483-484 (Law Div. 1977). To allow such a third-party claim would effectively hold the employer liable to the employee for negligence, which is expressly prohibited by the Worker's Compensation Act. Id. at 484.
For the same reason, a third party is not entitled to implied indemnification from the employer, Id. at 488-489 unless there exists a "special legal relationship" between the parties. See Hagen v. Koerner, 64 N.J. Super. 580 (App.Div. 1960). The contractual relationship between the parties is not enough, in itself, to establish the type of relationship from which an implied obligation to indemnify might arise. See Arcell, supra, 152 N.J. Super. at 490.
In any event, it is clear that Hall, as the general contractor, had the primary responsibility for protecting the opening *252 on the roof through which plaintiff fell. See Thomas Moraca, Inc. v. J.B. Burell Company, 423 F.2d 1209 (3d Cir.1970). Accordingly, Hall's liability, if any, would be primary; and it is well settled that indemnity may not be obtained by a party who has been at fault, absent an express indemnification agreement. Id.; see Cartel Capital Corp. v. Fireco of New Jersey, 81 N.J. 548, 566 (1980); Public Service Electric & Gas Co., supra, 38 N.J. Super. at 432.
What remains, then, is the express indemnification clause in the contract between Hall Building and Bee Gee Masonry. The clause provides that Bee Gee:
agrees to indemnify and save harmless the ... general contractor ... against loss or expense by reason of the liability imposed by law upon ... general contractor ... for damage because of bodily injuries ... accidentally sustained by a person . .. arising out of or on account of or in consequence of the performance of this Contract, whether or not such injuries to persons ... are due or claimed to be due to any negligence of the subcontractor....
At the time the contract was executed, N.J.S.A. 2A:40A-1 provided that "a ... promise ... relative to the construction... of a building ... purporting to indemnify or hold harmless the promisee against liability for damages arising out of bodily injury to persons or damage to property is against public policy and is void and unenforceable." The effect of this provision, enacted by L. 1981, c., 317, was to invalidate all hold harmless or indemnification clauses in construction contracts as against public policy. It is undisputed that the subject indemnity clause would be unenforceable under former Section 2A:40A-1.
However, the present section, as amended by L. 1983, c. 107 § 1 (eff. March 14, 1983), prohibits only those indemnification clauses which purport to indemnify for "the sole negligence of the promisee." Under the section as amended, therefore, the parties' indemnity clause clearly would be enforceable.
The issue, then, is whether the present Section 2A:40A-1 should be given retroactive effect, as Hall Building urges. No reported decision has addressed this question.
*253 The general rule of statutory construction favors the prospective application of statutes. Gibbons v. Gibbons, 86 N.J. 515, 521 (1981). There are, however, three exceptions which permit retroactive application of statutes or their amendments: (1) where the Legislature has expressly or implicitly indicated that the statute be applied retroactively, Id. at 522; (2) where the statute is ameliorative or curative, Id. at 523; and (3) in the absence of legislative intent that the statute is limited to prospective application, where such considerations as the expectations of the parties warrant retroactive applications, Id. See Communications Workers v. Public Employment Relations Commission, 193 N.J. Super. 658, 663-664 (App.Div. 1984).
Here, there is no expression of legislative intent that the amended statute be limited to prospective application. Rather, the legislative history demonstrates that the amendment was intended to improve the statutory scheme in existence and, indeed, to clarify the purpose behind the original enactment:
This bill amends a recently-enacted law, P.L. 1981, c. 317, which prohibits hold harmless clauses in construction contracts which indemnify the promisee for any damages regardless of the extent of his negligence. For example, an agreement between a property owner and a general contractor under the terms of which the general contractor agrees to hold the owner harmless from any and all liability as a result of the negligence or wrongdoing of the general contractor and/or the latter's subcontractors, is under the law against public policy and is void and unenforceable. It is the contention of Assembly Bill No. 590 that the present law as originally conceived was nothing more than prohibition to prevent indemnification against one's own negligence. However, as a result of Senate committee amendments to the original bill, certain conventional and proper hold-harmless clauses were prohibited.
* * * * * * * *
By way of background, the reason for these amendments follows: It has been a well settled principle, determined by the courts of this State, that there is no essential public policy impediment to certain hold harmless agreements. The principle derives from recognition that, ordinarily, the responsibility for risk of injury is shifted by the primary parties to insurance carriers, and the parties should be left to determine how the insurance burdens shall be distributed. In effect, it is an allocation of costs which, in practice, finds its way into the contract price.
*254 Assembly Judiciary, Law, Public Safety and Defense Committee Statement to Assembly, No. 590 of 1983 (emphasis supplied).
Hence, the new section falls, at least, under one of the three exceptions outlined in Gibbons v. Gibbons, supra it is an ameliorative or curative enactment. As counsel for Hall Building correctly notes, the amended section actually mirrors the language of the Assembly Bill behind the original 1981 enactment. The new section merely resurrects the language deleted by the Senate in enacting former Section 2A:40A-1 and thereby restores conventional indemnity and "hold harmless" agreements to their former validity.
Additionally, retroactive application of the new section is warranted by the expectations of parties in a commercial setting that they are free to negotiate the allocation of tort liability, which allocation finds its way into the contract price. See Statement to Assembly, No. 590, supra; Ramos v. Browning Ferris Industries, 194 N.J. Super. 96, 101 (App.Div. 1984). Such was the case here. The indemnity clause was fully negotiated and was included in the contract price.
It cannot be seriously contended by Bee Gee that retroactive application of the amended section will work a "manifest injustice," see Gibbons v. Gibbons, supra, 86 N.J. at 523. Surely, there was no reliance by either party on the illegality of the clause at the time the contract was made. There appears to have been ignorance of the provisions of former Section 2A:40A-1 on both sides of the agreement. Thus, retroactive application of the amended section in this case merely fulfills the bargained-for expectations of the parties.
Accordingly, I find that present Section 2A:40A-1 applies retroactively in this case and that the subject indemnity clause is therefore valid and enforceable.[1]
*255 Bee Gee Masonry's motion for summary judgment on the issue of contractual indemnity is denied. However, partial summary judgment in favor of Bee Gee on the issues of joint-tortfeasor contribution and implied indemnity is granted.
Counsel for Hall Building will submit a proposed order in accordance with this opinion.
NOTES
[1] At oral argument, counsel for Bee Gee Masonry cited Peper v. Princeton University Board of Trustees, 77 N.J. 55 (1978), as being supportive of the position that the amended anti-indemnity statute should not be given retroactive effect. In that case, the Supreme Court held that the New Jersey Law Against Discrimination did not apply to private universities in their capacity as employers prior to its amendment in June 1977. The case was merely one of statutory interpretation. The issue of retroactive application was not squarely before the Court; yet the Court did note the general rule favoring prospective application of statutes. In any event, Peper predates Gibbons v. Gibbons, supra, wherein the Court clarified the exceptions to the general rule of statutory construction. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1538024/ | 353 Pa. Superior Ct. 108 (1986)
509 A.2d 358
Carroll R. BOSWELL, Appellee at No. 892 PGH 85, Appellant at No. 943 PGH 85,
v.
SOUTH CAROLINA INSURANCE COMPANY, and the Travelers Insurance Company, Appellee at No. 943 PGH 85.
Appeal of SOUTH CAROLINA INSURANCE COMPANY, Appellant at No. 892 PGH 85.
Supreme Court of Pennsylvania.
Submitted January 15, 1986.
Filed May 5, 1986.
*111 Gilbert M. Coogler, Beaver, for appellant (at 892) and appellee (at 943).
James Cole, Pittsburgh, for appellant (at 943) and appellee (at 892).
Philip A. Faix, Jr., Pittsburgh, for Travelers, appellee.
Before CAVANAUGH, OLSZEWSKI and KELLY, JJ.
KELLY, Judge:
This appeal is from an Order of the Court of Common Pleas of Allegheny County in an action for recovery of lost wages under the Pennsylvania No-Fault Motor Vehicle Insurance Act, 40 P.S. § 1009.101 et seq. (herein after the No-Fault Act) entered in favor of plaintiff/appellee Carroll R. Boswell and defendant/appellee The Travelers Insurance Company (herein after Travelers) and against defendant/appellant South Carolina Insurance Company (herein after appellant). Appellee Boswell seeks recovery from appellant, or in the alternative, from Travelers, of the amount of his wage loss resulting from his accident and injury sustained July 1, 1982 not reimbursed by his employer, the Federal Government. We affirm the lower court order for the reasons discussed below. The facts are as follows:
Carroll R. Boswell suffered injuries on July 1, 1982 in a motor vehicle accident which occurred in Pennsylvania while in the course of his employment as a U.S. Postal employee. Boswell at this time did not own an auto. Plaintiff's son, Carroll L. Boswell (herein after son), a member of the U.S. Army, did own a car, which at the time of the accident was insured by appellant. Appellee's son was stationed in Korea at the time of the accident; prior to service in Korea, he had been stationed at Fort Bragg, North Carolina.
*112 Son acquired his car while stationed in North Carolina and had purchased insurance for the car, listing the principal garage for the car as the 21st MP Company, Fort Bragg, North Carolina. When the son was reassigned to duty in Korea, he notified Peggy Norton, agent for appellant insurance company, of his new assignment and of the fact that he would be garaging the car at his father's home in Pittsburgh, Pennsylvania. Appellant's agents changed the son's policy to reflect the new principal garage for the car.
A brief trial was held on March 20, 1985, and certain exhibits, depositions, transcripts and stipulations were entered into the record.[1] The Honorable I. Martin Wekselman entered a non-jury verdict in favor of Boswell, and in favor of Travelers and against appellant. Appellant filed timely post-trial motions; Boswell filed timely motions to protect his claim against Travelers.
Section 204 of the No-Fault Act delineates the basic procedure for victims seeking compensation for injuries sustained in the course of their employment. The victim must first seek basic loss benefits from his employer, then from his personal automobile insurance carrier, if any, then from any automobile insurance carriers covering members of his household, and finally from the Pennsylvania Assigned Claims Plan. In this case the state claims plan designated Travelers as its insurance carrier.
Appellee recovered all his medical no-fault benefits from his employer, the U.S. Postal Service, and two-thirds (2/3) of his wage loss from the U.S. Department of Labor, the federal workmen's compensation equivalent. Since we find that the appellee was covered by the automobile insurance carrier of a member of his household, we find no need to hold Travelers liable as designated carrier under the Pennsylvania Assigned Claims Plan. Therefore, on this issue, we affirm the trial court decision.
*113 Appellant raises two issues on appeal: whether the trial court erred in refusing to give effect to pertinent sections of the policy "providing coverage for an out-of-state automobile accident only if the accident occurs in a state other than the state in which the covered automobile is principally garaged"; and whether the trial court misapprehended Pennsylvania law by finding appellee's son was "in residence" in his father's Pittsburgh home at the time of the accident. (Appellant's brief at 7).
Appellant argues that the policy issued to appellee Boswell "does not provide coverage in the situation in this case where the accident has occurred outside of the state in which the policy was written, but in the same state (Pennsylvania) where the automobile is principally garaged. . . . An automobile insured in one state but principally garaged in another state at all times does not present an insurable risk." (Appellant's brief at 8.) Appellant refers the court to page three (3) of the insurance policy in support of its contention.
An examination of the policy and the "Out of State Coverage" section beginning on page 3 reveals the following:
OUT OF STATE COVERAGE If an auto accident to which this policy applies occurs in any state or province other than the one in which your covered auto is principally garaged, we will interpret your policy for that accident as follows:
If the state or province has:
1. A financial responsibility or similar law specifying limits of liability for bodily injury or property damage higher than the limit shown in the Declarations, your policy will provide the higher specified limit.
2. A compulsory insurance or similar law requiring a nonresident to maintain insurance whenever the non-resident uses a vehicle in that state or province, your policy will provide at least the required minimum amounts and types of coverage.
*114 No one will be entitled to duplicate payments for the same elements of loss. (N.T. 228a).
There is no exception listed for automobiles garaged outside of the state where the policy was written.[2] In fact, careful perusal shows that no such exception is expressed anywhere within the policy.
Since the language of the contract does not express such a reservation as appellant claims, our concern on review must be limited to a determination of whether Pennsylvania is the state or province where the auto was principally garaged, whether the policy period was still in force at the time of the accident and whether the accident occurred within the United States, Canada or the Virgin Islands. If so, the policy applies, and appellant is liable.
After reviewing the record, we must answer all three questions in the affirmative. The named insured, appellee's son, gave notice to his insurance agent that there was a change in address of the principal garage of his car. According to uncontroverted testimony the appellant's agent not only had notice that the car was being relocated to Pittsburgh, Pennsylvania, but orally agreed to the relocation. The record also discloses that the agent had the Declaration Page of the policy changed to reflect the new address for the auto's principal garage. (N.T. 223a). The agent assured the named insured that the car would continue to be covered until the policy expiration date in April 1983. (N.T. 6/23/83, 43a). Thus, we find evidence to affirm the trial court finding that the car was principally garaged in Pennsylvania, as agreed to by appellant, that the policy was in effect at the time of the accident in July 1982, and as was stated, infra, that the accident did occur within the United States. As no exceptions exist to bar coverage, we find that appellant insurance company is liable on its policy.
*115 Appellant argues in the alternative that even if we find the policy adequate security for the automobile, we should give full effect to the policy provisions limiting coverage of auto accidents occurring in no-fault jurisdictions. (Appellant's brief at 9). That provision is contained in the "Out of State Coverage" section, as discussed above. We have already decided that the plain language of the contract when applied to this fact situation discloses the accident did not occur out of the state where the auto was principally garaged, but occurred in Pennsylvania where the auto was garaged. Therefore, we find appellant's argument to be without merit. (See, Talley by Cronin, Jr. v. Commercial Union Insurance Company, 587 F.Supp. 976, aff'd 760 F.2d 261 (E.D.Pa. 1984), (out of state coverage provision does not apply where victim, car's principal garage and accident all occur in Pennsylvania).
Appellant's second issue on appeal is whether appellee's son, Carroll L. Boswell, was "in residence" in Pennsylvania, so as to provide coverage to his father under the terms of the Act.
The No-Fault Act, 40 P.S. § 1009.103, defines "insured" as follows:
(A) an individual identified by name as an insured in a contract of basic loss insurance complying with this act; and
(B) a spouse or other relative of a named insured, and a minor in the custody of a relative of a named insured if. . .
(ii) in residence in the same household with a named insured.
An individual is in residence in the same household if he usually makes his home in the same family unit, even though he temporarily lives elsewhere.
Thus, the appellee's son, as the named insured, provides coverage for his father if appellee is a relative in residence in the same household with his son.
"Household" has been defined as "those who dwell under the same roof and compose a family." Drake v. Donegal *116 Mutual Insurance Co., 422 F.Supp. 272 (W.D.Pa. 1976), relying on Webster's Dictionary, 2d ed. Similarly, the court in Colosimo v. State Automobile Mutual Insurance Co., 9 D. & C.3d 438 (1979), relied on Webster's to define "relative" as one "connected by blood or marriage." Appellee is clearly a relative (of his son), and is a member of the same family. It remains to be determined if the two "dwell under the same roof" or are "in residence" together.
Appellant argues that despite the definition the Act provides, the definition of "in residence" should be read in accordance with the prior common law holdings defining "resident" and/or "domiciliary". An historic legal distinction divides the two terms and they are not interchangeable. DuPuy's Estate, 373 Pa. 423, 427, 96 A.2d 318, 319-20 (1953). Domicile is "the place where a person has his true, fixed, permanent home and principal establishment." McKenna v. McKenna, 282 Pa.Super. 45, 48, 422 A.2d 668, 669 (1980). Even if the person cannot state an intention to abide in that place permanently, "the domicile of a person is the place where he has voluntarily fixed his habitation with a present intent to make it either his permanent home or his home for the indefinite future." In re Estate of McKinley, 461 Pa. 731, 734, 337 A.2d 851, 853 (1975). The distinction is that while residence is a physical fact, domicile is a matter of intention. Laird v. Laird, 279 Pa.Super. 517, 520, 421 A.2d 319, 321 (1980).
By comparing the common law definitions with the statute, it becomes obvious that the meaning the legislature conferred upon the term "in residence" bears less resemblance to the common law term "residence" than it does to "domicile". Neither domicile nor Section 103 of the No-Fault Act require physical presence, and both imply an intent to return to one habitation after temporary absences. Thus, appellant's contention that we read "in residence" as equivalent to residency is not consistent with the logical inferences of the legislatures' own language. An examination of the legislative history of the No-Fault Act discloses that the definition of "insured" in Section 103 was lifted *117 verbatim from the proposed National No-Fault Motor Vehicle Insurance Act, S. 354, 93rd Cong., 2d Sess., May 1, 1974. Subsection (A), defining the named insured, was rewritten, but subsection (B), defining unnamed insured persons, including relatives "in residence", was never amended. The definitional section was never subject to debate, but it is clear from the final debate on the Act as a whole that the Act was "a scissors and paste bill which has been taken, to a substantial extent, from the legislation pending in the national Congress. It has been put together in a hazardous fashion". Senator Ammerman, Senate Consideration of Calendar H.B. 1973 (Pr. 3495). The National Conference of Commissioners of U.S. Laws similarly drafted a Uniform Motor Vehicle Accident Reparations Act, August 4-11, 1972. Their definition of "person residing in the same household" is identical both to the national proposed act and the Pennsylvania Act. Their Comment states:
The parts of the definition which refer to a "relative" of a named insured are adapted from automobile policies. The term includes relatives by marriage as well as blood relatives. No attempt, however, is made to spell out the myriad details of consanguinity, affinity, and adoption which qualify one as a relative.
.....
The last sentence, dealing with the family members who temporarily live elsewhere, covers such situations as the college student residing away from home during the school year.
We find no practical difference between students temporarily living away from home, and military personnel, serving their country, who are on assigned duty away from home.
From the information the legislature utilized in drafting the Act, it seems the legislature intended its language to be interpreted as would similar legislation being drafted contemporaneously to the Act. We must conclude that the legislature had no intent to make its definitions synonymous *118 with common law terminology.[3] Therefore, we reject appellant's interpretation of the Act.
The determination of appellee's residency status for purposes of the Act constitutes a mixed question of law and fact and, therefore, the trial court's finding is reviewable by this court. Stambaugh v. Stambaugh, 458 Pa. 147 at 151-2, 329 A.2d 483, at 486 (1974); Watson v. Watson, 243 Pa.Super. 23, 364 A.2d 431 (1976). A court must consider objective factors besides an individual's assertion of domiciliary intent when making its determination. Shishko v. State Farm Ins., 553 F.Supp. 308, aff'd 722 F.2d 734 (E.D.Pa. 1982). We find after review of the record that the trial judge was apprised of the following facts:
Appellee's son, while in the army, maintained his own bedroom in the family residence in Pittsburgh and kept possessions there. (N.T. 6/28/83, 41a).
Each time the son was given leave he returned to his father's Pittsburgh home. (N.T. 6/28/83, 27-28a).
Son was registered to vote in Pennsylvania and did not re-register to vote in North Carolina. (N.T. 6/28/83, 34a). While in the service Boswell did not maintain or establish his own habitation but was stationed and lived on base in the barracks. (N.T. 6/28/83, 360-7a).
After his return from service in Korea he again lived in barracks. (N.T. 6/28/83, 41a).
Son chose to garage his car in Pittsburgh rather than leave it at Fort Bragg.
Only one other court in this Commonwealth has examined a fact situation where the issue was whether a relative, enrolled in the military, was a relative "in residence" for purposes of the No-Fault Act. In Heusle v. National Mutual Insurance Company, 479 F.Supp. 274, aff'd, 628 *119 F.2d 883 (W.D.Pa. 1979), the plaintiff, while on leave from active duty and living with her parents, was injured in an auto accident. The court found plaintiff to be a member of her family household "in residence" at the time of the accident. Appellants would have us distinguish Heusle factually, because in Heusle the plaintiff was physically present in the household, while in this case the named insured son was absent on duty in Korea. To distinguish the cases in such a manner would be to ignore the language of the statute, which clearly does not require either the named or unnamed insured to be physically present in the household at the time of accident. The statute merely requires the unnamed insurance claimant to usually be "in residence" in the household.
For instance, in Miller v. USF & G Company, 28 D. & C.3d 389 (1983), the unnamed insured was the minor son of divorced parents and was found to be "in residence" in the households of both parents even though he physically was living with his mother at the time of the accident. The court found that the minor son was covered by his father's policy, finding no need of physical presence for compliance with the statutory provisions of Section 103.
Although we do not accept as binding the common law definition of residency, we do find persuasive the reasoning utilized in various cases which have explored the issue of the residency status of persons enlisted in the military service. A service person's domicile generally remains unchanged while that person is temporarily stationed in another state on active duty. Wallace v. Wallace, 371 Pa. 404, 89 A.2d 769 (1952). A service person's domicile is presumed to be the domicile as of his time of enlistment. Turek v. Lane, 317 F.Supp. 349 (E.D.Pa. 1970). Military persons have no choice in habitation, hence in domicile, except where permitted to live off-post. Sage v. Sage, 11 Cumberland L.J. 108 (1960). But military personnel may acquire a new domicile if circumstances show an intent to abandon the original and adopt a new domicile. Zinn v. Zinn, 327 Pa.Super. 128, 475 A.2d 132 (1984).
*120 The only act appellee's son engaged in while in North Carolina which would arguably imply domiciliary intent was the purchase of automobile insurance and the listing of the principal place of garaging the car as the Fort Bragg barracks, North Carolina. This sole act is not sufficient indicia either of domiciliary intent or of intent to abandon his Pittsburgh family "residence" as residence is defined in the Act. Therefore, we uphold the trial court and find appellee was "in residence" with his temporarily absent son in the Pittsburgh household.
We thus affirm the trial court holdings on both issues presented to us for review.
NOTES
[1] Both defendants have stipulated that plaintiff is entitled to the maximum amount of allowable wage loss under Pa. No-Fault Motor Vehicle Insurance Act, plus interest.
[2] The accident did occur in Pennsylvania which does have: "2. A compulsory insurance or similar law . . ." But since we find, infra, that the accident did not occur out of the state where the covered auto was principally garaged this section does not apply.
[3] Several years ago, referring to the word as used in another statute, Judge Goodrich used the following apt language: ". . . The words `resident' and `residence' have no precise legal meaning although they are favorite words of legislators. Sometimes they mean domicile plus physical presence; sometimes they mean domicile; sometimes they mean something less than domicile." Willenbrock v. Rogers, 255 F.2d 236, 237 (3rd Cir. 1958). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1538025/ | 6 B.R. 89 (1980)
In re Philip Albert DeSIMONE, Debtor.
Bankruptcy No. 80 B 20152.
United States Bankruptcy Court, S.D. New York.
August 28, 1980.
*90 S. Andrew Schaffer, New York City, for New York University.
Regan, Goldfarb, Heller, Wetzler & Quinn, New York City, for New York State Higher Ed. Service Corp.; Thomas A. Holman, New York City, of counsel.
Jeffrey L. Sapir, Yonkers, N.Y., Standing Trustee.
Legal Clinic of Sieck and Zelinka, New York City, for debtor.
DECISION ON OBJECTIONS TO CONFIRMATION OF DEBTOR'S PLAN FILED BY NEW YORK UNIVERSITY, NEW YORK STATE HIGHER EDUCATION SERVICES CORPORATION AND THE STANDING TRUSTEE.
HOWARD SCHWARTZBERG, Bankruptcy Judge.
Last year this debtor invoked the blessing of dischargeability under the now repealed Bankruptcy Act of 1898 so as to obtain a discharge of all of his obligations other than student loans, which are nondischargeable under 20 U.S.C. § 1087-3. Now this debtor seeks to be twice blessed by offering to pay $360 over a 36 month period towards his only listed obligations, the previously undischarged student loans of $23,370.05, pursuant to a plan filed under Chapter 13 of the Bankruptcy Reform Act of 1978.
This controversy arises as a result of the objections to confirmation of the debtor's proposed Chapter 13 plan filed by New York University, New York State Higher Education Services Corporation, and the Chapter 13 standing trustee.
New York University, an unsecured creditor, contends: (1) Congress never intended that debts which are nondischargeable under § 523(a) of the Bankruptcy Code be dischargeable under Chapter 13; (2) The debtor's plan was not proposed in good faith; (3) The debtor will be unable to comply with the payment terms of the plan; (4) The Court should require that educational loans be treated as long term debts and hence nondischargeable.
New York State Higher Education Services Corporation, another unsecured creditor, argues: (1) The proposed plan does not satisfy the confirmation standard of § 1325(a)(4) of the Bankruptcy Code because the value of the property to be distributed under the plan on account of each allowed unsecured claim is less than the amount that would be paid on such claim if the estate of the debtor were liquidated under Chapter 7; (2) The plan was not proposed in good faith.
The Chapter 13 standing trustee asserts: (1) A 1% payment plan to unsecured creditors in full satisfaction of their claims which would otherwise be nondischargeable under § 523(a)(8) of the Bankruptcy Code is not within the good faith standard of § 1325(a)(3) of the Bankruptcy Code; (2) The proposed plan does not satisfy the "best interest" test of § 1325(a)(4); (3) The debtor will not be able to make all payments under the plan.
FACTS
1. The debtor, Philip Albert DeSimone, filed his petition under Chapter 13 of the Bankruptcy Code, 11 U.S.C. § 1301 et seq., on April 22, 1980.
2. The obligations listed in the debtor's petition are solely unsecured debts for student loans. The debtor has listed student loans from New York State Higher Education Services Corporation in the amount of $18,112 and from New York University in the amount of $2491.13. The total indebtedness listed is $23,370.05.
*91 3. The debtor proposes to pay to unsecured creditors under the plan $10 per month for 36 months resulting in payment of approximately 1½% of the listed unsecured debt.
4. The debtor attended New York University and obtained a Bachelor of Arts degree in 1969. The debtor thereafter attended the Harvard University Graduate School of Arts and Sciences from 1969 to 1971. From 1974 through 1976 the debtor attended the Columbia University School of General Studies as a pre-medical student. The debtor spent two years at Albert Einstein Medical College but did not receive a degree. Beginning in November, 1979 the debtor has worked as a researcher for the Medical News Service where he earns $250 per month. The debtor also receives social security payments in the amount of $136.24 for a medical disability.
5. The debtor's budget lists his total monthly income as $386.24 and his average future monthly expenses as $375. The debtor's schedule of expenses lists rent at $80 per month. However, the debtor testified that his rent was actually $380 per month towards which his family gives him $300 per month. The debtor's excess of estimated future monthly income over estimated future expenses is $11.24.
6. On September 26, 1979 the debtor was adjudicated a bankrupt under the now repealed Bankruptcy Act of 1898. The debtor received his discharge on November 28, 1979. However, the student loans scheduled by the debtor were not discharged pursuant to 20 U.S.C. § 1087-3.
DISCUSSION
It should first be noted that the six year bar to successive discharges does not apply in cases commenced under Chapter 13 of the Bankruptcy Code and that the debtor's November, 1979 discharge is not a bar to confirmation of the Chapter 13 plan. In re Ciotta, 4 B.R. 253, 6 Bankr.Ct.Dec. 346 (Bkrtcy.E.D.N.Y.1980).
Although the objecting parties have raised serious questions regarding the confirmation of this Chapter 13 plan, this court will apply the reasoning expressed in its decision in In re Seman, 4 B.R. 568, CCH Bank.Law Rep., ¶ 67,455 (Bkrtcy.S.D.N.Y. 1980) on the ground that the proposed plan should be rejected for cause, pursuant to Code § 1307(c) because a repayment of $360 towards a $23,370.05 nondischargeable indebtedness previously listed in the petition filed under the former Bankruptcy Act is contrary to the statutory scheme and legislative history with respect to Chapter 13.
The 1½% payments under the proposed plan are de minimis and insulting to the student loan creditors and are tantamount to the zero plans generally rejected by the courts. See In re Webb, 3 B.R. 61, 5 Bankr. Ct.Dec. 1379 (Bkrtcy.N.D.Cal. 1980). This court previously dismissed a zero plan for cause in In re Seman, supra, stating:
"[A] zero plan should be rejected for cause because Congress did not intend that zero plans should be confirmed. Since the entire statutory scheme and the legislative history with respect to Chapter 13 reflect an intention to encourage more debtors to repay their debts over an extended period, a zero payment must be regarded as inconsistent with such statutory design."
In this case the debtor is seeking to use the provisions of Chapter 13, specifically § 1328(a)(2) of the Code, to discharge the student loan obligations made nondischargeable by 20 U.S.C. § 1087-3 as applied to the Bankruptcy Act of 1898. Confirmation is sought as a result of literal compliance with the requirements of Code § 1325(a)(1), (6).
Section 1325(a)(1) of the Bankruptcy Code states:
"The court shall confirm a plan if-(1) the plan complies with the provisions of this chapter and with other applicable provisions of this title. . . . "
Accordingly the court may look to Code § 1307(c) for guidance as to when a Chapter 13 case should be dismissed. That section states:
"(c) Except as provided in subsection (e) of this section, on request of a party in *92 interest and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 7 of this title, or may dismiss a case under this chapter, whichever is in the best interest of creditors and the estate, for cause. . . ." [Emphasis added] 11 U.S.C. § 1307(c).
The debtor argues that "a failure to confirm this plan would necessarily and unfortunately cause this court to enter the "quantitative thicket" it so skillfully avoided in Seman" and that "[t]he unfortunate result of taking that path would be to contribute to the already growing uncertainty as to what is not an appropriate repayment sum." This argument cannot be accepted in light of the legislative history surrounding Chapter 13. The House Report states:
"The purpose of Chapter 13 is to enable an individual, under court supervision and protection, to develop and perform under a plan for repayment of his debts over an extended period."
H.R.Rep.No.95-595, 95th Cong., 1st Sess. (1977) 118 U.S.Code Cong. & Admin. News 1978, pp. 5787, 6079. In addition, the Senate Report states:
"Chapter 13 is designed to serve as a flexible vehicle for the repayment of part or all of the allowed claims of the debtor."
S.Rep.No.95-989, 95th Cong., 2d Sess. (1978) 141, U.S.Code Cong. & Admin. News 1978, pp. 5787, 5927.
In the Seman case, supra, this court refused to apply a quantitative analysis in connection with the term "good faith" as expressed in Code § 1325(a)(3) because this court did not believe that "good faith" should be equated with the concept of "best effort", especially since "best effort" was not expressed as a standard for confirmation. Instead, this court concluded in Seman, supra that a zero plan or a disguised liquidation plan, was not consistent with the statutory design for meaningful payments contemplated under Chapter 13. Accordingly, this court held that it may dismiss or convert a Chapter 13 plan for cause as authorized under Code § 1307(c), when such plan contravenes the legislative purpose underlying Chapter 13. Thus, while a quantitative analysis is not appropriated in determining "good faith", such analysis is germane to the question as to whether meaningful repayment is offered so as to escape a dismissal or conversion of a Chapter 13 plan for cause.
In modifying the Bankruptcy court's requirement of a 70% repayment plan in In re Burrell, 2 B.R. 650, 5 B.C.D. 1321 (Bkrtcy.N. D.Cal. 1980), the District Court concluded that while an inflexible rule of 70% repayment was arbitrary a Bankruptcy Court must nevertheless exercise its discretion in determining "whether his plan proposes to make meaningful payments to unsecured creditors." In re Burrell, Dist.Ct. N.D.Cal. (Aug. 19, 1980, Ingram, D.J.), Judge Ingram went on to say:
"If Congress had intended to abolish the substantiality requirement, it could have done so unambiguously. Because it did not, this Court must conclude that no change was intended."
Having concluded that the objecting parties in interest have shown sufficient cause for rejecting the de minimis payment plan with respect to the student loan creditors, whose claims were nondischargeable in the debtor's previous Bankruptcy Act case, it follows that the petition in this case should be dismissed.
The dismissal of this case is without prejudice to any application the debtor might subsequently make with regard to dischargeability of these obligations as an undue hardship under 20 U.S.C. § 1087-3(a).
Submit order on notice. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1538569/ | 169 Conn. 29 (1975)
META KUKANSKIS
v.
STANLEY JASUT, ADMINISTRATOR (ESTATE OF JOHN SKUCAS)
Supreme Court of Connecticut.
Argued December 3, 1974.
Decision released July 1, 1975.
HOUSE, C. J., LOISELLE, MACDONALD, BOGDANSKI and LONGO, JS.
*30 Fred B. Rosnick, with whom, on the brief, was Frederick W. Krug, for the appellant (defendant).
Thomas L. Brayton, for the appellee (plaintiff).
LONGO, J.
This appeal arises from a declaratory judgment rendered by a trial referee, acting as a court, finding that the plaintiff owned two bank accounts which were given to her by the decedent.
I
As a preliminary matter but after oral argument of the appeal, the defendant moved this court to dismiss the entire action, contending that the Superior Court lacked jurisdiction because the *31 plaintiff did not join as parties, as required by Practice Book § 309,[1] the defendant's brother, John Jasut, an heir, and the Society for Savings, a bank which held one of the accounts in question. We postponed decision on the motion to dismiss so that we might consider it during discussion on the merits of the appeal. However, Practice Book § 53 provides, in relevant part: "An executor, administrator... may sue or be sued without joining the persons represented by him and beneficially interested in the suit." See General Statutes § 52-106. The finding indicates that Stanley and John Jasut are the only persons who have an interest in the outcome of this case.[2] It appears, however, that both the bank and John Jasut had actual notice, John Jasut having been present during the hearings and the assistant manager of the Society for Savings having testified at them. In keeping with the practice of interpreting provisions of statutes or rules harmoniously, the requirements of Practice Book §§ 53 and 309 are to be read to require notice to all interested parties, but not necessarily joinder, where there is a declaratory judgment action in which an executor or administrator sues or is sued. The defendant's motion to dismiss is denied.
II
In the main body of the appeal, the defendant attacks the findings of fact and the conclusions of *32 law as being insufficient or inconsistent with the judgment, claims that the judgment varied totally from the pleadings, and challenges rulings on evidence and the refusal of the referee to grant his motion for arrest of judgment.
The trial referee concluded that the decedent made valid gifts to the plaintiff of two of the three bank accounts in issue. It is incumbent upon a person pressing a claim against a decedent's estate to prove such a claim by clear and satisfactory proof. Flynn v. Hinsley, 142 Conn. 257, 262, 113 A.2d 351. Whether the conclusion is correct is tested by the finding and it must stand unless it is legally or logically inconsistent with the facts found or unless it involves the application of some erroneous rule of law material to the case. Hall v. Weston, 167 Conn. 49, 60, 355 A.2d 79; Johnston Jewels, Ltd. v. Leonard, 156 Conn. 75, 79, 239 A.2d 500.
The defendant, however, has made a wholesale attack on the findings of fact, claiming that facts were found without sufficient evidence, and complaining of the refusal of the trial court to incorporate certain draft findings. See Cecio Bros., Inc. v. Feldmann, 161 Conn. 265, 268, 287 A.2d 374. Most of the findings attacked and draft findings rejected relate to the credibility of witnesses and are not material and relevant to the cause of action. Hyatt v. Zoning Board of Appeals, 163 Conn. 379, 381, 311 A.2d 77; American Brass Co. v. Ansonia Brass Workers' Union, 140 Conn. 457, 459, 101 A.2d 291; Maltbie, Conn. App. Proc. § 157. It is the trial court which had an opportunity to observe the demeanor of the witnesses and parties; thus, it is best able to judge the credibility of the witnesses and to draw *33 necessary inferences therefrom. Collens v. New Canaan Water Co., 155 Conn. 477, 486, 234 A.2d 825; Krattenstein v. G. Fox & Co., 155 Conn. 609, 611, 236 A.2d 466.
The defendant's numerous attacks on the findings of fact are tested by the evidence printed in the appendices to the briefs. Practice Book § 718. See, e.g., Stoner v. Stoner, 163 Conn. 345, 348, 307 A.2d 146; Branford Sewer Authority v. Williams, 159 Conn. 421, 425, 270 A.2d 546. From those findings, which were not attacked or which were supported in the appendices to the briefs, the referee correctly found: Shortly after Thanksgiving in November of 1967, John Skucas visited Meta Kukanskis and Peter Kukanskis for lunch. Sometime right after lunch, in the presence of the plaintiff's husband, John Skucas said, "I give Mrs. Kukanskis a present. There is three books for you and you never had such a present in your life. Even your father never gave you a present like this." At the time when he handed and delivered the bankbooks to Meta Kukanskis he took them from his pocket and handed her each of the books separately. He first handed and delivered to her the Waterbury Savings Bank book number 73141, and Meta Kukanskis recited the word "thirty" and John Skucas said "thirty thousand dollars." The last entry in the Waterbury Savings Bank book, on October 4, 1967, was $30,765.48. John Skucas then handed and delivered to Meta Kukanskis a bankbook from the Society for Savings, number 16543407, and he expressed the words "seventeen" or "eighteen," and she then looked in the book and said "eighteen thousand dollars." The last entry in the Society for Savings Bank book, dated April 6, 1964, was in the total amount of $18,772.92. John Skucas then handed *34 and delivered to Meta Kukanskis the Colonial Bank and Trust Company Savings Account Statement holder account number XXXXXXX. He knew that the Colonial Bank and Trust Company did not give a bankbook, but indicated that she was to get the money that was represented in that account. At the time John Skucas handed and delivered the bankbooks to Meta Kukanskis, he declared orally his present intention to pass title in the ownership of the savings deposits represented by said books by using the words "present" and "gift." When John Skucas gave and delivered the bankbooks to Meta Kukanskis he said they were for her. There was the distinct impression given by John Skucas to Meta Kukanskis that when he gave these books to her separately, she was immediately to have all the money represented by these books and the savings deposits. It was John Skucas' intent that the ownership of all the money on deposit represented by the books should be that of Meta Kukanskis, and he never made a claim after giving the books that they were his, up to and including the time of his death.
To constitute a valid gift inter vivos of personal property, there must be not only a delivery of possession of the property but also an intent on the part of the donor that title shall pass immediately. Guinan's Appeal, 70 Conn. 342, 347, 39 A. 482. In determining the intent, the time when the use or the enjoyment of the property comes to the other party is not conclusive of the issue. A gift may be valid even though the original owner's intent is to postpone the enjoyment of the property to a future date. Halisey v. Howard, 148 Conn. 466, 469, 172 A.2d 379. The question whether in delivering the bankbooks it was the intention of the claimed donor immediately to transfer title to the bank accounts *35 is one of fact for the determination of the trier. Bachmann v. Reardon, 138 Conn. 665, 667, 88 A.2d 391. From the time the bankbooks were given to the plaintiff in November, 1967, until his death on April 28, 1969, the deceased never asked for the return of the books even though he was a constant visitor and companion of the plaintiff and her husband.
Where, however, the donor maintains some control over the money given, it is some evidence of an intent not to pass title immediately. The burden of proving the essential elements of a valid gift rests upon the party claiming the gift. Kriedel v. Krampitz, 137 Conn. 532, 79 A.2d 181. In the case of the money on deposit in the Colonial Bank and Trust Company it appears that on two separate occasions, February 27, 1968, and April 1, 1969, moneys were withdrawn by the donor to pay his income tax. With respect to the other two accounts, the decedent caused no transactions after the day he delivered the bankbooks to the plaintiff. Consequently, the referee was justified in concluding that there was a valid gift of two bank accounts but not of the Colonial Bank and Trust account, because the decedent maintained control over the last account. Cf. Perkins v. Corkey, 147 Conn. 248, 253, 159 A.2d 166.
The defendant claims that there was a fatal variance in the judgment from the pleadings in that the plaintiff claimed that she received "a gift inter vivos"; that the decedent "never made a claim of dominion or ownership of said passbooks ....; that he showed an intention to divest himself of all dominion over said property ... ; and that no part of the deposits or accrued interest has been *36 drawn and said deposits remain as they were when first delivered to the plaintiff." (Emphasis supplied by the defendant.) The complaint alleges that "1. In November, 1967, John Skucas ... , now deceased, delivered to Plaintiff, Meta Kukanskis, three (3) bankbooks or passbooks, ... [described in detail] which he intended to be hers absolutely and forever." A fair reading of the pleadings does not confirm the defendant's claim of prejudice because they do not necessarily imply that the decedent made a single unitary gift of the three bankbooks and that the gift of the bankbooks must stand or fall jointly. The defendant was apprised of the state of facts which the plaintiff intended to prove, namely, that she received three bankbooks as gifts. See Practice Book § 85; Mazziotti v. DiMartino, 103 Conn. 491, 496, 130 A. 844. The plaintiff met her burden of proof with respect to a gift of only two of them and recovered judgment for those two only, but not for the third bank account.
III
The defendant claims that the trial court erred in refusing to admit testimony concerning the financial circumstances of the plaintiff. The court acted within its discretion because the evidence was not relevant to the issue of the decedent's intent to pass title to the plaintiff.
The defendant further assigns error to the admission of testimony of witnesses pertaining to statements made by the decedent purporting to show his intent to make the bankbooks a gift to the plaintiff. Testimony of declarations of a decedent introduced to show his state of mind is not excluded by the hearsay rule. Babcock v. Johnson, 127 Conn. *37 643, 644, 19 A.2d 416. Statements made by a decedent are admissible for the purpose of showing his intent to make a gift. Klock v. Pierson, 123 Conn. 465, 467, 196 A. 147; Hammond v. Lummis, 106 Conn. 276, 137 A. 767; Meriden Savings Bank v. Wellington, 64 Conn. 553, 30 A. 774. Evidence of declarations of a decedent is admissible to show delivery or the intent with which the delivery was made. Guinan's Appeal, supra, 348. Consequently, the evidence was admissible, independently from the authority conferred by General Statutes § 52-172. Doolan v. Heiser, 89 Conn. 321, 94 A. 354.
The defendant further complains that the trial court erred in restricting the cross-examination of the plaintiff relative to her tax returns. As a general rule, the extent of a cross-examination is much in the discretion of the judge, yet it should be liberally allowed. See Papa v. Youngstrom, 146 Conn. 37, 40, 147 A.2d 494; Fahey v. Clark, 125 Conn. 44, 46, 47, 3 A.2d 313. The cross-questioning must be relevant and its limitation is within the discretion of the court, especially if the subject is remote to the main issue. Conley v. Board of Education, 143 Conn. 488, 495, 123 A.2d 747; Jennings v. Connecticut Light & Power Co., 140 Conn. 650, 675, 103 A.2d 535. Even had it been shown through cross-examination that the plaintiff maintained her association with the decedent merely for tax purposes, such a bare showing has no relevancy in discrediting her claim that the delivery of the bankbooks constituted gifts, absent proof that the decedent knew of this and considered the relationship to be primarily a business dealing. The court also sustained an objection raised when the defendant asked the plaintiff: "And if ... [some money from the bank account in question] was withdrawn by John *38 Skucas, it would mean that he didn't make a gift to you; isn't that correct?" The question called for a conclusion of law and as such was not proper. State v. McLaughlin, 132 Conn. 325, 341, 44 A.2d 116; Madison v. Guilford, 85 Conn. 55, 65, 81 A. 1046; McCormick, Evidence (2d Ed.) 28. The defendant was not precluded by the court's rulings on evidence from proving any allegations which might have supported his contention that there was no valid gift.
The remaining assignments of error that have been briefed have been reviewed and found to have no merit.
There is no error.
In this opinion the other judges concurred.
NOTES
[1] "[Practice Book] Sec. 309.CONDITIONS The court will not render declaratory judgments upon the complaint of any person:....(d) unless all persons having an interest in the subject matter of the complaint are parties to the action or have reasonable notice thereof." (Emphasis supplied.)
[2] Undoubtedly the finding refers to parties in addition to the plaintiff, but the defendant has failed to show the need of joining any other persons. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/872202/ | Electronically Filed
Intermediate Court of Appeals
CAAP-11-0000041
13-MAY-2011
09:09 AM | 01-03-2023 | 05-25-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1538184/ | 6 B.R. 582 (1980)
In re SAPOLIN PAINTS, INC., Debtor and Debtor-in-Possession.
In re WOOLSEY MARINE INDUSTRIES, INC., Debtor and Debtor-in-Possession.
UNITED CAPITAL CORP. and Metropolitan Greetings, Inc., Plaintiffs,
v.
SAPOLIN PAINTS, INC. and Woolsey Marine Industries, Inc., Defendants.
Bankruptcy Nos. 180-01691-21, 180-01807-21, Adv. No. 180-0682-21.
United States Bankruptcy Court, E.D. New York.
October 10, 1980.
Kaye, Scholer, Fierman, Hays & Handler, New York City, for Chemical Bank, proposed intervenor.
Ballon, Stoll & Itzler, New York City, for United Capital Corp. and Metropolitan Greetings, Inc., plaintiffs.
Stroock, Stroock & Lavan, New York City, for defendants, debtors, and debtors-in-possession.
OPINION
CECELIA H. GOETZ, Bankruptcy Judge:
Chemical Bank ("Chemical") has moved to intervene in this adversary proceeding brought by United Capital Corp. ("United") and Metropolitan Greetings, Inc. ("Metropolitan") against Sapolin Paints, Inc. ("Sapolin") and Woolsey Marine Industries, Inc. ("Woolsey"), debtors and debtors-in-possession herein. Chemical's motion is made under Rule 24 of the Federal Rules of Civil Procedure, made applicable by Bankruptcy Rule 724[1] to adversary proceedings commenced in the bankruptcy court.
*583 United and Metropolitan seek an order directing Sapolin and Woolsey to commence a proceeding in this Court to void a lien held by Chemical on certain notes which United and Metropolitan purchased from Sapolin and Woolsey as part of an auction sale of virtually all of the two debtors' assets. The lien is alleged to be voidable, by the debtors, as a preference, as defined in § 547 of the Bankruptcy Code, 11 U.S.C. § 547. United and Metropolitan contend that under the debtors' contract of sale, the debtors are obligated to take the action requested. By way of alternative relief, United and Metropolitan request a money judgment for damages equal to the face value of the notes. The principal amounts due on the notes are $317,346.07 and $109,250.00. Chemical has moved to intervene, both as a matter of right under FRCP 24(a), and also with the permission of the Court in the exercise of the Court's discretion under FRCP 24(b).
What is involved here is what is termed a "liquidating arrangement," which is permitted by § 1123(b)(4) of the Bankruptcy Code, 11 U.S.C. § 1123(b)(4). The proceeding has as its purpose the liquidation of the assets of the debtors and the distribution of the proceeds to their creditors. To a large extent, this liquidation has already taken place through the auction sale of the bulk of the assets of the debtors to Metropolitan and United.
When these Chapter 11 petitions were filed, Chemical was Sapolin's largest secured creditor; it was owed approximately $3,200,000, protected to some extent by certain collateral. However, it is unlikely that Chemical's security will cover the monies owed it. In consequence, Chemical may become the debtors' largest unsecured creditor.
FRCP 24(a) provides that "anyone shall be permitted to intervene in an action: (1) when a statute of the United States confers an unconditional right to intervene." Rule 24(b) provides that "anyone may be permitted to intervene in an action: (1) when a statute of the United States confers a conditional right to intervene." (Emphasis supplied.)
Section 1109(b) of the Bankruptcy Code, 11 U.S.C. § 1109(b), confers upon a creditor in an arrangement proceeding the right to "appear and be heard on any issue in a case" under Chapter 11 of the Bankruptcy Code.
"A party in interest, including the debtor, the trustee, a creditors' committee, an equity security holders' committee, a creditor, an equity security holder, or any indenture trustee, may raise and may appear and be heard on any issue in a case under this chapter." (Emphasis supplied.) Pub.L. 95-598, Nov. 6, 1978, 92 Stat. 2629.
Chemical is indubitably a creditor. The Code defines this term as follows: "[A]n entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor." 11 U.S.C. § 101(9)(A). The term "claim" is also defined in the Code as follows: "[R]ight of 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). Chemical falls squarely within the definition of "creditor": it has a claim against the debtor that arose before the filing of the petition.
Further, there can be no doubt that what is here involved is a "case" under the Code. While that term, unlike "creditor," is not defined, an authoritative text notes that it "embraces all controversies determinable by a court of bankruptcy." 2 Collier on Bankruptcy ¶ 301.03 at 301-3 (15th ed. 1979). See, In re Cloud Nine, Ltd., 3 B.R. 199 Bkrptcy.D.N.Mex.1980) (creditor had right to intervene to represent his own interests in adversary proceeding commenced by secured creditor to obtain relief from automatic stay).
*584 United and Metropolitan, however, would deny the words of the statute their plain meaning on the theory that the legislative history of § 1109(b) indicates that creditors, like Chemical, with concerns special to them alone were not intended to be included.
It is debatable whether any resort to legislative history is appropriate where the words of the statute are not only plain, but have themselves been defined by the legislators. Nor is it clear that the legislative history supports the limited reading United and Metropolitan urge. Parenthetically, plaintiffs' insistence that only creditors' committees should be heard does not sit well in their mouths in view of their exclusion of these committees from these proceedings. Indeed, one of the objections to the complaint which Chemical proposes to raise in its answer is that these committees have not been made a party to these proceedings by the plaintiffs. Collier on Bankruptcy urges quite a different construction from that supported by plaintiffs here. According to Collier, § 1109(b) should be "construed broadly to permit parties affected by a Chapter 11 case to appear and be heard." 5 Collier on Bankruptcy ¶ 1109.02 at 1109-23 (15th ed. 1979).
But it is unnecessary, for purposes of the present proceeding, to determine whether Chemical is entitled to intervene as of right, or only as of grace, because even if the Court were not satisfied that § 1109(b) confers an unconditional right to intervene, it would permit such intervention as a matter of discretion under FRCP 24(b). As noted earlier, plaintiff seeks a money judgment; such a judgment would diminish the assets available for distribution; such diminution would adversely affect every creditor; the greater the claim of that creditor, the larger the loss. Chemical, as a creditor of the debtors and potentially their largest creditor, clearly has an interest in contesting the entry of such a judgment.
There are other reasons, as well, why Chemical, as a matter of discretion, should be permitted to intervene in these proceedings. All bankruptcy proceedings are predicated on recognition of the interest of the creditors in the management and administration of the debtor's estate. The debtor-in-possession serves as the trustee of the creditors. A sale of the debtor's assets requires notice to the creditors and a hearing, at which their objections to such sale can be heard. It was at such a hearing that the plaintiffs made the purchase which gives rise to their present cause of action. Chemical participated in that hearing, and the Court approved the sale, in part because no objection was raised to it by any creditor. Chemical's interest in that sale did not terminate with that hearing. Chemical has a right to be heard in subsequent proceedings arising out of the sale in which they participated.
An order consistent with this opinion is being entered simultaneously herewith.
NOTES
[1] Section 405(d) of Title IV of the Bankruptcy Reform Act of 1978, Pub.L. 95-598, provides that the Bankruptcy Rules in effect on September 30, 1979 shall apply to cases commenced under Title 11 subsequent to September 30, 1979 to the extent not inconsistent with the provisions of the Bankruptcy Reform Act of 1978. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1538189/ | 6 B.R. 567 (1980)
In re BROTHERS COAL COMPANY, INC., Debtor.
WESTINGHOUSE CREDIT CORPORATION, Plaintiff,
v.
Claude S. YEARY, Sr., Defendant.
Bankruptcy No. 7-80-00441-B, Adv. No. 7-80-0151-B.
United States Bankruptcy Court, W.D. Virginia.
October 9, 1980.
*568 Don R. Pippin, Pippin & Pippin, Norton, Va., T. Munford Boyd, Paxson, Smith, Boyd, Gilliam & Gouldman, Charlottesville, Va., for plaintiff.
Lance Paul Cohen, Yeary & Tate, P.C., Abingdon, Va., James E. Nunley, Bristol, Va., for defendant.
MEMORANDUM OPINION AND ORDER
H. CLYDE PEARSON, Bankruptcy Judge.
The issue before the Court is whether or not the Plaintiff's motion to remand should be granted in this case which was removed to this Court from the Circuit Court of Wise County, Virginia.
On April 24, 1980 Brothers Coal Company, Inc. (Debtor) filed petition in this Court seeking relief under Chapter 11 (11 U.S.C. § 1101, et seq.) and an order for relief was accordingly thereupon entered.
The Debtor is engaged in a coal mining operation in Southwest Virginia and had incurred substantial indebtedness with the Plaintiff, Westinghouse Credit Corporation (Plaintiff) giving security interests in numerous items of mining equipment as collateral for the loan. Additionally, Plaintiff obtained from Claude F. Yeary, Sr. (Defendant) a guarantee of the indebtedness. The Defendant is a principal officer and shareholder of the Debtor corporation.
On June 3, 1980 Plaintiff instituted in the Circuit Court of Wise County, Virginia, a motion for judgment against the Defendant seeking judgment in the sum of $637,086.58 with interest and attorney's fees provided for in the guarantee agreement. On July 18, 1980, the Defendant filed application in this Court pursuant to 28 U.S.C. § 1478[1]*569 and Interim Bankruptcy Rule 7004 removing the State Court action to this Court alleging that the Defendant, being a principal of Brothers Coal Company, Inc., was being sued upon the said guarantee, the validity of which was being questioned, as well as whether or not the alleged guarantee was absolute or conditional; that the issues between the Plaintiff and Defendant herein are the same issues which will require resolution in this Court involving the Plaintiff and equipment dealers, Carter Machinery and Caterpillar, Inc.; that reclamation of the equipment or portions thereof would require a determination of credit upon the indebtedness resulting in possible unresolved deficiency against the Debtor and Yeary, and will likely require resolution by this Court of Plaintiff's compliance or noncompliance with the Uniform Commercial Code of Virginia.
It further appears that in another adversary proceeding in this Court styled Westinghouse Credit Corporation v. Brothers Coal Company, Inc., No. 7-80-0098-B, relief from the stay was granted permitting the Plaintiff herein to repossess and liquidate numerous items of equipment pursuant to the provisions of the Uniform Commercial Code of Virginia, the proceeds therefrom to be credited upon the indebtedness, which the Debtor and Yeary will ultimately be called upon to pay. Consequently, either this Court, or the Circuit Court of Wise County, if the case is remanded, will be required to hear and determine. If remanded to State Court, the Debtor herein may well be a necessary party in any determination of any remaining deficiency of the Plaintiff's debt.
The motion to remand raises a question of jurisdiction of this Court under 11 U.S.C. § 524(e).[2] This section deals with the discharge of debts of debtor in this Court and that the discharge of a Debtor does not effect the liability of any other entity for such debt such as defendant's guaranty herein. For the reasons given hereafter, the fact that a discharge of debtor's obligations does not discharge the obligations of a co-debtor is a matter entirely separate and apart from the question of jurisdiction of this Court to hear and determine questions affecting mutual debts of the debtor and a debtor's co-debtors. At the outset, it is essential that we review the new Code provisions relating to this Court's jurisdiction.
Title 11 U.S.C. § 105 designated "power of Court" states that the Bankruptcy Court may issue any order of process or judgment that is necessary or appropriate to carry out the provisions of this title. This is a provision of the Bankruptcy Code Title 11. It is also necessary that we review the provisions of a new Chapter 90 added to Title 28 relating to the Judiciary and Judicial Procedure.
Title 28 U.S.C. § 1471[3] provides for the jurisdiction of the Bankruptcy Court under *570 the Bankruptcy Reform Act of 1978, which is applicable hereto. This section vests in this Court jurisdiction of all civil proceedings arising under Title 11 or arising in or related to cases under Title 11. This section structures the Bankruptcy Court and is modeled as closely as possible on Chapter 5 of Title 28, which establishes and governs the United States District Courts and is designed and intended to mirror the District Court system as nearly as possible. See 9 Bkr.L.Ed. § 82:22, page 459. At page 472, the above authority sets forth the following commentary upon the jurisdictional portion herein recited as follows:
"Subsection (b) is a significant change from current law. It grants the bankruptcy court original (trial), but not exclusive, jurisdiction of all civil proceedings arising under title 11 or arising under or related to cases under title 11. This is the broadest grant of jurisdiction to dispose of proceedings that arise in bankruptcy cases or under the bankruptcy code. Actions that formerly had to be tried in State court or in Federal district court, at great cost and delay to the estate, may now be tried in the bankruptcy courts. The idea of possession or consent as the sole basis for jurisdiction is eliminated. The bankruptcy court is given in personam jurisdiction as well as in rem jurisdiction to handle everything that arises in a bankruptcy case.
The jurisdiction granted is of all proceedings arising under title 11 or arising under or related to a case under title 11. The bill uses the term "proceeding" instead of the current "matters and proceedings" found in the Bankruptcy Act and Rules. The change is intended to conform the terminology of title 28, under which anything that occurs within a case is a proceeding. Thus, proceeding here is used in its broadest sense, and would encompass what are now called contested matters, adversary proceedings, and plenary actions under the current bankruptcy law. It also includes any disputes related to administrative matters in a bankruptcy case.
... The phrase "arising under" has a well defined and broad meaning in the jurisdictional context. By a grant of jurisdiction over all proceedings arising under title 11, the bankruptcy courts will be able to hear any matter under which a claim is made under a provision of title 11 ... Indeed, because title 11, the bankruptcy code, only applies once a bankruptcy case is commenced, any proceeding arising under title 11 will be in some way "related to" a case under title 11. In sum, the combination of the three bases for jurisdiction, "arising under title 11," "arising under a case under title 11," and "related to a case under title 11," will leave no doubt as to the scope of the bankruptcy court's jurisdiction over disputes."
To implement the very broad jurisdiction granted the court in § 1471, the Congress further provided the ancillary sections delineating rights of parties litigant as to venue under §§ 1472, 1473, 1474; change of venue under § 1475 and with further provision for curing defects as provided by § 1477. Further, it set forth provisional remedies and rights of litigants such as jury trials under § 1480, appeal rights under § 1482, as well as remedial rights under § 1479 relating to removal. To put to rest any question as to jurisdiction of this Court pursuant to the powers herein mentioned, the Congress further enacted 28 U.S.C. § 1481 which states:
"a Bankruptcy Court shall have the powers of a court of equity, law, and admiralty, ..."
*571 Section 1481 vests in the Bankruptcy Court essentially all powers relating to civil remedies without exception.
To insure the expeditious and orderly processing of cases pending in this Court, as well as cases pending elsewhere coming within this Court's jurisdiction, Congress further provided in 28 U.S.C. § 1478 procedure for removal of civil actions pending in other courts. It is well to note that § 1478 is broad and encompassing, excluding only proceedings in the United States Tax Court or civil action by a Government unit to enforce police or regulatory powers. To further implement the Congressional intent to extend the broad jurisdictional authority of the Bankruptcy Court, the Congress further provided in § 1478(b) that an order granting remand or declining to grant remand is not reviewable by appeal or otherwise. This would seem to demonstrate a clear congressional intent, to implement the broad range of jurisdiction and powers needed in this Court to effectively resolve such disputes.
The commentary set forth in 9 Bk.L.Ed. 82:22, Supra, as to this Court's jurisdiction in matters "arising under Title 11", "arising under a case under Title 11" and "related to a case under Title 11" leaves little doubt as to the scope of the intended jurisdiction vested in this Court in this recent enactment. Further, in order that no question can be raised as to the Court's jurisdiction to hear such matters, the Congress vested in this Court under § 1481 full civil jurisdiction of equity, law and even admiralty.
It would seem to be inappropriate and a duplication of judicial effort to litigate such issues in the State Court while the same issues may have to be litigated again in this Court involving the allowance of the claim of the Defendant under 11 U.S.C. § 509 concerning claims and rights of co-debtors, as well as 11 U.S.C. § 502 and 11 U.S.C. § 510 providing for certain subordination of claims. Indeed, whether compliance with the Uniform Commercial Code in the disposition of collateral was done in a commercially reasonable manner, may well have to be determined in arriving at the liability remaining as between the three parties Debtor, Plaintiff and Defendant.
In order to determine whether or not remand should be granted this Court should only look to the jurisdictional language as to whether or not the matters affecting the action in question "arise in" or is "related to" the Debtor proceeding. From the foregoing facts, it would appear without question that the enforceability of the Plaintiff's claim against the Defendant is related to the rights the Debtor has under the loan agreements, the repossession and liquidation provisions of the Uniform Commercial Code, as well as the sections of Title 11 U.S.C. relating to allowance, qualification and subordination of claims and consequently, is clearly "related" within the purview of 28 U.S.C. § 1471.
This Court perceives no remedy either legal, or equitable which Plaintiff may avail itself of in the State Court which is not, likewise, available in this Court. Indeed, the possible elimination of duplication of effort and multiplicity of litigation would be better served by retention of this action in this Court.
If the Congress had intended to restrict and inhibit this Court with technical language within the Code provisions, it would have done so. Its grant of jurisdiction, powers and authority to this Court within the Code provisions is broad and all encompassing. This Court therefore would be misconstruing and distorting that Congressional intent, if it routinely remanded cases removed to this Court upon showing of vague or technical grounds as reasons therefor. It is a source of enlightenment to us all to read from the statement of legislative leaders which constitute a portion of the Legislative History of this Bankruptcy Reform Act of 1978. A portion thereof is found in 11 U.S.C.A., Appendix Page 354, and is as follows:
"Section 241 of title II establishes a new chapter 90 of title 28 entitled Court of Appeals in bankruptcy courts. This chapter specifies the jurisdiction and venue in bankruptcy cases and specifies various powers of the bankruptcy courts. The *572 chapter grants the courts of appeals original and exclusive jurisdiction of all cases under title 11. That jurisdiction in turn is completely delegated to the bankruptcy court with the sole exception of punishing for contempts by imprisonment and enjoining other courts. The bankruptcy court is thus given pervasive jurisdiction over all proceedings arising in or relating to bankruptcy cases. In addition, the bankruptcy court is given exclusive jurisdiction of the property of the estate in a case under title 11. This represents a major improvement over present law where the distinction between summary and plenary jurisdiction often results in wasteful litigation. Venue provisions pertaining to the new bankruptcy court have been described adequately in the House report accompanying H.R. 8200. It is intended that 28 United States Code 1473 provide alternate venues under subsections (a) and (c) in situations where both paragraphs would apply. Section 250 of title II of the House amendment makes clear that a bankruptcy court may issue a writ of habeas corpus and section 1651 of title 28 applies by its terms to enable a bankruptcy court to issue all other writs; 28 United States Code 1481 rounds out the power of a bankruptcy court by making clear that the court has all the powers of a court of equity, law, or admiralty." (emphasis added)
Accordingly, in view of the foregoing it is the conclusion of this Court that the petition to remand be, and the same is denied and it is so ORDERED.
NOTES
[1] 28 U.S.C. § 1478.
"(a) A party may remove any claim or cause of action in a civil action, other than a proceeding before the United States Tax Court or a civil action by a Government unit to enforce such governmental unit's police or regulatory power, to the bankruptcy court for the district where such civil action is pending, if the bankruptcy courts have jurisdiction over such claim or cause of action. "(b) The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground. An order under this subsection remanding a claim or cause of action, or a decision not so remanding, is not reviewable by appeal or otherwise."
[2] 11 U.S.C. § 524(e).
"Except as provided in subsection (a)(3) of this section, discharge of a debt of the debtor does not affect the liability of any other entity on, or the property of any other entity for, such debt."
[3] 11 U.S.C. § 1471.
"(a) Except as provided in subsection (b) of this section, the district courts shall have original and exclusive jurisdiction of all cases under title 11.
(b) Notwithstanding any Act of Congress that confers exclusive jurisdiction on a court or courts other than the district courts, the district courts shall have original but not exclusive jurisdiction of all civil proceedings arising under title 11 or arising in or related to cases under title 11.
(c) The bankruptcy court for the district in which a case under title 11 is commenced shall exercise all of the jurisdiction conferred by this section on the district courts.
(d) Subsection (b) or (c) of this section does not prevent a district court or a bankruptcy court, in the interest of justice, from abstaining from hearing a particular proceeding arising under title 11 or arising in or related to a case under title 11. Such abstention, or a decision not to abstain, is not reviewable by appeal or otherwise.
(e) The bankruptcy court in which a case under title 11 is commenced shall have exclusive jurisdiction of all of the property, wherever located, of the debtor, as of the commencement of such case." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537814/ | 918 A.2d 735 (2007)
391 N.J. Super. 534
Martin O'SHEA, Complainant-Appellant,
v.
WEST MILFORD BOARD OF EDUCATION, Custodian of Records-Respondent.
Superior Court of New Jersey, Appellate Division.
Argued March 5, 2007.
Decided April 5, 2007.
*736 Richard Gutman, Montclair, argued the cause for appellant.
Vito A. Gagliardi, Jr., argued the cause for respondent West Milford Board of Education (Porzio, Bromberg & Newman, attorneys, Morristown; Mr. Gagliardi, of counsel; Frank A. Custode, Newark, on the brief).
Debra A. Allen, Deputy Attorney General, argued the cause for respondent Government Records Council (Stuart Rabner, Attorney General, attorney; Michael J. Haas, Assistant Attorney General, of counsel; Ms. Allen, on the brief).
McConnell, Lenard & Campbell, attorneys for amicus curiae New Jersey Association of School Business Officials (Robert B. Campbell, Andover, on the brief).
Beth L. Finkelstein, Trenton, for amicus curiae New Jersey Association of School Administrators.
Cynthia J. Jahn, Trenton, for amicus curiae New Jersey School Boards Association (John J. Burns, on the brief).
Before Judges LINTNER,[1] S.L. REISNER and SELTZER.
The opinion of the court was delivered by
S.L. REISNER, J.A.D.
Complainant, Martin O'Shea, appeals from a revised final decision of the Government Records Council (GRC) dated October 28, 2005, denying O'Shea's request for a copy of handwritten notes taken by the Secretary of the West Milford Board of Education (Board) during an executive session of the Board. We affirm.
*737 I
The dispute in this case concerns a Board meeting conducted on June 22, 2004. O'Shea requested four types of records relating to the meeting: collective bargaining agreements approved by the Board during the meeting; the resolution passed by the Board prior to going into closed session during the meeting; a copy of a letter referenced during the meeting; and the minutes of the executive session held during the meeting. In connection with this latter request, O'Shea asked that "[i]f the minutes of the executive session are not [on] audio tape, I am requesting a copy of the original handwritten notes." The Board Secretary advised O'Shea that there were no audiotapes and provided him with the unapproved but typed formal minutes of the executive session, as prepared by the Secretary and submitted to the Board. The Secretary declined to provide the handwritten notes "because they are not government records."
In response to O'Shea's complaint under the Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13, on October 14, 2004, the GRC directed the Board to provide O'Shea a copy of the handwritten notes, "subject to appropriate redactions in accordance with OPRA." The Board appealed, and we granted the GRC's motion to remand the matter so that the agency could review the notes in camera to determine whether they fell within the statutory exemptions or privileges claimed by the Board under OPRA.
After conducting an in camera review of the handwritten notes, the GRC concluded that they were not a public record:
The in camera inspection disclosed a page of cryptically written notes, punctuated by the frequent use of initials and abbreviations, apparently intended to serve as a memory aid for the Board Secretary. Without further explication from the Board Secretary, the notes cannot be relied on as a factual account of board proceedings. For that reason, the Council has determined that the statutory exemption for advisory, consultative and deliberative material applies. Alternatively, the notes constitute a work-in-progress, as opposed to a completed draft, and therefore cannot fairly be characterized as a "government record" under OPRA. The requestor who has both the approved and unapproved draft minutes has no discernable interest in obtaining the handwritten notes such that it would be appropriate to override the statutory exemption; consequently, the notes need not be released.
The Board withdrew its appeal of the GRC's original decision, and O'Shea filed an appeal of the GRC's order on reconsideration.
II
Having canvassed the record, including the handwritten notes which we reviewed in camera, we conclude that the GRC reached the correct result. The Open Public Records Act defines a "[g]overnment record" as a document "made, maintained or kept on file in the course of his or its official business by any [governmental] officer, commission, [or] agency." N.J.S.A. 47:1A-1.1 (emphasis added). Government records do not include "interagency or intra-agency advisory, consultative, or deliberative material." Ibid. The term also
shall not include the following information which is deemed to be confidential ...:
information generated by or on behalf of public employers or public employees in connection with ... any grievance filed by or against an individual or in connection with collective negotiations, *738 including documents and statements of strategy or negotiating position.
[Ibid.]
We agree with the GRC that the handwritten notes might be considered "intra-agency consultative material," because they were informal notes taken preliminary to the Secretary preparing a draft of minutes for the Board's consideration and approval. However, we also conclude that they are not "government records" at all. While the Secretary's job includes the responsibility to record the proceedings of the Board, N.J.S.A. 18A:17-7, that responsibility is carried out by preparing the minutes.
The secretary shall give notice of all regular or special meetings of the board to the members thereof and record the minutes of all proceedings of the board and the results of any annual or special school election in suitable minute books.
[Ibid. (emphasis added).]
It is clear from the statutory language that the preparation of formal minutes is the Secretary's "official business" and that the formal minutes themselves, not the Secretary's handwritten notes, are the public record. See also N.J.S.A. 10:4-14 (requiring a public body to keep "reasonably comprehensible minutes of all its meetings"). Fox v. Estep, 118 Idaho 454, 797 P.2d 854, 855 (1990), on which O'Shea relies, is not on point, because the Idaho statute at issue there required the secretary to "[r]ecord" the agency's proceedings, and the court construed recording as a separate statutory duty from preparation of the formal minutes.
We reject O'Shea's contention that the Secretary's handwritten notes, jotted down as a memory aid to assist in preparing the formal minutes, are a public record merely because they were "made" by a government official. Under that rationale any Board member's personal handwritten notes, taken during a meeting to assist the member to recall what occurred, would be a public record because the member might arguably refer to them later in reviewing the Secretary's draft of the formal minutes. Taken further, every yellow-sticky note penned by a government official to help him or her remember a work-related task would be a public record. Such absurd results were not contemplated or required by OPRA.[2]
Gannett New Jersey Partners, LP v. County of Middlesex, 379 N.J.Super. 205, 877 A.2d 330 (App.Div.2005), is not on point. In that case, we held that a county planner's thirteen pages of factual notes of her conversations with applicants for a farmland preservation program were public records. However, we permitted the County to redact portions reflecting her evaluation of the application. Id. at 219-20, 877 A.2d 330. In Gannett, it appeared that the notes were made as part of the planner's investigation of the application. There was no indication that the notes had been translated into some more formal form, such as an official report. Nor were they the kind of informal memory aid at issue here.
In Atlantic City Convention Center Authority v. South Jersey Publishing Co., 135 N.J. 53, 63-64, 637 A.2d 1261 (1994), the Court held that audiotapes of executive sessions, used to prepare the agency's meeting minutes, were not public records under the Right-to-Know Law, N.J.S.A. 47:1A-l to -4.
*739 [I]n this case, the Authority used the audio tapes merely as a convenience for its own purposes in preparing the official minutes that it recognizes it must disclose under the Right-to-Know Law. The situation is as though a secretary had taken shorthand notes of the meeting. The secretary's transcribed notes, approved by the body, not the notes themselves, would constitute the official record of the meeting. Simply because a public agency uses an electronic note pad in place of a steno pad as a method to prepare "reasonably comprehensible minutes" does not establish that that electronic record constitutes a Right-to-Know record. Because the audio tapes of these proceedings served only as a convenient means to enable preparation of the official minutes and were not records required to be "made, maintained or kept," N.J.S.A. 47:1A-2, the audio tapes do not constitute Right-to-Know records.
[Atl. City, supra, 135 N.J. at 63-64, 637 A.2d 1261 (citations omitted).]
The Court held, however, that the tapes were common law records and ordered limited disclosure in the circumstances of that case.[3]
Moreover, the treatment of the executive session notes for purposes of OPRA must be considered in light of the Open Public Meetings Act (OPMA), pursuant to which the agency is permitted to go into executive session. N.J.S.A. 10:4-12b. As the Court recognized in Atlantic City, supra, OPMA permits an agency to go into closed or executive session to discuss matters which the Legislature has determined as matter of policy agencies have a legitimate need to discuss privately. These include certain personnel matters and contract negotiations. N.J.S.A. 10:4-12b(4) and (8). OPRA dovetails with OPMA by exempting documents on these subjects from disclosure as public records. N.J.S.A. 47:1A-1.1; N.J.S.A. 47:1A-9.
Under OPMA, the Board is required to keep minutes of its executive sessions, and must "`promptly'" release the notes to the public "unless full disclosure would subvert the purpose of the particular exception" that justified the closed session in the first place. Payton v. N.J. Tpk. Auth., 148 N.J. 524, 557, 691 A.2d 321 (1997) (quoting N.J.S.A. 10:4-14). However, particularly with respect to minutes of a closed session, the Board's determination as to what information to include in the minutes is itself a policy decision. The minutes of executive sessions are typically general enough to avoid disclosure of the kind of "free and frank exchange of views among the members" that OPMA intended to protect. Atl. City, supra, 135 N.J. at 68, 637 A.2d 1261. See also S. Jersey Publ'g Co. v. N.J. Expressway Auth., 124 N.J. 478, 493-94, 591 A.2d 921 (1991). A Secretary's handwritten notes may not reflect the Board's views in terms of the accuracy and inclusiveness of its minutes. Unlike the audiotapes considered in Atlantic City, supra, the notes here are not a verbatim record of what happened at the meeting and therefore may be inaccurate. It would defeat the purpose of the exception in OPMA for executive sessions, and defeat the Board's right to approve its minutes, if the Secretary's informal, preliminary notes were deemed public records. See also Home News v. Bd. of Educ. of Spotswood, 286 *740 N.J.Super. 380, 387-89, 669 A.2d 295 (App. Div.1996) (working drafts of budget documents not public records).
O'Shea's remaining appellate contentions are without sufficient merit to warrant discussion in a written opinion.[4]R. 2:11-3(e)(1)(E).
Affirmed.
NOTES
[1] Judge Lintner did not participate in oral argument. However, with the consent of counsel he has joined in this opinion. R. 2:13-2(b).
[2] O'Shea's citation to Warder v. Board of Regents, 97 Misc.2d 86, 410 N.Y.S.2d 742 (Sup.Ct.Spec.Term 1978), is not on point. In that case, the secretary's handwritten notes had been discarded, and it appears that what was at issue were the minutes that the secretary was required to keep in an official journal of the board's proceedings.
[3] We acknowledge that OPRA, N.J.S.A. 47:1A-1.l, is broader than the Right-to-Know Law, N.J.S.A. 47:1A-2, in its definition of what constitutes a public record. We do not address whether an audiotape would be a government record under OPRA.
[4] O'Shea contends that "[a] Board member who attended the executive meeting alleges that possible Board illegality was disclosed during the Board meeting, but was not included in the minutes." His brief refers us to a paragraph of a certification concerning the preparation of employee paychecks. Our review of the Secretary's handwritten notes reveals nothing relevant to this contention. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1537816/ | 918 A.2d 976 (2007)
100 Conn.App. 373
REMAX RIGHT CHOICE et al.
v.
Raffie ARYEH.
No. 26571.
Appellate Court of Connecticut.
Argued September 21, 2006.
Decided April 10, 2007.
*977 Kari L. Olson, with whom, on the brief, was Everett E. Newton, Hartford, for the appellant (defendant).
Kevin S. Coyne, Stratford, for the appellees (plaintiffs).
SCHALLER, BISHOP and HENNESSY, Js.
SCHALLER, J.
The defendant, Raffie Aryeh, appeals from the judgment of the trial court confirming an arbitration award in favor of the plaintiffs, Remax Right Choice and Jeffery Wright. On appeal, the defendant claims that the court improperly (1) concluded that the award was not void as a matter of law and (2) found that the parties waived the thirty day time period set forth in General Statutes § 52-416(a). We agree with the defendant that the court improperly found that he had waived the thirty day requirement. Accordingly, we reverse the judgment of the trial court.
The following factual and procedural history is relevant for our discussion. In February, 2003, the parties requested that their dispute involving a real estate transaction, which was pending before the Superior Court, be submitted to private, binding arbitration. The parties selected *978 attorney Richard J. Kenny as the arbitrator who would determine whether the plaintiffs were entitled to a commission for the sale of certain real estate lots, as well as statutory interest. Kenny held a hearing on August 6, 2004, and the defendant submitted the final posthearing brief on September 24, 2004. Kenny issued his decision in favor of the plaintiffs on January 4, 2005.[1] In a letter accompanying his award, Kenny wrote: "I am sorry that this decision took as long to do but I did spend considerable time reviewing the briefs and case law in this area. I also felt that it was necessary to do some research on the statutes and regulations."
On March 18, 2005, the plaintiffs filed an application to confirm the arbitration award totaling $129,703.70. On April 22, 2005, the defendant filed a memorandum of law in opposition to the plaintiffs' application to confirm the award. Specifically, the defendant argued that because the award was untimely, the arbitrator was deprived of subject matter jurisdiction, and, therefore, the award was void as a matter of law. The court heard argument on April 25, 2005, and issued its memorandum of decision confirming the award three days later. Specifically, the court stated: "After hearing and consideration of the evidence, [the] court finds that the defendant did not make a timely motion to vacate per General Statutes § 52-420(b) and that the parties waived [any objection to] the late filing of the award by failing to raise an objection after the deadline [of October 24, 2004] and prior to the entry of the award dated [January 4, 2005]." This appeal followed.[2]
I
The defendant first claims that the court improperly concluded that the award was not void as a matter of law. Specifically, he contends that the arbitrator's failure to issue his award within the statutory time frame automatically deprived the arbitrator of subject matter jurisdiction. Because we conclude that § 52-416(a) does not implicate subject matter jurisdiction, we are not persuaded.
The defendant's claim requires us to interpret the language of § 52-416, specifically, the phrase "no legal effect." We begin by setting forth the text of the relevant statute. Section 52-416(a) provides in relevant part: "If the time within which an award is rendered has not been fixed in the arbitration agreement, the arbitrator . . . shall render the award within thirty days from the date the hearing or hearings are completed, or, if the parties are to submit additional material after the hearing or hearings, thirty days from the date fixed by the arbitrator . . . for the receipt of the material. An award made after that time shall have no legal effect unless the parties expressly extend the time in which the award may be made by an extension or ratification in writing." (Emphasis added.)
We now set forth the relevant legal principles and our standard of review. "When interpreting a statute, "[o]ur *979 fundamental objective is to ascertain and give effect to the apparent intent of the legislature. . . . The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered. General Statutes § 1-2z." (Citation omitted; internal quotation marks omitted.) D'Angelo Development & Construction Co. v. Cordovano, 278 Conn. 237, 243, 897 A.2d 81(2006); Chatterjee v. Commissioner of Revenue Services, 277 Conn. 681, 689, 894 A.2d 919 (2006). Questions of statutory interpretation present questions of law; therefore, our review is plenary. Board of Education v. Tavares Pediatric Center, 276 Conn. 544, 556, 888 A.2d 65 (2006); Dorchinsky v. Windsor Ins. Co., 90 Conn.App. 557, 562, 877 A.2d 821 (2005).
The parties do not dispute that the arbitrator received the final brief on September 24, 2004, and that there was no written agreement or stipulation to modify the terms of § 52-416(a). For the award to comply with the terms of § 52-416(a), it needed to be filed by October 24, 2004. The arbitrator, however, did not issue his award until January 4, 2005. The defendant argues that because the award was not filed within thirty days of September 24, 2004, the arbitrator immediately lost subject matter jurisdiction. In other words, on October 25, 2004, the arbitrator no longer had any competency or authority to act on the parties' dispute and to issue an award. We do not agree.
In support of his argument, the defendant relies primarily on Carr v. Trotta, 7 Conn.App. 272, 508 A.2d 799, cert. denied, 200 Conn. 806, 512 A.2d 229 (1986). Specifically, the defendant refers to the following language from that case: "The defendant's challenge of the arbitrator's award questions the legality of the award. It is in effect an attack upon the jurisdiction of the arbitrator to render an award beyond the thirty-day limit. The question of subject matter jurisdiction may be raised at any time. [Section] 52-416 clearly states that [a]n award made after that time [thirty days after hearings are concluded or thirty days from receipt of additional material] shall have no legal effect unless the parties expressly extend the time in which the award may be made by an extension or ratification in writing. . . . This provision can only be interpreted to mean that the arbitrator under those conditions lacks the power to enter an award because he no longer has subject matter jurisdiction." (Emphasis in original; internal quotation marks omitted.) Id., at 274-75, 508 A.2d 799. Although at first blush this language appears to be controlling, a closer examination reveals that it was dicta.[3] The issue before the Carr court was whether the arbitrator had the authority to determine that the hearing would not be completed until he received the transcript. Id., at 277, 508 A.2d 799. We held that the arbitrator had such authority. Id. The statements in Carr regarding subject matter jurisdiction were not germane to its holding and, therefore, were dicta. It is well established that statements in prior cases that constitute dicta do not act as binding precedent. See, e.g., Smith v. Greenwich, 278 Conn. *980 428, 460, 899 A.2d 563 (2006); Jacoby v. Brinckerhoff, 250 Conn. 86, 103 n. 10, 735 A.2d 347 (1999) (Berdon, J., dissenting); Tracy v. Allstate Ins. Co., 76 Conn.App. 329, 337, 819 A.2d 859 (2003), aff'd, 268 Conn. 281, 842 A.2d 1123 (2004); State v. Iverson, 48 Conn.App. 168, 174, 708 A.2d 615, cert. denied, 244 Conn. 930, 711 A.2d 728 (1998); Lerman v. Levine, 14 Conn. App. 402, 410, 541 A.2d 523, cert. denied, 208 Conn. 813, 546 A.2d 281 (1988).
Our conclusion that § 52-416(a) does not implicate subject matter jurisdiction finds further support. First, we note that the Carr court compared noncompliance with § 52-416(a) to the failure to comply with the rule requiring a court to render a decision within 120 days as set forth in General Statutes § 51-183b, which has long been held to implicate personal, rather than subject matter jurisdiction.[4] "We find these circumstances to be analogous to the situation where the trial judge renders a judgment in excess of 120 days after the close of a trial absent consent or waiver of the parties." Carr v. Trotta, supra, 7 Conn.App. at 275, 508 A.2d 799. We note that in other scenarios in which a party may waive a statutory time frame, our appellate courts have concluded that personal jurisdiction, which may be waived, rather than subject matter jurisdiction, is implicated. For example, in Carpenter v. Law Offices of Dressler & Associates, LLC, 85 Conn.App. 655, 658-61, 858 A.2d 820, cert. denied, 272 Conn. 909, 863 A.2d 700 (2004), we concluded that the failure to comply with the time frame of General Statutes § 52-102b implicated personal jurisdiction and not subject matter jurisdiction. See also Lostritto v. Community Action Agency of New Haven, Inc., 269 Conn. 10, 31-35, 848 A.2d 418 (2004). In short, in the context of other statutes, when a party is permitted to waive the temporal requirements, it has been determined that personal rather than subject matter jurisdiction is implicated.
Second, decisions from both this court and our Supreme Court subsequent to Carr have held that the requirements of § 52-416(a) may be waived. It is well established that parties cannot waive or consent to confer subject matter jurisdiction of a court. See, e.g., ABC, LLC v. State Ethics Commission, 264 Conn. 812, 823, 826 A.2d 1077 (2003). In contrast, parties are permitted to modify or alter the thirty day time period of § 52-416(a).[5]*981 The text of the statute provides that "[i]f the time within which an award is rendered has not been fixed in the arbitration agreement, the . . . award [shall be rendered] within thirty days. . . ." (Emphasis added.) General Statutes § 52-416(a). The parties, therefore, are free to agree to enlarge the time frame set forth in the statute. See, e.g., Administrative & Residual Employees Union v. State, 200 Conn. 345, 510 A.2d 989 (1986) (collective bargaining agreement allowed for oral extensions of time for arbitrator to issue decision); see also Diamond Fertiliser & Chemical Corp. v. Commodities Trading International Corp., 211 Conn. 541, 560 A.2d 419 (1989); Marsala v. Valve Corp. of America, 157 Conn. 362, 369, 254 A.2d 469 (1969). In Capozzi v. Liberty Mutual Fire Ins. Co., 32 Conn.App. 250, 629 A.2d 424 (1993), aff'd, 229 Conn. 448, 642 A.2d 1 (1994), this court held that a party waived its right to object to an untimely award pursuant to § 52-416(a) where both parties had knowledge of the lateness of the award. Id., at 255-57, 629 A.2d 424. We further explained: "Our Supreme Court has made it clear that we will not permit parties to anticipate a favorable decision, reserving a right to impeach it or set it aside if it happens to be against them, for a cause which was well known to them before or during the trial. . . . This same principle has been applied in the arbitration context, where the court has held that a plaintiff's failure to raise the issue of timeliness prior to the issuance of an arbitration award operates as a waiver of the right to assert the award's lack of timeliness. . . . In [Diamond Fertiliser & Chemical Corp. v. Commodities Trading International Corp., supra, at 554, 560 A.2d 419], the court rejected the plaintiff's belated objection to the timeliness of an award, stating adamantly that it would not reward such conduct where the plaintiff attempted to manipulate the arbitration process by reserving objection until after the announcement of the arbitral award." (Citations omitted; internal quotation marks omitted.) Capozzi v. Liberty Mutual Fire Ins. Co., supra, at 256, 629 A.2d 424; see also Nathan v. United Jewish Center of Danbury, Inc., 20 Conn.Supp. 183, 185-87,129 A.2d 514 (1955) (series of letters exchanged by parties' attorneys sufficient to express intention to extend hearings and permit late award). Additionally, § 52-416(a) provides that the parties may "expressly extend the time in which the award may be made by an extension or ratification in writing."
Finally, our view is buttressed by the general principle in our jurisprudence that arbitration is a favored method of settling disputes and operates as an efficient and economical system of alternative dispute resolution. State v. AFSCME, Council 4, Local 387, AFL-CIO, 252 Conn. 467, 473, 747 A.2d 480 (2000); Garrity v. McCaskey, 223 Conn. 1, 4-5, 612 A.2d 742 (1992); International Brotherhood of Police Officers, Local 361 v. New Milford, 81 Conn.App. 726, 729, 841 A.2d 706 (2004) (arbitration favored method to prevent litigation, *982 promote tranquility and expedite equitable settlement of disputes); Wachter v. UDV North America, Inc., 75 Conn. App. 538, 543, 816 A.2d 668 (2003) (same). The interpretation of § 52-416 advanced by the defendant would be inconsistent with the policy favoring arbitration.
We conclude that the failure to comply with the temporal requirement of § 52-416(a) does not implicate subject matter jurisdiction but rather the continuing personal jurisdiction of the arbitrator over the parties. A late award, therefore, is not void as a matter of law. In the present case, there was no evidence that the parties agreed to alter or to modify the thirty day time frame. Accordingly, it falls solely within the terms of § 52-416(a). The critical issue, therefore, is whether the parties, or more specifically, the defendant, expressly extended "the time in which the award may be made by an extension or ratification in writing." General Statutes § 52-416(a).
II
The defendant next claims that the court improperly found that the parties waived the thirty day time period set forth in § 52-416(a). Specifically, he argues that there was no evidence in the record to support the court's finding of waiver. We agree with the defendant.
Despite our conclusion in part I that the failure to comply with the thirty day limit set forth in § 52-416(a) is not the sine qua non of a valid award, we acknowledge that the phrase "have no legal effect" has meaning. It is a basic tenet of statutory construction that the legislature does not intend to enact meaningless provisions. State v. Culver, 97 Conn.App. 332, 341, 904 A.2d 283, cert. denied, 280 Conn. 935, 909 A.2d 961 (2006). "Every word and phrase [in a statute] is presumed to have meaning, and we do not construe statutes so as to render certain words and phrases surplusage." (Internal quotation marks omitted.) Johnson Electric Co. v. Salce Contracting Associates, Inc., 72 Conn.App. 342, 351, 805 A.2d 735, cert. denied, 262 Conn. 922, 812 A.2d 864 (2002); see also Board of Education v. State Board of Education, 278 Conn. 326, 335, 898 A.2d 170 (2006); Vibert v. Board of Education, 260 Conn. 167, 176, 793 A.2d 1076 (2002).
We are guided by our Supreme Court's decision in Marsala v. Valve Corp. of America, supra, 157 Conn. at 362, 254 A.2d 469. In that case, an arbitrator issued the award outside of the time frame set forth in § 52-416(a). Id., at 368, 254 A.2d 469. The court stated that "[i]t follows that the award, under the express wording of the statute, had `no legal effect'." Id. Furthermore, this requirement was described as mandatory rather than discretionary. Id., at 369, 254 A.2d 469. As a result, the court concluded that the trial court properly vacated the award. "Certainly, we find nothing to commend in this plaintiff's conduct in seeking to have the award vacated under § 52-416. . . . The conclusion of the trial court that the award must be vacated was not only not erroneous but was the only conclusion which it could reach under the provisions of our applicable general arbitration statutes." (Emphasis added.) Id., at 369-70, 254 A.2d 469.
Similarly, in Hayes v. Travelers Indemnity Co., 26 Conn.App. 418, 420, 601 A.2d 555 (1992), neither party received a copy of the award until five months after the hearing had been concluded. "There is no indication that the parties waived the thirty day notification period." (Emphasis added.) Id., at 423, 601 A.2d 555. We concluded that the trial court improperly had denied the plaintiff's request for a second arbitration. Id.
In the present case, the court found that the plaintiffs waived any objection to the late filing by failing to object *983 after the deadline of October 24, 2004, and the entry of the award on January 4, 2005. Waiver is a question of fact and subject to the clearly erroneous standard of review. Capozzi v. Liberty Mutual Fire Ins. Co., supra, 32 Conn.App. at 257, 629 A.2d 424; see also Ridgefield v. Eppoliti Realty Co., 71 Conn.App. 321, 340, 801 A.2d 902, cert. denied, 261 Conn. 933, 806 A.2d 1070 (2002). "Under such a standard, [a] finding . . . is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." (Emphasis added; internal quotation marks omitted.) Valdes v. Yankee Casting Co., 94 Conn.App. 140, 145, 891 A.2d 994 (2006); see also Edmands v. CUNO, Inc., 277 Conn. 425, 438-39, 892 A.2d 938 (2006).
We have explained that "[w]aiver involves the idea of assent, and assent is an act of understanding. . . . Intention to relinquish must appear, but acts and conduct [consistent] with intention to [relinquish] . . . are sufficient. . . . Thus, [w]aiver does not have to be express, but may consist of acts or conduct from which waiver may be implied. . . . In other words, waiver may be inferred from the circumstances if it is reasonable to do so." (Citations omitted; internal quotation marks omitted.) Statewide Grievance Committee v. Brown, 67 Conn.App. 183, 188, 786 A.2d 1140 (2001), cert. denied, 259 Conn. 919, 791 A.2d 568 (2002).
In the present case, § 52-416(a) requires that the parties, in writing, expressly extend the thirty day time frame. A thorough review of the record reveals no evidence of any such waiver from October 24, 2004, and prior to the issuance of the award on January 4, 2005.[6] Under these facts and circumstances, we conclude that resolution of this appeal is controlled by Marsala v. Valve Corp. of America, supra, 157 Conn. at 362, 254 A.2d 469, and Hayes v. Travelers Indemnity Co., supra, 26 Conn.App. at 418, 601 A.2d 555. Absent evidence of an express extension of the thirty day requirement in § 52-416(a), there is nothing to support the court's finding of waiver.
The court relied on a statement in AFSCME, Council 4, Local 704 v. Dept. of Public Health, 80 Conn.App. 1, 8, 832 A.2d 106 (2003), rev'd, 272 Conn. 617, 866 A.2d 582 (2005), in which this court stated: "Failure to raise the issue of timeliness prior to the issuance of an arbitration award operates as a waiver of the right to object to the award as untimely." In our view, such reliance, although understandable, was misplaced. First, we note that our Supreme Court ultimately reversed *984 our decision. See AFSCME, Council 4, Local 704 v. Dept. of Public Health, supra, 272 Conn. at 617, 866 A.2d 582. Second, in making the statement that silence operates as a waiver in the context of § 52-416(a), we had relied on AFSCME v. New Britain, 206 Conn. 465, 468, 538 A.2d 1022 (1988), in which our Supreme Court stated: "We do not have to reach those issues in the present case, however, because the plaintiffs' failure to raise the issue of timeliness prior to the issuance of the arbitration award operates as a waiver of their right to assert the lack of timeliness in the board's decision." That case, however, concerned General Statutes § 31-98, which pertains to the state board of mediation and arbitration. AFSCME v. New Britain, supra, at 466, 538 A.2d 1022.[7] That statute, contrary to § 52-416(a), has been held to be directory rather than mandatory. Id., at 468, 538 A.2d 1022; see also Danbury Rubber Co. v. Local 402, 145 Conn. 53, 55-56, 138 A.2d 783 (1958); State v. AFSCME, Council 4, Local 1565, 49 Conn.App. 33, 38, 713 A.2d 869 (1998), aff'd, 249 Conn. 474, 732 A.2d 762 (1999); South Windsor v. South Windsor Police Union, 41 Conn.App. 649, 653, 677 A.2d 464, cert. denied, 239 Conn. 926, 683 A.2d 22 (1996).[8] Most importantly, § 31-98, unlike § 52-416(a), does not state that the failure to comply with the terms will "have no legal effect." We conclude, therefore, that the failure to object to an untimely arbitration award pursuant to § 52-416(a), standing alone, is insufficient to indicate waiver and that the court's finding to the contrary was clearly erroneous.
The plaintiffs contend that the defendant's failure to file a motion to vacate the award within thirty days from notice of the award pursuant to § 52-420(b)[9] is fatal to his appeal. Specifically, the plaintiffs refer us to General Statutes § 52-417, which provides in relevant part that "[t]he court or judge shall grant such an order confirming the award unless the award is vacated, modified or corrected as prescribed in sections 52-418 and 52-419."[10] Our Supreme Court has stated that "§ 52-417 limits a court's authority to vacate an arbitration award unless an application to vacate that award has been made in accordance with § 52-418." Wu v. Chang, 264 Conn. 307, 311, 823 A.2d 1197 (2003). General Statutes § 52-418 provides that the court "shall make an order vacating the award if it finds any of the following defects: (1) If the award has been procured by corruption, fraud or undue means; (2) if there has been evident partiality or corruption on the part of any arbitrator; (3) if the arbitrators have been guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy or of any other action by which the rights of any party have been prejudiced; or (4) if the arbitrators have exceeded their powers or so imperfectly executed them that a *985 mutual, final and definite award upon the subject matter submitted was not made."
We are mindful that "General Statutes §§ 52-408 through 52-424, controls arbitration in this state whe[n] the common law is inconsistent with our statutory scheme. . . . The statutory arbitration scheme encompasses many aspects of the arbitration process. . . . Thus, it is evident that the legislature's purpose in enacting the statutory scheme was to displace many [common-law] rules." (Citation omitted; internal quotation marks omitted.) Wu v. Chang, supra, 264 Conn. at 312-13, 823 A.2d 1197. Further, we are bound by our Supreme Court's statement that "once the thirty day limitation period of § 52-420(b) has passed, the award may not thereafter be attacked on any of the grounds specified in . . . § 52-418 . . . including fraud. To conclude otherwise would be contrary not only to the clear intent of the legislature as expressed in §§ 52-417, 52-418 and 52-420(b), but also to a primary goal of arbitration, namely, the efficient, economical and expeditious resolution of private disputes." (Citation omitted; internal quotation marks omitted.) Id., at 313, 823 A.2d 1197.
We agree that a party must file a motion to vacate a valid arbitration award within thirty days of notice of the award pursuant to § 52-420(b) and on the basis of the grounds set forth in § 52-418. See id. In the present case, however, no valid arbitration award was presented to the trial court. As we previously concluded, the award had no legal effect as a result of the failure of the arbitrator to render an award within the time limit of § 52-416 and the absence of any waiver by the parties. The language of the § 52-416 that such an award has "no legal effect" must be given consequence, for as we already have stated, "[e]very word and phrase is presumed to have meaning, and we do not construe statutes so as to render certain words and phrases surplusage." (Internal quotation marks omitted.) Johnson Electric Co. v. Salce Contracting Associates, Inc., supra, 72 Conn.App. at 351, 805 A.2d 735. Moreover, as § 52-416 is found in the same statutory arbitration scheme as §§ 52-418 and 52-420(b), we therefore consider the relationship between those statutes. See Thames Talent, Ltd. v. Commission on Human Rights & Opportunities, 265 Conn. 127, 136, 827 A.2d 659 (2003). We conclude, therefore, under the unique facts and circumstances of this case, that the defendant was not required to file a motion to vacate within the time frame set forth in § 52-420(b) because the arbitration award had no legal effect due to the arbitrator's untimely award.
In response to the plaintiffs' application to confirm the arbitration award, the defendant seasonably objected. The parties did not modify or alter the thirty day time frame set forth in § 52-416(a). The defendant did not expressly waive the requirements of that time frame. Accordingly, guided by our Supreme Court's opinion in Marsala and our decision in Hayes, we conclude that the arbitrator's award had no legal effect and that the court's decision to confirm the award was improper.
The judgment is reversed and the case is remanded with direction to vacate the arbitration award and to render judgment in favor of the defendant.
In this opinion the other judges concurred.
NOTES
[1] In his decision, Kenny concluded that the plaintiffs were entitled to a commission of $101,450 and statutory interest totaling $28,253.70.
[2] In an order dated January 2, 2007, we requested the parties to file simultaneous supplemental briefs on the following issue: "In the event this court concludes that the thirty-day time limit of General Statutes § 52-416(a) is not subject matter jurisdictional, but rather implicates the arbitrator's personal jurisdiction over the parties, should the trial court's judgment be affirmed on the ground that the defendant's failure to file a motion to vacate pursuant to General Statutes § 52-420(b) requires confirmation of the award."
[3] Black's Law Dictionary (6th Ed.1990) defines "dicta" as "[o]pinions of a judge which do not embody the resolution or determination of the specific case before the court. Expressions in [the] court's opinion which go beyond the facts before [the] court and therefore are individual views of [the] author of [the] opinion and not binding in subsequent cases as legal precedent."
[4] "In past cases interpreting [General Statutes] § 51-183b and its predecessors, we have held that the defect in a late judgment is that it implicates the trial court's power to continue to exercise jurisdiction over the parties before it. Whitaker v. Cannon Mills Co., 132 Conn. 434, 438, 45 A.2d 120 (1945); Foley v. George A. Douglas & Bro., Inc., 121 Conn. 377, 380, 185 A. 70 (1936). We have characterized a late judgment as voidable rather than as void; Borden v. Westport, 112 Conn. 152, 154, 151 A. 512 (1930); Lawrence v. Cannavan, 76 Conn. 303, 306, 56 A. 556 (1903); and have permitted the lateness of a judgment to be waived by the conduct or the consent of the parties. See, e.g., Hurlbutt v. Hatheway, 139 Conn. 258, 263, 93 A.2d 161 (1952); Whitaker v. Cannon Mills Co., supra. Thus, if both parties simultaneously expressly consent to a late judgment, either before the judgment is issued, or immediately thereafter, the judgment is valid and binding upon both parties, despite its lateness. Express consent, however, is not required. If a late judgment has been rendered and the parties fail to object seasonably, consent may be implied. Gordon v. Feldman, 164 Conn. 554, 556-57, 325 A.2d 247 (1973); Borden v. Westport, supra; Cheshire Brass Co. v. Wilson, 86 Conn. 551, 560, 86 A. 26 (1913). Because consent may be implied from a failure to object seasonably after a delayed judgment has been rendered, these cases do not support the trial court's ruling that § 51-183b invariably requires the prior consent of both parties in order to waive the time limits the statute imposes." Waterman v. United Caribbean, Inc., 215 Conn. 688, 692, 577 A.2d 1047 (1990).
[5] Our Supreme Court has explained that "[a] conclusion that a time limit is subject matter jurisdictional has very serious and final consequences. It means that, except in very rare circumstances . . . a subject matter jurisdictional defect may not be waived . . . [and] may be raised at any time, even on appeal . . . and that subject matter jurisdiction, if lacking, may not be conferred by the parties, explicitly or implicitly. . . . Therefore, we have stated many times that there is a presumption in favor of subject matter jurisdiction, and we require a strong showing of legislative intent that such a time limit is jurisdictional." (Emphasis added; internal quotation marks omitted.) Commission on Human Rights & Opportunities v. Savin Rock Condominium Assn., Inc., 273 Conn. 373, 379, 870 A.2d 457 (2005). We do not interpret General Statutes § 52-416(a) as showing a strong legislative intent to limit an arbitrator's subject matter jurisdiction.
[6] We note that prior case law has suggested that the terms of General Statutes § 52-416(a) may be implicitly waived by the parties. See, e.g., Diamond Fertiliser & Chemical Corp. v. Commodities Trading International Corp., supra, 211 Conn. at 552-54, 560 A.2d 419; Capozzi v. Liberty Mutual Fire Ins. Co., supra, 32 Conn.App. at 255-57, 629 A.2d 424. The terms of § 52-416(a), however, require the parties to expressly "extend the time in which the award may be made . . . in writing." (Emphasis added.) Under the facts and circumstances of the present case, we need not resolve this apparent inconsistency. Even if we were to consider whether the parties implicitly had waived the thirty day time frame, we would conclude that there was no evidence in the record to support such a finding. There was no indication that the defendant was notified or aware that the award would be late, or alerted to the date when it might be issued. Compare Diamond Fertiliser & Chemical Corp. v. Commodities Trading International Corp., supra, at 552-54, 560 A.2d 419; Capozzi v. Liberty Mutual Fire Ins. Co., supra, at 255-57, 629 A.2d 424; Nathan v. United Jewish Center of Danbury, Inc., supra, 20 Conn.Supp. at 183, 129 A.2d 514. Accordingly, any finding of waiver in the present case is clearly erroneous.
[7] We also note that a collective bargaining agreement existed in that case, contrary to the facts presently before us.
[8] Even though compliance may be mandatory, such requirements may implicate personal, rather than subject matter jurisdiction. Lostritto v. Community Action Agency of New Haven, Inc., supra, 269 Conn. at 31-32, 848 A.2d 418 (court previously has disavowed notion that mandatory language is per se subject matter jurisdictional); see also Carpenter v. Law Offices of Dressler & Associates, supra, 85 Conn.App. at 659, 858 A.2d 820.
[9] General Statutes § 52-420(b) provides that "[n]o motion to vacate, modify or correct an award may be made after thirty days from the notice of the award to the party to the arbitration who makes the motion."
[10] General Statutes § 52-419 concerns the correction or modification of an award and therefore does not apply to the present case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8304356/ | Mh. Chief Justice Buenett
delivered the opinion of the Court.
The parties will be referred to as they appeared in the trial court; that is, W. J. Cole, complainant, and Mrs. C. A. Langford and H. E. Little, as members of the Sumner County Election Commission, defendants.
The original bill was filed by the complainant in the Chancery Court of Sumner County on October 30, 1967, and alleged substantially the following facts: that a petition for an incorporation election for the City of Hender-sonville, Tennessee, was filed on October 23, 1967, with the Sumner County Election Commission; that the petition alleges that the signatures attached thereto exceed twenty per cent of the voters of the described territory voting at the last general election and that the petition requests the election commission to hold an election on the question of whether the territory described in the petition shall be incorporated under the provisions of T.C.A. sec. 6-1801 et seq.; that the petition is signed by *460thirty-nine persons who purportedly reside in, the area described in the petition. The complainant alleges "that he is a taxpayer and landowner in the territory sought to be incorporated and that he also owns land in the adjoining area.
The complainant then allegas that the.territory or area described in the petition filed with the election commission comprises only a very small part of the territory which is known as Hendersonville, Tennessee, now .unincorporated, the whole Hendersonville territory comprising approximately 40 square miles of developed and occupied land; that the area or territory in the petition which is proposed for incorporation comprises less than one square m'ile. of land and that the territory known as Hendersonville, Tennessee, contains forty square.’iniles of territory which is uninterrupted by any physical barriers; that two thousand three hundred and- thirty-one residents of the territory of Hendersonville voted in the last'general election and that over fourteen-thousand people reside in Hendersonville; that these residents are generally of the same economic and social class; that the petition to the election commission shows that the people signing the petition all live on two streets with the exception of four people with the great majority all -being residents of one single street in the Hendersonville territory ;. that the whole territory of Hendersonville is served by 100 miles of water lines and twenty miles of sewer lines and that, the area described, in the petition, to.,.the .election commission has a very small portion of said utilities.
- It is alleged that the incorporation of such a' small portion of the Hendersonville territory would not be an 'expression of the people of the whole territory and is not *461within the meaning, intent or authority of Chapter 18 of Tennessee Code Annotated; that such an election would he “unlawful, illegal and void and would cause irreparable harm and damage to the Hendersonville territory and to the rights of the people residing therein and that such election is not authorized under the statutes of Tennessee and would be in violation of the Constitution of Tennessee.”
The complainant then prays that the rights of the parties be declared; that the election commission be temporarily enjoined from holding the election and that at the hearing the injunction be made permanent.
A temporary injunction was issued to which the defendants responded with a motion to dissolve. Such motion alleged that the original bill was devoid of equity and therefore the injunction should be dissolved. It was also alleged that the original bill was improperly filed since it should have been filed in the name of the State on relation of the Attorney General in the nature of a quo. warranto proceeding.
The Chancellor refused to dissolve the injunction but did grant the defendants a discretionary appeal to this Court.
In argument before this Court much emphasis has been placed on the question of whether the holding of an election can or will be enjoined. However, it is felt by us that the more important question in the case at bar is whether the complainant has standing to bring, in his own name, an action contesting the legality of this petition. After much thought and research we have concluded that he does not.
*462The complainant alleges that he is a landowner and taxpayer in the area sought to be incorporated and also that he is a resident of and landowner in the territory of Hendersonville, Tennessee. However, the complainant does not allege any injury special to himself that will not also be suffered by the other residents and landowners similarly situated. Indeed the original bill shows on its face that the injuries that would be suffered if the election were held would be to the public generally and to the Hendersonville territory. The original bill states: ‘ ‘ such an election would be unlawful, illegal and void and would cause irreparable harm and damage to the Hender-sonville territory and to the rights of the people residing therein and that such election is not authorized under the statutes of Tennessee and would be in violation of the Constitution of Tennessee.” [Emphasis added.]
In the case of Schultz v. Lewallen, 188 Tenn. 206, 217 S.W.2d 944 (1948), the original bill was filed by certain citizens and taxpayers of Anderson County, to enjoin the election commissioners and others from holding elections in certain districts of Anderson County. The complainants alleged that the State and Anderson County had lost political jurisdiction of the area because the United States had acquired the area in condemnation proceedings. A demurrer was filed to the bill one of the grounds being that suing merely as citizens and taxpayers, the complainants had shown no special injury or irreparable damage which would entitle them to the in-junctive relief sought. The Chancellor sustained the demurrer and dismissed the bill.
In affirming the action of the Chancellor, this Court, in an opinion written by Mr. Justice Gailor, stated:
*463“We think the decree of the Chancellor was correct and should be affirmed. Suing merely as citizens and taxpayers of Anderson County, the Complainants show no right in themselves to the relief sought. By the bill they show no rights of theirs which are special to themselves and are invaded by the County situation described in the bill, nor do they show any irreparable damage to themselves. Such showing was essential to entitle them to the relief sought. Patton v. City of Chattanooga, 108 Tenn. 197, 65 S.W. 414; Wright v. Nashville Gas & Heating Co., 183 Tenn. 594, 194 S.W. 2d 459; State v. Staten, 46 Tenn. 233.”
In the case at bar the Chancellor stated in his memorandum opinion that he was considering the bill as and for a declaratory judgment and that therefore the complainant had a right to maintain the action. We do not feel, however, that this fact changes the basic principles of law just enumerated. In the case of Jared v. Fitzgerald, 183 Tenn. 682, 195 S.W.2d 1 (1945), there was a petition seeking to have the Davidson County Democratic Primary declared illegal and void. The bill was filed by certain residents of Davidson County as members of the Democratic Paity and as citizens and taxpayers of said county, bio candidate in said Primary joined in the petition. The petition alleged several grounds which would make the election void. In a concurring opinion written by Mr. Chief Justice Neil, affirming the Circuit Judge’s action in sustaining a demurrer to the petition, it is stated:
“We are thus asked to entertain a suit for a declaratory judgment that is ‘not directed to any one individual but to the system.’ I know of no case, and certainly none has been cited by counsel, holding that *464a citizen may file a bill for fiimself and on belialf of the general public for a declaratory judgment, its sole purpose being to vindicate the public’s right to have the primary election laws 'properly enforced and administered. ’ It is not the duty of any judicial tribunal to entertain a suit of this kind for the purpose of merely denouncing the acts of county election officials as being contrary to law, and that such officials must hereafter know that the law and 'the Constitution of this land are still supreme and must be recognized. ’
“I think the rule announced in Patton v. City of Chattanooga, 108 Tenn. 197, 65 S.W. 414, 421, to which there is no exception, determines the rights of petitioners in the instant case. It was there held that the injury complained of must be special and ‘not merely an injury in common with the body of the citizens. ’ ’ ’ In Wright v. Nashville Gas & Heating Co., 183 Tenn.
594, 194 S.W.2d 459 (1945), the original bill was filed in the Chancery Court of Davidson County, under the declaratory judgment act by the complainant as a taxpayer and property owner of Nashville, seeking to have the charter and franchise of the defendant, Nashville Gas & Heating Company, declared to be invalid and illegal insofar as these corporate documents were construed to empower the defendant to sell natural, as distinguished from manufactured, gas in the City of Nashville. The Court in effect held that where the alleged wrong was against a particular body as a whole, and that the complainant showed no special interest, the representative of the body wronged was the proper party to seek redress of the grievances.
In the case at bar it seems clear that the alleged wrong is a wrong against the public and against the State *465of Tennessee. The State has given the authority for holding these incorporation elections under certain circumstances. Certain requirements must be met before the petitioners are entitled to have an election held. If these procedures are not complied with but an election is held anyway, then the State and the public generally have been wronged. The incorporation statutes were passed for the benefit of the public and not just for the benefit of any one citizen or taxpayer.
■Of course the citizens, residents and taxpayers of the immediate area affected by the alleged illegal action would be most interested in seeing that such action is halted. However, the necessity for orderly procedure would dictate that they contact the person properly authorized to proceed for them, as members of the public. This is true whether the relief sought be in the nature of a quo warranto proceeding or otherwise.
To allow each individual taxpayer and landowner to bring an action to enjoin the election commission, or any other public body, from proceeding with their official duties would only result in confusion, and would cause these officials to spend most of their time in court defending their actions. Although in the instant case the complainant would appear to have a legitimate grievance if his allegations are borne out, we can readily foresee that in almost any action taken by public officials there are some who would contest the same to the point of bringing a lawsuit; and since temporary injunctions are granted mostly upon allegations, the officials might be constantly prevented from carrying out their duties, which result would certainly work to the detriment of the general public.
*466' Mr. Justice Dyer, speaking for the Conrt in the case of City of Fairview v. Spears, 210 Tenn. 404, 359 S.W.2d 824 (1961), stated the rule in the following terms:
“ ‘Public wrongs or neglect or breach of public duty cannot be redressed at a suit in the name of an individual or individuals whose interest in the right asserted does not differ from that of the public generally, or who suffers injury in common with the public generally, even it seems, though his loss be greater in degree, unless such right of action is given by statute. * * *
“ ‘In cases of purely public concern and in actions for wrongs against the public, whether actually committed or only apprehended, the remedy, whether civil or criminal, is as general rule by a prosecution instituted by the state in its political character, or by some officer authorized by law to act in its behalf, or by some of those local agencies created by the state for the arrangement of such of the local affairs of the community as may be intrusted to them by law. * * *
“ ‘In the enforcement of matters of public interest it is generally recognized that the attorney general appearing as a public officer is a proper party to maintain litigation.’
“If, as alleged the charter of Fairview has in fact been obtained in an illegal manner it is a public wrong. ’ ’
Since the question is not properly before us, we express no opinion as to whether the election commission could have been enjoined had the action been brought by a representative of the public interest. We only hold that *467when the only injury complained of is against the public generally, then the representative of the public must seek the redress, whether the proper course of action be to seek an injunction, or institute a quo warranto action or otherwise.
We would point out that if it resulted that the election would not be enjoined, the community would not be without a remedy. In the Fairview case just discussed it was clearly pointed out that a quo warranto action would lie against a municipal corporation which has obtained its charter illegally. Again we point out that we are expressing no opinion on the question of injunction.
It is with regret that we reverse such a well reasoned opinion as the one given by Chancellor Leech in this case wherein he reasoned that the incorporation statutes did not intend such an incorporation as the one attempted here. However for the reasons expressed herein, we feel compelled to do so.
■ The decision is reversed and the case dismissed. | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/1537828/ | 918 A.2d 675 (2007)
391 N.J. Super. 434
HUNTERDON MEDICAL CENTER, Plaintiff-Appellant,
v.
TOWNSHIP OF READINGTON, Defendant-Respondent.
Superior Court of New Jersey, Appellate Division.
Argued December 19, 2006.
Decided March 28, 2007.
*676 Susan A. Feeney, Newark, argued the cause for appellant (McCarter & English, attorneys; Ms. Feeney, of counsel and on the brief; Daniel P. Zazzali, on the brief).
Martin Allen, Warren, argued the cause for respondent (DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis & Lehrer, attorneys; Mr. Allen, of counsel and on the brief; Joseph V. Sordillo, on the brief).
Before Judges AXELRAD, R.B. COLEMAN and GILROY.
The opinion of the court was delivered by
AXELRAD, J.T.C. (temporarily assigned).
Hunterdon Medical Center ("HMC"), the operator of a hospital in Flemington, appeals from a judgment of the Tax Court denying exemptions from local property taxation for the 2000 through 2002 tax years for portions of a building it owned in Readington Township. HMC operated a Wellness Center, a Physical Therapy Service ("PT Service") and a Pediatric Practice in the building.[1] The court found that *677 these three activities did not meet the statutory "use" test to qualify for hospital purposes, and the Pediatric Practice further failed to meet the statutory "not-for-profit" requirement, thus disqualifying those portions of the building from exemption under N.J.S.A. 54:4-3.6. At issue in this appeal is the propriety of the Tax Court's articulation and application of a three-component analytical framework to distinguish off-campus facilities qualifying for a "hospital purposes" exemption, and those merely housing health-related activities, which are not exempt. We agree with the criteria developed by the Tax Court and their application to the facts in this case. Therefore, we affirm.
I
The facts adduced during the eight-day trial are set forth at length in Hunterdon Medical Center v. Readington Township, 22 N.J.Tax 302 (2005). The property under appeal is located about nine and one-half miles from the hospital campus, and contains a three-story structure totaling 26,055 square feet. During the years under appeal, the Wellness Center contained a total of 18,546 square feet, with about 16,000 square feet located on the first floor of the building and about 2500 square feet located on the second floor; the PT Service treatment room was located on the second floor of the Wellness Center; and the Pediatric Practice occupied 4584 square feet on the third floor of the building.
The Wellness Center, which was open to the public for a fee, contained facilities and equipment similar to a commercial fitness center or health club. During the years under appeal, its membership was primarily public-based. The Center's director, whose background was in commercial health clubs and not in medically-based fitness programs or facilities, hired all staff, without participation from HMC's human resources department or the Wellness Center's medical director. The Center also offered classes and seminars on topics such as healthy snacks, before and after pregnancy exercise, ballroom dancing and yoga. No member of HMC's physical therapy or cardio-pulmonary rehabilitation staff, dieticians or nutritionists served as instructors. The medical director conducted only a few lectures during the years under appeal.
The medical director was a part-time, independent contractor, who was not obligated to be physically present at the Center. He was able to fulfill his three and one-half hour per week contractual commitment almost exclusively by telephone conversations with the Center's director. No physician had any office or hours at the Center. Although Center members were required to complete a Physical Activity Readiness Questionnaire similar to many commercial fitness centers, those with medical restrictions were neither monitored by the fitness staff nor a physician, and were primarily responsible and accountable to themselves for the guidelines recommended to them by their physicians.
HMC operated one of three off-site PT services in this facility. The PT Service occupied a treatment room on the second floor of the Wellness Center, and the exercise equipment and facilities at the Center were available to persons receiving therapy. Anyone from the general public having *678 an appropriate prescription from a physician could obtain therapy from the PT Service. The staffphysical therapists, rehabilitative aides, and physical therapy aidesconsisted exclusively of non-physicians. There were no physicians on site and no member of the hospital's medical staff reviewed or supervised the therapy provided. Nor was any information communicated to the Wellness Center's medical director concerning therapy provided by the PT Service.
The Pediatric Practice existed as a private practice before its acquisition by HMC in 1997. The space in the building was like any other primary pediatric physician's office; it had examining rooms, physicians' offices, a nurses' station, laboratory, reception and waiting room, and ancillary facilities. The practice had weekday office hours, with after-hours emergency access directed by "911" to a centralized triage facility, which allocated patients among hospitals. Reciprocity of patient referrals between the hospital and the Practice occurred on occasion. The pediatricians were compensated by HMC pursuant to a short and long-term incentive plan similar to the one that had been in place under the prior private ownership, which provided for a specified base salary plus profit sharing.
II
N.J.S.A. 54:4-3.6 provides exemptions from local property tax for "all buildings actually used in the work of associations and corporations organized exclusively for hospital purposes." The three statutory criteria that must be satisfied to qualify for exemption are: (1) the entity owning the property must be organized exclusively for the exempt purpose; (2) the property must be actually used for the exempt purpose; and (3) the operation and use of the property must not be conducted for profit. Paper Mill Playhouse v. Millburn Twp., 95 N.J. 503, 506, 472 A.2d 517 (1984); Hunterdon Med. Ctr., supra, 22 N.J.Tax at 315.
HMC's position was that these facilities and services satisfied the hospital use requirement because they constituted part of the "continuum of care" provided by the hospital, were integral to its mission, and were integrated with its operation. In analyzing HMC's exemption claim, Judge Kuskin traced the case law interpreting the "hospital purposes" exemption of N.J.S.A. 54:4-3.6, beginning with the landmark case of City of Long Branch v. Monmouth Medical Center, 138 N.J.Super. 524, 351 A.2d 756 (App.Div.1976), aff'd o.b., 73 N.J. 179, 373 A.2d 651 (1977). There, we articulated the test to be employed in determining whether hospital-owned facilities were actually used for hospital purposes as "whether the property is `reasonably necessary' for such purposes." Id. at 532, 351 A.2d 756. This standard had its origins in the concept of a hospital as a 24-hour continuous care facility. We concluded there that the apartment building a block and a half from the hospital, which was used exclusively by medical residents, interns and nurses on the hospital staff, was tax-exempt. Our rationale was that the furnishing of housing facilities to hospital staff members at reduced rental "is reasonably necessary for the proper and efficient operation of the hospital," because by providing the housing facilities "in or near the hospital, the Center is better able to function properly and efficiently on a 24-hour basis." Id. at 533, 351 A.2d 756. We denied the exemption for the building that was used for private professional offices, holding "[c]onvenience is not the test." Id. at 535, 351 A.2d 756.
Relying upon Monmouth Medical Center, we held in Perth Amboy General Hospital v. City of Perth Amboy, 176 N.J.Super. *679 307, 422 A.2d 1331 (App.Div.1980), that hospital-owned condominium units located one and a half miles from the hospital and occupied by medical residents and their families were entitled to exemption as being used for a hospital purpose. We commented that "all circumstances considered, the distance separating the condominium from the hospital is not sufficient by itself to deprive the condominium of a `hospital purpose.'" Id. at 311, 422 A.2d 1331.
In City of New Brunswick v. Rutgers Community Health Plan, Inc., 7 N.J.Tax 491, 504 (1985), and Intercare Health Systems, Inc. v. Cedar Grove Township, 11 N.J.Tax 423, 431 (1990), aff'd, 12 N.J.Tax 273 (App.Div.1991), exemptions were denied to an HMO-owned health center and to a nursing home because their operations were not sufficiently "integrated" with affiliated hospitals to support a conclusion that they existed to facilitate the goals and purposes of those hospitals. In so concluding, the Tax Court found the requirement for "continuous ongoing care" to be "implicit within the [dictionary] definition[s] of the word `hospital'" and described "24-hour continuous care" as a "distinguishing feature of a hospital." Rutgers Community Health Plan, supra, 7 N.J.Tax at 500, 504.
In Jersey Shore Medical Center v. Neptune Township, 14 N.J.Tax 49, 68-69 (1994), the Tax Court granted an exemption to an on-site child care center, concluding it was reasonably necessary for the hospital's operation because it existed to further the hospital's staffing needs and the essential function of its 24-hour continuous medical and nursing care operation.
As noted by Judge Kuskin, it became apparent that none of these decisions addressed the evolving healthcare model or the characteristics of the facility presented in the trial before him.
Based on the extensive expert and lay testimony presented, it was clear that hospitals, like HMC, no longer confined themselves to a core function of providing 24-hour continuous acute care. Rather, they now embraced a "continuum of care" concept aimed at enhancing and improving the general health status of the population in the local area, offering a panoply of expanded "wellness" and "lifestyle" services, programs, and management tools provided at the hospital or at other locations, similar to those under appeal. Of concern to the Tax Court was that this elusive model enabled hospitals to self-define their mission, and in doing so, to determine the direction and extent of the definition of "hospital purposes" without limitation. The court cited HMC's expert's broad definition of a "hospital" and "hospital purposes" as an illustration:
HMC's expert defined a hospital as "a site of care that provides, at a minimum[,] 24 hour inpatient care and outpatient programs and services that meet the needs of the population served by that particular entity." He defined a hospital purpose as "any activity or service that furthers the mission of that hospital."
[Hunterdon Med. Ctr., supra, 22 N.J.Tax at 327.]
Judge Kuskin astutely observed that the effort by hospitals to self-define their mission was reminiscent of the following conversation in Lewis Carroll's Through the Looking Glass:
I don't know what you mean by "glory," Alice said.
Humpty Dumpty smiled contemptuously. "Of course you don'ttill I tell you." ... "When I use a word," Humpty Dumpty said in a rather scornful tone, "it means just what I choose it to meanneither more nor less."
*680 [Ibid. (citation omitted).]
In an attempt to ascertain the parameters that HMC would draw, the trial court asked HMC's witnesses to distinguish between the Wellness Center and a hypothetical gourmet restaurant owned by HMC in which a hospital nutritionist or dietician was present to give advice as to appropriate menu selections. HMC's witnesses drew the distinction that a restaurant dispensed a "commodity" while the Wellness Center provides "services." They further contended that a restaurant patron would not be a regular diner at the restaurant and would not be bound by the recommendations of the nutritionist or dietician. The court was unconvinced by their explanations.
The gourmet restaurant hypothetical illuminated the open-ended nature of the definition of "hospital purposes" asserted by HMC. It became apparent to the court that the "reasonably necessary" test, as it had been applied in prior cases where hospitals were analyzed in terms of providing the core function of 24-hour continuous acute care, could not be applied to the facts before it, because this would produce an inconclusive result. The court explained the dilemma confronting it as follows:
The expansion of hospitals' definition of their role in health care and the expansion of their health-related activities affect the analysis of a hospital purposes exemption claim under N.J.S.A. 54:4-3.6 in two respects. First, for purposes of that analysis, the definition of a hospital as a 24-hour continuous acute care facility set forth in Rutgers Community Health Plan and Jersey Shore Medical Center, no longer is accurate or adequate. Second, the "reasonably necessary" standard no longer provides a workable basis for determining qualification for the exemption because, under that standard, a hospital can argue, as does HMC, that any off-campus facility used for continuum of care health-related purposes is reasonably necessary to its operations, and a taxing district can argue, as does defendant, that no off-campus facility is reasonably necessary because the hospital can continue to function and provide its core acute care services without the facility.
[Hunterdon Med. Center, supra, 22 N.J.Tax at 329 (citations omitted).]
The Tax Court therefore considered factors given weight in other New Jersey cases and cases from other jurisdictions, and articulated a comprehensive analytical framework for evaluating whether HMC and other hospitals' off-campus facilities are used for hospital purposes to qualify for exemption under N.J.S.A. 54:4-3.6. The framework is comprised of the following three components:
1. [T]he nature and extent of the integration between the hospital and the subject facility. The greater the integration the more likely it is that a facility is serving a hospital purpose. In applying this component, the distance of the facility from the hospital campus must be considered. In Perth Amboy General Hospital . . . the location of the condominium units in issue, one and one-half miles from the hospital, did not preclude exemption. However, distance alone may suggest a lack of integration with the hospital;
2. [T]he extent to which the activity conducted in the facility is under the control or supervision of the hospital medical staff. The lesser the amount of supervision, the more likely it is that the activity is not serving a hospital purpose; and
3. [W]hether the facility serves primarily hospital patients or primarily members of the general public. For purposes *681 of this determination, a person generally should not be deemed a hospital patient merely as a result of using the facility . . . . Under some circumstances, however, a person using a hospital-owned and operated off-campus facility could become a hospital patient by virtue of that use [referencing discussion concerning the CP Rehab Service[2]].
Hunterdon Med. Ctr., supra, 22 N.J.Tax at 332.
The court set forth two additional considerations in applying the third component: (1) the extent to which the facility competes with commercial or privately owned facilities in the area, noting that competition in and of itself did not provide a basis to deny an exemption; and (2) the percentage of use of the specific facility by hospital patients in order to determine whether the facility is "predominantly used" for hospital purposes. Id. at 333.
Applying this framework, the court concluded that the Wellness Center, PT Service and Pediatric Practice did not qualify for the hospital purposes exemption under the second prong of N.J.S.A. 54:4-3.6, setting forth its findings in detail. The Wellness Center did not qualify because there was no integration of the care provided at the hospital with the activities and programs of the Center; there was virtually no supervision of or interaction with its members by the hospital's medical staff; and the vast majority of individuals using the facility were members of the general public, paying a membership fee. The court found the PT Service did not qualify for exemption because it was not integrated medically and received no meaningful supervision by the hospital medical staff, nor did it serve primarily hospital patients referred for continuation of treatment. The court concluded that the Pediatric Practice did not qualify because it primarily served members of the public, not hospital patients, and directly competed with private physician practices in the vicinity.[3]
III
On appeal, HMC contends the trial court erred by replacing the existing "reasonably necessary" standard, which the Wellness Center, PT Service and Pediatric Practice satisfied, with a new "analytical framework" test that is legally flawed. According to HMC, the new test improperly adds two factors beyond the nature and extent of the integration between the hospital and the subject facility: (1) the extent of supervision or control by the hospital medical staff (second component) and (2) whether the facility serves primarily hospital patients or primarily patients of the general public (third component). HMC further contends the third component of the analytical framework is vague as to who is a hospital patient, and is susceptible to being applied inconsistently. Moreover, HMC contends this component should be invalidated because it can be interpreted to *682 lead to illogical and unjust consequences, by requiring these facilities to accept only current patients of the hospital and penalizing hospitals for treating charity care and future patients. HMC also questions the validity of a test that considers the distance from the hospital as an important factor "suggest[ing] a lack of integration" (first component), although it acknowledges the court did not appear to apply this factor here.
Alternatively, HMC argues the challenged facilities meet the analytical framework proposed by the Tax Court and the court misapplied those standards in denying the exemptions. Specifically, HMC contends the court erred in implicitly limiting the definition of "hospital `medical staff'" in the second component involving supervision to hospital-employed "physicians" when it denied the exemption to the PT Service. HMC also contends the court inconsistently applied the third component and made an arbitrary distinction between those who were patients of the hospital for purposes of granting an exemption to the CP Rehab Service and the three departments that were denied exemptions. HMC further challenges the court's finding on the profitability prong of N.J.S.A. 54:4-3.6 regarding the Pediatric Practice.
We consider HMC's arguments in the context of several well established principles. Tax exemptions are not favored as they depart from the fundamental concept that everyone should bear a just and equal share of the public burden of taxation. Princeton Univ. Press v. Princeton, 35 N.J. 209, 214, 172 A.2d 420 (1961). Therefore, tax exemption statutes such as N.J.S.A. 54:4-3.6 are strictly construed against those claiming exemption. New Jersey Carpenters Apprentice Training & Educ. Fund v. Borough of Kenilworth, 147 N.J. 171, 189, 685 A.2d 1309 (1996), cert. denied, 520 U.S. 1241, 117 S.Ct. 1845, 137 L.Ed.2d 1048 (1997); Paper Mill, supra, 95 N.J. at 506-507, 472 A.2d 517. The burden is on the claimant to bring itself within the exemption provision and all doubts are to be resolved against the one claiming the exemption. Carpenters Apprentice, supra, 147 N.J. at 178, 685 A.2d 1309; Bloomfield v. Acad. of Med. of New Jersey, 47 N.J. 358, 363, 221 A.2d 15 (1966).
The record clearly demonstrates that the operation and mission of hospitals has evolved beyond the 24-hour continuous acute care facility that served as the basis for the reasonably necessary standard. The "continuum of care" concept now embraced by hospitals enables them to self-define what is "reasonably necessary" to fulfill their mission. In essence, this allows, and potentially encourages, an open-ended definition of hospital purposes, which is contrary to the strict construction of statutory exemptions. Circumstances such as these require a common sense approach and pragmatic application of the law.
The reasonably necessary standard articulated in prior cases may not provide a workable basis for analyzing a hospital's exemption claim for its off-site facility used as part of its continuum of care in its expanded health care role. Therefore, the Tax Court judge, using his "special expertise", Alpine Country Club v. Borough of Demarest, 354 N.J.Super. 387, 390, 807 A.2d 257 (App.Div.2002), formulated a logical, practical and viable standard, which is well-reasoned, supported by case law, and which we expressly endorse. The analytical framework articulated by Judge Kuskin is a natural progression and amplification of the broader and less defined "reasonably necessary" standard for determining whether a facility meets the second prong for exemption under N.J.S.A. 54:4-3.6. By setting forth a more defined formula of *683 standards to utilize in determining what constitutes a hospital purpose, the Tax Court has provided guidance for analyzing off-campus hospital facilities such as those under appeal. Our endorsement of this framework is not an abandonment of the reasonably necessary standard, which should be used in the first instance. Under circumstances such as these, however, where the reasonably necessary test is inconclusive without further articulation of what defines "hospital purposes," the Tax Court should consider and weigh the additional criteria contained in the analytical framework to differentiate between off-campus facilities that serve hospital purposes from those merely housing health-related activities.
The components of the analytical framework contain rational, objective criteria, with a built-in flexibility that enables a fair balancing of the interests of the hospital and the municipality. For example, both the integration and the medical supervision components are phrased in terms of a "sliding scale," i.e., greater integration indicating more likelihood the facility is serving a hospital purpose and less supervision indicating less likelihood the activity is serving a hospital purpose. Additionally, under the third component, although the court noted that mere use of the services or activities does not transform a member of the public into a "hospital patient," it recognized there are circumstances where such person would be considered a "hospital patient," referencing the CP Rehab Service as an example. Other examples of the flexible and even-handed standards contained in this framework are that "distance alone [of the facility from the hospital] may suggest a lack of integration" and that competition with a commercial or privately-owned facility is a consideration but not a disqualifying factor. Hunterdon Med. Ctr., 22 N.J.Tax at 332 (emphasis added).
The third component of the analytical framework is neither vague nor illogical. The court set forth specific factors and standards to utilize when evaluating whether the facility primarily services hospital patients or members of the general public. We do not perceive these standards being interpreted to penalize HMC for treating charity care or future patients.
We are also satisfied the Tax Court consistently and uniformly applied its analytical framework to HMC's hospital purposes exemption claim. We do not read its decision denying the exemption to the PT Services as limiting the required medical supervision component to physicians. This component involves a weighing process; the more supervision by medical staff, the more likely the facility meets this second of the three components. We note that the type of services conducted at PT Services are the least medically intrusive phase of physical therapy.
We recognize the unique role of the Tax Court in determining issues such as those before us, its special expertise and the deference to which its findings are entitled. "`[J]udges presiding in the Tax Court have special expertise; for that reason their findings will not be disturbed unless they are plainly arbitrary or there is a lack of substantial credible evidence to support them.'" Alpine Country Club, supra, 354 N.J.Super. at 390, 807 A.2d 257 (quoting Glenpointe Assoc. v. Twp. of Teaneck, 241 N.J.Super. 37, 46, 574 A.2d 459 (App.Div.), certif. denied, 122 N.J. 391, 585 A.2d 392 (1990)). Our scope of review in a case such as this "is limited to determining whether the findings of fact are supported by substantial credible evidence with due regard to the Tax Court's expertise and ability to judge credibility." First Republic Corp. of Am. v. Borough of E. Newark, 17 N.J.Tax 531, 536-37 (App. *684 Div.1998) (citations omitted), certif. denied, 157 N.J. 647, 725 A.2d 1128 (1999).
Other than HMC's challenge to the Tax Court's utilization of its analytic framework, the balance of HMC's arguments on appeal relate to the court's credibility determinations and the weight of the evidence. The court heard extensive testimony, reviewed numerous documents, evaluated the credibility of the witnesses, applied each of the criteria set forth in N.J.S.A. 54:4-3.6, and set forth detailed factual findings and conclusions in a cogent and comprehensive written opinion. We are not persuaded that any of the factual findings and conclusions challenged by HMC are unsupported by the evidence, and thus discern no basis to disturb or further discuss them. R. 2:11-3(e)(1)(A) and (E).
Affirmed.
NOTES
[1] The Tax Court found the portion of the building used exclusively by the cardio-pulmonary rehabilitation service, i.e., the CP Rehab Service office on the first floor of the Wellness Center, qualified for exemption under N.J.S.A. 54:4-3.6 for each of the tax years under appeal, 2000 through 2002. The parties agreed that the court's decision on the exemption issue would control for the parcel for the 2003 through 2005 tax years, which had been appealed and were pending trial, and stipulated to the assessments for all six years. On August 19, 2005, judgments were entered for all six years.
[2] The court found the CP Rehab Service served primarily hospital patients and qualified for exemption under this component. Its patients were admitted into the program through the admissions office of the hospital and the rehabilitation services were provided by an on-premises registered nurse employed by HMC under a hospital based, physician prescribed and reviewed regimen. The court noted, "[b]ecause of the extensive involvement of the Hospital medical staff in the CP Rehab Service, a person undergoing rehabilitation was, in a very real sense, an outpatient of the Hospital, whether or not he or she had been an inpatient in connection with a heart attack or other cardiac or pulmonary problems." Hunterdon Med. Ctr., supra, 22 N.J.Tax at 340.
[3] As previously stated, the court also found the Pediatric Practice failed to qualify under the third prong of N.J.S.A. 54:4-3.6 because of its profit-making function. | 01-03-2023 | 10-30-2013 |
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