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https://www.courtlistener.com/api/rest/v3/opinions/2393446/ | 500 S.W.2d 597 (1973)
Anne B. BIVEN, Administratrix of the Estate of James Phillip Biven, Deceased, and Anne B. Biven, Individually, Appellant,
v.
CHARLIE'S HOBBY SHOP and EIG Corporation, Appellees.
Court of Appeals of Kentucky.
June 29, 1973.
Rehearing Denied November 23, 1973.
H. Solomon Horen, Louisville, for appellant.
Philip L. Haller, Kenneth H. Anderson, Louisville, for appellees.
CATINNA, Commissioner.
This is an appeal from a summary judgment of the Jefferson Circuit Court, Common Pleas Branch, First Division, dismissing the complaint of Anne B. Biven, individually, and as administratrix of the estate of James Phillip Biven, deceased, against EIG Corporation.
On June 26, 1968, James Phillip Biven, a minor, was accidentally shot and killed by *598 Jeffrey Davis, the minor son of Charles S. and Dorothy B. Davis. Anne B. Biven qualified as administratrix of the estate of James Phillip, and in such capacity filed an action against Jeffrey Davis and his parents seeking damages in the sum of $25,000 because of their negligent acts which resulted in the death of James Phillip. By a "first amended complaint," damages were increased to $50,000. By an intervening complaint, Mrs. Biven, as mother and sole surviving heir of James Phillip, sought recovery in the amount of $27,000.
On March 20, 1969, Aetna Casualty & Surety Company, the insurance carrier of Charles S. and Dorothy B. Davis, entered into an agreement with Mrs. Biven by which it purported to loan her $20,000 in consideration of her releasing Charles S., Dorothy B., Jeffrey, and Danny Davis from any and all further liability arising out of the accidental death of James Phillip.
The "Loan Receipt" executed by the insurance company and Mrs. Biven reads in part as follows:
"Received from The Aetna Casualty and Surety Company, for and on behalf of Charles S. Davis, Dorothy B. Davis, Jeffrey Davis and Danny D. Davis, the sum of $20,000.00, as a loan, and in full consideration for all claims which the undersigned may have against Charles S. Davis, Dorothy B. Davis, Jeffrey Davis and Danny Davis, * * *. This loan, without interest, is repayable only in the event and to the extent of any net recovery the undersigned may make from any person, persons, corporation, corporations or other parties causing or liable for the accident aforesaid and as security for such repayment the undersigned hereby pledges to The Aetna Casualty and Surety Company all her claim or claims against said person, persons, corporation, corporations or other parties to the extent necessary to repay such loan."
On April 9, 1969, the following order was entered in the pending action:
"By agreement of the parties hereto, in person and by counsel it is
ORDERED, ADJUDGED AND DECREED that the above-styled action be and the same is hereby dismissed, settled with prejudice, at the cost of the defendants."
On June 25, 1969, Anne B. Biven, as administratrix and individually, filed an action against Charles Strack, d/b/a Charlie's Hobby Shop, and EIG Corporation, alleging that Charlie's Hobby Shop sold to Davis a defective pistol manufactured by EIG and that the negligence of each of them, as set out, contributed to the death of her son James. The claim sought damages for her as administratrix in the amount of $150,000 and, individually, in the amount of $50,000. Responsive pleadings were filed and interrogatories taken.
EIG filed a certified copy of the order of dismissal in the action of Mrs. Biven against Davis and filed its motion for a summary judgment upon the ground that the order was a bar to the action filed by Mrs. Biven against EIG, an alleged joint tort-feasor. Mrs. Biven asserted that the loan receipt constituted a release only as to the Davises and reserved any claims which she might have had against other tort-feasors including EIG. The circuit court, in dismissing the action against EIG, held that the prior order of dismissal constituted a complete release.
EIG argues that the loan receipt is nothing more than the sale of a tort claim to the insurance carrier, and as such sale is prohibited in Kentucky, the receipt in itself is void and of no effect. We do not construe the loan receipt to be a sale of a tort claim, but rather a partial release of such claim. This court in upholding the validity of the loan receipt has recognized that the difference between this type loan and an absolute payment is mere fiction. Aetna Freight Lines v. R. C. Tway Coal Company, Ky., 298 S.W.2d 293 (1956). We have further said that the intention of the parties *599 to the loan agreement determines whether the transaction is a loan or payment. State Farm Mutual Automobile Ins. Company v. Hall, 292 Ky. 22, 165 S.W.2d 838 (1942); Aetna Freight Lines v. R. C. Tway Coal Company, Ky., 298 S.W.2d 293 (1956); and Ratcliff v. Smith, Ky., 298 S.W.2d 18 (1957). In all cases where this court has considered the validity of the loan receipt, there was in existence at the time of its execution a contractual obligation to pay between the insurer who advanced the funds and the insured who was the recipient. In the case before us, there was absolutely no contractual relationship between the insurer and Mrs. Biven.
It seems quite obvious to us that this is not a situation where the company is making a so-called loan to an insured to pay damages for which the company might ultimately become liable, but rather is a direct payment from the insurer to the injured party. There is no possible way to consider this instrument as representing a loan but rather the intention of the parties clearly indicates that it is a release acknowledging the payment of a consideration for which the Davises were released from all liability. We, therefore, hold that the loan receipt constitutes nothing other than a release and it was valid for such purpose.
There remains one final question in regard to this "loan receipt," and that is whether or not it constituted a release of all the alleged joint tort-feasors or was partial and applied only to those named in the instrument. This court has consistently held that an unequivocal release of one joint tort-feasor releases all.
In discussing the legal effect of such release, we said in Commonwealth, Department of Highways v. Cardwell, Ky., 409 S.W.2d 304 (1966):
"The question was laid to rest in Kingins v. Hurt, Ky., 344 S.W.2d 811, decided March 24, 1961. The principle enunciated in Kingins was followed in Gibson v. Dupin, Ky., 377 S.W.2d 585. The clear teaching of those decisions is that the release of one joint or concurring tortfeasor serves to release them all, and the instrument of release should be construed to mean what it says, and `* * * unless on its face it can fairly be interpreted as reserving the claimant's rights against other tortfeasors it will be treated as an unconditional release.' Kingins v. Hurt, Ky., 344 S.W.2d at 812."
The loan receipt executed by Mrs. Biven clearly indicates upon its face that she was reserving any right she might have as against other possible joint tortfeasors. If this were not true, then that portion of the receipt reading "This loan, without interest, is repayable only in the event and to the extent of any net recovery the undersigned may make from any person, persons, corporation, corporations or other parties causing or liable for the accident aforesaid and as security for such repayment the undersigned hereby pledges to The Aetna Casualty and Surety Company all her claim or claims against said person, persons, corporation, corporations or other parties to the extent necessary to repay such loan" could have no legal effect and would be nothing more than surplusage in the instrument. Further, the recipients of the release are each specifically named in the loan receipt and it at no point contains the broad language found in so many releases to the effect that named tort-feasors, together with any and all other persons, etc., are released.
We are of the opinion that the loan receipt constitutes a release by the terms of which Charles S. Davis, Dorothy B. Davis, Jeffrey Davis, and Danny Davis are released from any and all liability by reason of the accidental death of James Phillip Biven, while there is reserved Mrs. Biven's rights against any and all other probable or possible joint tort-feasors.
The order of dismissal entered in the action of Mrs. Biven against Davis does not *600 change the terms of the loan receipt "release" as it could not be construed to include those who were not parties to the action. Cf. Burgess v. Consider H. Willett Company, 311 Ky. 745, 225 S.W.2d 315 (1949).
The judgment is reversed for proceedings consistent with the opinion.
PALMORE, C. J., and MILLIKEN, OSBORNE, REED, STEINFELD, and STEPHENSON, JJ., sitting.
All concur except OSBORNE, J., who concurs in result only. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858036/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-219-CR
AND
NO. 3-91-220-CR
FRANK NAVARETTE LAREZ,
a/k/a FRANK NABARETTE LAREZ,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF TOM GREEN COUNTY, 119TH JUDICIAL
DISTRICT
NOS. CR90-0787-B & CR90-0788-B, HONORABLE DICK ALCALA, JUDGE
PER CURIAM
In the presence of a jury, appellant pleaded guilty to possessing less than twenty-eight grams of heroin and less than twenty-eight grams of cocaine. Tex. Health & Safety Code
Ann. § 481.115 (Pamph. 1991). Appellant pleaded true to paragraphs alleging two previous
felony convictions. The jury assessed punishment in each cause at imprisonment for ninety-nine
years.
The court's charge included the instruction on the law of parole prescribed by Tex.
Code Crim. Proc. Ann. art. 37.07, § 4(b) (Supp. 1992). That instruction concludes by
admonishing the jury not to consider the manner in which good conduct time and parole might be
applied to the defendant before them. In his only point of error, appellant contends the jury
violated this admonition in determining his punishment.
Appellant first raised this contention in a motion for new trial. At the hearing on
the motion, one of the jurors at appellant's trial testified that the parole instruction was read and
discussed by the jury, that he understood the parole instruction to mean that appellant would serve
no more than fifteen years in prison regardless of the punishment assessed by the jury, that more
than one vote was taken on the question of punishment, and that the parole instruction changed
his vote.
Traditionally, discussion of parole while deliberating punishment was considered
jury misconduct. See Tex. R. App. P. Ann. 30(b)(8) (Pamph. 1991). In its last full treatment
of this subject, the court of criminal appeals held that a jury's discussion of parole constitutes
reversible error if: 1) there is a misstatement of the law, 2) asserted as fact, 3) by one professing
to know the law, 4) that is relied on by other jurors, 5) who for that reason change their vote to
a harsher punishment. Sneed v. State, 670 S.W.2d 262, 266 (Tex. Crim. App. 1984). That court
recently applied Sneed in a case similar to the one before us. Shields v. State, 809 S.W.2d 230
(Tex. Crim. App. 1991).
In Shields, the jury was given the statutory parole instruction. In apparent violation
of the admonition not to consider how the parole law might be applied to the defendant, the jurors
decided to assess punishment at imprisonment for twenty-five years after several jurors asserted
that the defendant "would be out" in eight years. The court of criminal appeals concluded that
[a]lthough the jurors may have been relying on the mathematical formula presented
to them earlier in . . . [the statutory parole] instructions, the assertion was still a
misstatement of the law, first, because the actual computation of the time was a
matter that was not within the control of the jury or the court and, second, because
it disregarded the instruction that the actual computation of the time was something
that could not be predicted with any accuracy or reliability.
809 S.W.2d at 233. Because other jurors were shown to have relied on these statements and
voted for a harsher punishment that they otherwise would have favored, jury misconduct under
Sneed was shown. Shields, 809 S.W.2d at 234. See also Gil v. State, 756 S.W.2d 108 (Tex.
App. 1988, no pet.).
The cause before us is distinguishable from Shields. The testimony of the juror
established only that the parole instruction was discussed by the jury. He did not testify that the
jury attempted to apply the formula for parole eligibility to appellant in setting punishment. The
juror did not testify that he or any other member of the jury asserted as a fact that appellant would
be released from prison after fifteen years regardless of the punishment assessed, nor did he testify
that the vote of any member of the jury changed in reliance on such a statement. The juror
testified only to his personal understanding of the parole instruction and the effect that
understanding had on him. It is improper to impeach the verdict by describing the mental process
of a single juror. See Daniels v. State, 600 S.W.2d 813, 816 (Tex. Crim. App. 1980). (1)
The evidence adduced at the new trial hearing did not demonstrate jury misconduct.
The district court did not err by overruling the motion for new trial.
The judgments of conviction are affirmed.
[Before Justices Powers, Jones and B. A. Smith]
Affirmed on Both Causes
Filed: January 29, 1992
[Do Not Publish]
1. The juror's affidavit attached to appellant's motion for new trial described behavior much
closer to that characterized as jury misconduct in Shields. This affidavit was not introduced at the
hearing, and therefore was not evidence. Rios v. State, 510 S.W.2d 326, 328-29 (Tex. Crim.
App. 1974). The only evidence before the court was the testimony of the juror described in this
opinion. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/876890/ | 598 P.2d 1109 (1979)
LITTLE HORN STATE BANK, a Montana Banking Corporation, Plaintiff and Respondent,
v.
George REAL BIRD, Jr., et al., Defendants and Appellants.
No. 14630.
Supreme Court of Montana.
Submitted June 11, 1979.
Decided August 9, 1979.
Rehearing Denied September 7, 1979.
D. Michael Eakin, Legal Services argued, Hardin, Steven L. Bunch argued, Legal Services, Helena, for defendants and appellants.
Clarence T. Belue argued, Hardin, for plaintiff and respondent.
*1110 HARRISON, Justice.
Plaintiff bank brought this action in Justice Court, Big Horn County, to recover money owing from defendant on certain promissory notes. The Justice Court entered a default judgment in favor of plaintiff. Defendant's motion to set aside the default was denied, and she appealed to the District Court. The District Court dismissed the appeal, and defendant appeals from the dismissal.
In December 1977, plaintiff initiated this action in Justice Court to recover money owing from two loans made to defendant. Service of process was completed on defendant on January 10, 1978. On January 12, defendant appeared before the Justice Court and sought the court's assistance in negotiating a settlement. No written appearance was made nor was there any showing the defendant had an attorney at that time. At the suggestion of the Justice Court, defendant contacted plaintiff's attorney and tried to reach a settlement. She paid the attorney $150 on her account and left with the understanding that no action would be taken in the matter while she attempted to secure a loan to pay off the remainder of the indebtedness.
On January 23, without notice to the defendant, the Justice Court entered a default judgment in favor of the bank and issued a writ of execution. The judgment did not give the defendant credit for the $150 paid by her to plaintiff's attorney. Defendant learned of the default when her only nonexempt asset was seized pursuant to the writ of execution. Defendant then contacted an attorney and filed a timely motion to set aside the default judgment, supported by an affidavit setting out defenses, counterclaims, and facts to show defendant was not required to file a written answer. The Justice Court denied the motion.
Defendant then filed notice of appeal in Justice Court. She was unable to find sureties for undertaking, so she submitted an affidavit of inability to provide the undertaking. Plaintiff objected to the jurisdiction of the District Court to hear the appeal when no undertaking was provided. The District Court dismissed the appeal, and this appeal followed.
Defendant presented two issues on appeal involving violation of constitutional rights, both state and federal. Due to the peculiar facts surrounding the entry of the default judgment here, we find it unnecessary to consider the two issues on appeal. Rather, we base our decision on Montana case law dealing with considerations similar to those presented in this case.
In Brothers v. Brothers (1924), 71 Mont. 378, 383-84, 230 P. 60, 61, this Court said: "No great abuse of discretion by the trial court in refusing to set aside a default need be shown to warrant a reversal, for the courts universally favor a trial on the merits." The Court went on to state it is preferable to dispose of cases on their merits than to maintain too strict a regard for technical rules of procedure. Brothers, 71 Mont. at 384, 230 P. at 61. Here, the record shows the plaintiff took a default after the defendant felt she had been assured she would be given time to negotiate a settlement, and the judgment entered exceeds the amount defendant owed plaintiff at the time the court entered judgment by $150. Given the above rule favoring hearing cases of this nature on their merits, defendant should have her day in court.
We therefore find the judgment erroneous and remand the case to the District Court of Big Horn County with directions to set aside the default entered and return the cause to the Justice Court for further proceedings.
HASWELL, C.J., and DALY, SHEEHY and SHEA, JJ., concur. | 01-03-2023 | 06-04-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/697301/ | 56 F.3d 750
Steven S. SCHOLES, as Receiver for Michael S. Douglas, D & STrading Group, Ltd., Analytic Trading Systems,Inc., and Analytic Trading Service,Inc., Plaintiff-Appellee,v.Charles LEHMANN and Lisa Lehmann, Joseph E. Phillips,African Enterprise, Inc., et al., Defendants-Appellants.
Nos. 94-2039, 94-2136, 94-2718 and 94-2947.
United States Court of Appeals,Seventh Circuit.
Argued Feb. 17, 1995.Decided May 18, 1995.Rehearing and Suggestion for Rehearing En Banc Denied July 12, 1995.
Alan S. Rutkoff (argued), Gary L. Prior, Richard L. Sandler, Mary B. Tribby, and Mark T. Ostrowski, McDermott, Will & Emery, Chicago, IL, for plaintiff-appellee.
Eugene Crane, Richard D. Grossman, Dannen, Crane, Heyman & Simon, David A. Shaneyfelt, James A. Davids, Bruce J. Van Heukelem, Hoogendoorn, Talbot, Davids & Godfrey, Chicago, IL, Christopher J. Stoll, Leoris & Cohen, Highland Park, IL, Abraham Brustein, Thomas J. Cunningham (argued) and Thomas G. Jaros, Smith, Williams & Lodge, Joel H. Spitz, Timothy C. Klenk (argued), Jerome K. Bowman, Ross & Hardies, Chicago, IL, Kirk R. McCormick, James J. Murphy, Harris, Karstaedt, Jamison & Powers, Colorado Springs, CO, Philip R. King, Tribler & Orpett, Chicago, IL, and Wayne Johnson, Heart Cry Intern., Round Lake Beach, IL, for defendants-appellants.
Before POSNER, Chief Judge, and MANION and KANNE, Circuit Judges.
POSNER, Chief Judge.
1
Michael Douglas masterminded a Ponzi scheme that has given rise to the interesting and important issues of fraudulent-conveyance law which these appeals require us to consider. Here is how the scheme operated (approximately--we shall simplify the facts for the sake of clarity). Douglas created three corporations and caused them in turn to create limited partnerships in which the corporations would be the general partners and would sell limited-partner interests to the investing public. The corporations represented to prospective investors that the limited partnerships would trade commodities and yield the limited partners a return of 10 to 20 percent per month on their investment. Although some trading of commodities was done, most of the money raised from the sale of the limited-partner interests was used simply to pay the promised return. These payments gave the scheme credibility, enabling Douglas to sell additional limited-partner interests. The scheme was launched in 1987 and by the time it crashed in 1989 Douglas's corporations had raised $30 million from the sale of limited-partner interests. Douglas was prosecuted for fraud, pleaded guilty, and is serving a 12-year federal prison sentence.
2
The Securities and Exchange Commission brought this civil suit against Douglas and his three corporations in 1989, charging multiple violations of federal securities laws. The Commission asked the district court to appoint a receiver for Douglas and the corporations. The court obliged, appointing Steven Scholes of the McDermott firm. To date Scholes has recovered $12 million, consisting mainly of property of Michael Douglas that Douglas had bought with money that he had siphoned from the corporations, which in turn had obtained the money from the sale of shares in the limited partnerships. The receiver has distributed the recovered funds to the investors in the Ponzi scheme who lost money, with the result that, thus far, each has recovered 40 percent of his losses.
3
The appeals that we have consolidated for decision arise from the receiver's efforts to recover additional assets from Douglas's ex-wife (Lisa Lehmann) and her husband, from one of the investors in the Ponzi scheme who was lucky enough to make money (Joseph Phillips), and from five religious corporations. The law under which the receiver proceeded is the Illinois law of fraudulent conveyances as it stood in 1989. Ill.Rev.Stat. ch. 59, p 4 (1987). That law was repealed the following year when Illinois adopted the Uniform Fraudulent Transfer Act, 740 ILCS 160, and later we shall consider the possible bearing of the new law on this case. Federal jurisdiction is based on the ancillary jurisdiction of the federal courts, Pope v. Louisville, New Albany & Chicago Ry., 173 U.S. 573, 577, 19 S. Ct. 500, 501, 43 L. Ed. 814 (1899); Tcherepnin v. Franz, 485 F.2d 1251, 1255-56 (7th Cir.1973)--now a part of their statutory "supplemental" jurisdiction, 28 U.S.C. Sec. 1367; David D. Siegel, "Practice Commentary," 28 U.S.C.A. Sec. 1367, pp. 829, 830-31 (1993); Unique Concepts, Inc. v. Manuel, 930 F.2d 573, 574 (7th Cir.1991), which furnishes the jurisdictional basis for one of the three suits because it was filed after December 1, 1990, the effective date of 28 U.S.C. Sec. 1367. The laying of venue for all three suits in the Northern District of Illinois is authorized by 28 U.S.C. Sec. 754, which allows a receiver to sue in the district in which he was appointed to enforce claims anywhere in the country. The district court granted summary judgment for the receiver against all the defendants and entered judgments of $299,000 against the Lehmanns, $377,000 against Phillips, and $509,000 against the religious corporations.
4
The (old) fraudulent-conveyance statute provided that "every gift ... or transfer ... made with the intent to disturb, delay, hinder or defraud creditors or other persons ... shall be void as against such creditors ... and other persons." It is apparent from the wording of the statute, as well as from its purpose, that if a transfer is made for commensurate consideration--if it is "fair" in the sense of being one side of an equal exchange--it is not voidable. For creditors are not disturbed, delayed, hindered, or defrauded if all that happens is the exchange of an existing asset of the debtor for a different asset of equal value. United States v. Kitsos, 770 F. Supp. 1230, 1235 n. 14 (N.D.Ill.1991) (interpreting Illinois law), aff'd without opinion, 968 F.2d 1219 (7th Cir.1992); see also In re Xonics Photochemical, Inc., 841 F.2d 198, 202 (7th Cir.1988); Boston Trading Group, Inc. v. Burnazos, 835 F.2d 1504, 1513-14 (1st Cir.1987). (Compare the "indubitable equivalent" provision of bankruptcy law. 11 U.S.C. Sec. 1129(b)(2)(A)(iii); In re James Wilson Associates, 965 F.2d 160, 172 (7th Cir.1992).) This implies, the defendants argue, that the only transfers reached by the statute are those made without consideration; and they claim that the transfers to them were supported by consideration and therefore that the receiver's suits must fail. We shall get to that, the central issue in these appeals, in a moment, but we must first consider whether receiver Scholes even had standing to bring the suits.
5
The argument that he did not is that he was "really" suing on behalf not of Douglas or Douglas's corporations, the perpetrator and tools of the Ponzi scheme, respectively, but of the investors, the purchasers of limited-partners interests in the corporations; and a receiver does not have standing to sue on behalf of the creditors of the entity in receivership. Like a trustee in bankruptcy or for that matter the plaintiff in a derivative suit, an equity receiver may sue only to redress injuries to the entity in receivership, corresponding to the debtor in bankruptcy and the corporation of which the plaintiffs are shareholders in the derivative suit. Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416, 92 S. Ct. 1678, 32 L. Ed. 2d 195 (1972); Steinberg v. Buczynski, 40 F.3d 890, 892 (7th Cir.1994); Schacht v. Brown, 711 F.2d 1343, 1346 n. 3 (7th Cir.1983); Boston Trading Group, Inc. v. Burnazos, supra, 835 F.2d at 1514-16. How, the defendants ask rhetorically, could the allegedly fraudulent conveyances have hurt Douglas, who engineered them, or the corporations that he had created, that he totally controlled and probably (the record is unclear) owned all the common stock of, and that were merely the instruments through which he operated the Ponzi scheme?
6
The answer--so far as the corporations are concerned, and we need go no further--turns out to be straightforward. The corporations, Douglas's robotic tools, were nevertheless in the eyes of the law separate legal entities with rights and duties. They received money from unsuspecting, if perhaps greedy and foolish, investors. That money should have been used for the stated purpose of the corporations' sale of interests in the limited partnerships, which was to trade commodities. Instead Douglas caused the corporations to pay out the money they received to himself, his ex-wife, his favorite charities, and an investor, Phillips, whom Douglas wanted to keep happy, no doubt in the hope that Phillips would invest more money in the Ponzi scheme or encourage others to do so. In the case of the ex-wife, the money went from the corporations first to Douglas and then from him to her, but we cannot see what difference that should make. If the money stopped with Douglas, a certain awkwardness might arise from the fact that Scholes is the receiver both for Douglas and for the corporations which would be suing him for that money. But that is not our case and we need not consider it.
7
The three sets of transfers removed assets from the corporations for an unauthorized purpose and by doing so injured the corporations. As sole shareholder, Douglas could lawfully have ratified the diversion of corporate assets to noncorporate purposes--but only if creditors were not harmed. Steinberg v. Buczynski, supra, 40 F.3d at 892; Dannen v. Scafidi, 75 Ill.App.3d 10, 30 Ill. Dec. 899, 903, 393 N.E.2d 1246, 1250 (1979). Creditors were harmed. The limited partners were tort creditors of the corporations from which they had been inveigled into buying limited-partner interests, and were, of course (other than Phillips), harmed. "It was not within the power of the shareholders to legalize this waste to the detriment of others." McCandless v. Furlaud, 296 U.S. 140, 160, 56 S. Ct. 41, 47, 80 L. Ed. 121 (1935) (Cardozo, J.).
8
Though injured by Douglas, the corporations would not be heard to complain as long as they were controlled by him, not only because he would not permit them to complain but also because of their deep, their utter, complicity in Douglas's fraud. The rule is that the maker of the fraudulent conveyance and all those in privity with him--which certainly includes the corporations--are bound by it. Getty v. Hunter, 166 Ill.App.3d 453, 116 Ill. Dec. 825, 827, 519 N.E.2d 1040, 1042 (1988); Peric v. Chicago Title & Trust Co., 89 Ill.App.3d 271, 44 Ill. Dec. 568, 411 N.E.2d 934 (1980). But the reason, of course, as the cases just cited make clear, is that the wrongdoer must not be allowed to profit from his wrong by recovering property that he had parted with in order to thwart his creditors. That reason falls out now that Douglas has been ousted from control of and beneficial interest in the corporations. The appointment of the receiver removed the wrongdoer from the scene. The corporations were no more Douglas's evil zombies. Freed from his spell they became entitled to the return of the moneys--for the benefit not of Douglas but of innocent investors--that Douglas had made the corporations divert to unauthorized purposes. McCandless v. Furlaud, supra, 296 U.S. at 159-61, 56 S. Ct. at 47; Texas & Pacific Ry. v. Pottorff, 291 U.S. 245, 260-61, 54 S. Ct. 416, 420, 78 L. Ed. 777 (1934); Southmark Corp. v. Cagan, 999 F.2d 216, 222 (7th Cir.1993). That the return would benefit the limited partners is just to say that anything that helps a corporation helps those who have claims against its assets. The important thing is that the limited partners were not complicit in Douglas's fraud; they were its victims.
9
Put differently, the defense of in pari delicto loses its sting when the person who is in pari delicto is eliminated. McCandless v. Furlaud, supra, 296 U.S. at 160, 56 S. Ct. at 47; Albers v. Continental Illinois Bank & Trust Co., 296 Ill.App. 596, 17 N.E.2d 67 (1938). Now that the corporations created and initially controlled by Douglas are controlled by a receiver whose only object is to maximize the value of the corporations for the benefit of their investors and any creditors, we cannot see an objection to the receiver's bringing suit to recover corporate assets unlawfully dissipated by Douglas. We cannot see any legal objection and we particularly cannot see any practical objection. The conceivable alternatives to these suits for getting the money back into the pockets of its rightful owners are a series of individual suits by the investors, which, even if successful, would multiply litigation; a class action by the investors--and class actions are clumsy devices; or, most plausibly, an adversary action, in bankruptcy, brought by the trustee in bankruptcy of the corporations if they were forced into bankruptcy. Concerning this last alternative, it is true that investors, including limited partners in a corporation's investment fund, are not contractual creditors of the corporation, Allen v. Amber Manor Apartments Partnership, 95 Ill.App.3d 541, 51 Ill. Dec. 26, 32, 420 N.E.2d 440, 446 (1981); In re Dutch Inn of Orlando, Ltd., 614 F.2d 504 (5th Cir.1980) (per curiam), any more than the corporation's stockholders are. But defrauded investors, as we have pointed out, are tort creditors. So Douglas's corporations were insolvent from the outset and could have been petitioned into bankruptcy. Corporate bankruptcy proceedings are not famous for expedition, however; and whatever advantages they may have over receiverships in a case such as this--if any, and none has been pointed out to us--are not ones that the defendants in these fraudulent conveyance actions should be heard to trumpet. Bankruptcy is for the protection of debtors and creditors, and so far as appears no debtors or creditors connected with Douglas's enterprise prefer the bankruptcy route to the receivership route.
10
We add that if in place of the receiver's actions the investors had brought a class action against the present defendants, or had sued them individually, the defendants would no doubt be arguing that the action was improper because the injury was to the corporations and only derivatively to investors in the corporations. Hammes v. AAMCO Transmissions, Inc., 33 F.3d 774, 777 (7th Cir.1994); Kagan v. Edison Bros. Stores, 907 F.2d 690 (7th Cir.1990); Manson v. Stacescu, 11 F.3d 1127, 1131 (2d Cir.1993).
11
We need not consider whether if Douglas had operated as a sole proprietorship rather than through corporations or other legally distinct entities, the receiver could still have maintained these suits. It could be argued, RICO-fashion, that the Ponzi scheme was a "Douglas enterprise" that Douglas caused to dissipate assets received by the enterprise for investment purposes. We need not decide how good an argument it is, and merely add that we can find no cases in which a receiver for a sole proprietorship recovered a fraudulent conveyance.
12
So these are proper suits and the next question is whether the transfers should be deemed to fall outside the statute because they were supported by sufficient consideration. Begin with the transfer to Phillips. He invested some $2.5 million in Douglas's scheme, all innocently we may assume, and by exceptional good fortune netted almost $300,000 on his investment. This profit, more precisely the expectation of this profit, was in consideration of Phillips's entrusting his money to Douglas's corporations. Douglas's ex-wife might be able to show that some of the transfers made to her were supported by consideration in the form of a discharge of Douglas's legal obligations to her--obligations of child support and the like arising from their divorce. In the case of the religious associations, which are charitable organizations, it may seem obvious that since charitable pledges are often found or deemed to be supported by consideration and therefore legally enforceable, Allegheny College v. National Chautauqua County Bank, 246 N.Y. 369, 159 N.E. 173 (1927) (Cardozo, J.); King v. Trustees of Boston University, 420 Mass. 52, 647 N.E.2d 1196 (1995); 1 E. Allan Farnsworth, Contracts Sec. 2.19 (1990), so must the actual donation to the charity. There is support for this proposition, Dunaway v. First Presbyterian Church, 103 Ariz. 349, 442 P.2d 93, 95 (1968), but only in the case, which this is not, where the donor is seeking to enforce a condition in his gift. A promise of a gift is a promise nonetheless, and so is a promise to the donor to abide by a condition in the gift; and the enforcement of promises is the office of contract law. The gift itself is not a promise, however; it is a gift. United States v. American Bar Endowment, 477 U.S. 105, 118, 106 S. Ct. 2426, 2433, 91 L. Ed. 2d 89 (1986).
13
The statute under which the receiver sued does not say that transfers supported by consideration are outside its reach. It does not have to. A transfer for full in the sense of commensurate consideration cannot (in the ordinary case, anyway) hinder, defraud, or otherwise discomfit creditors, because it is merely replacing one asset with another of equivalent value, as with revolving credit. The point is explicit in the new statute. It states in language virtually identical to the corresponding provision in the Bankruptcy Code, 11 U.S.C. Sec. 548(a)(2), that a transfer will be deemed fraudulent if the debtor made it "without receiving a reasonably equivalent value in exchange for the transfer." 740 ILCS 160/5(a)(2). The transfer must also, under the new statute as under the old, endanger the transferor's solvency. Gary-Wheaton Bank v. Meyer, 130 Ill.App.3d 87, 85 Ill. Dec. 180, 186, 473 N.E.2d 548, 554 (1984); 740 ILCS 160/5(a)(2)(A), (B). But that is not a serious issue here, as we shall see.
14
The requirement of full consideration is implicit in the old statute. Unless the challenged transfer involves a quid pro quo, there is no basis in the statutory language for placing the transfer beyond the statute's reach merely because there is consideration. Consideration and adequate (full, fair, commensurate) consideration are not synonyms. Although some Illinois cases, such as Till v. Till, 87 Ill.App.2d 358, 231 N.E.2d 641, 643 (1967), and Effingham State Bank v. Blades, 139 Ill.App.3d 259, 93 Ill. Dec. 764, 487 N.E.2d 431 (1985), suggest that a transfer not intended to deceive creditors is fraudulent only if the consideration for it is nonexistent or "grossly" inadequate, the state's highest court has said that inadequacy is enough. Gendron v. Chicago & North Western Transportation Co., 139 Ill. 2d 422, 151 Ill. Dec. 545, 553, 564 N.E.2d 1207, 1215 (1990). See also United States v. Kitsos, 770 F. Supp. 1230, 1235 n. 14 (N.D.Ill.1991) (interpreting Illinois law); Lewis v. Superior Court, 30 Cal. App. 4th 1850, 37 Cal. Rptr. 2d 63, 79 (1994); Leonardo v. Leonardo, 251 F.2d 22, 26 (D.C.Cir.1958).
15
We can make the distinction between consideration and full consideration perspicuous by noting that the requirement of consideration serves several purposes in the law of contracts, see Lon Fuller, "Consideration and Form," 41 Colum.L.Rev. 799 (1941), in particular a cautionary function of bringing home to the promisor the fact that his promise is legally enforceable and an evidentiary function, important in a legal regime that enforces oral contracts, of making it more likely that an enforceable promise was intended. One purpose the requirement does not serve, however, is identifying fair exchanges. Unless fraud or mistake is alleged, ordinarily a court will not even permit inquiry into the adequacy of the consideration for a promise or a transfer. E.g., Goodwine State Bank v. Mullins, 253 Ill.App.3d 980, 192 Ill. Dec. 901, 625 N.E.2d 1056, 1079 (1993); Curtis 1000, Inc. v. Suess, 24 F.3d 941, 945 (7th Cir.1994). Yet it is only when there is a fair exchange that a transfer which renders the transferor insolvent (or more insolvent) is harmless to his creditors.
16
What exactly is a fair exchange? Must the transferor at least break even on the exchange? Ordinarily he will do better than break even. No rational nonaltruist makes an exchange without thinking that it will make him better off; the phrase "the gains from trade" expresses the optimistic view that the normal voluntary exchange makes both parties better off. But this is not always true, especially in a setting of alleged fraud, where the defendant may have deliberately given more than he got in return.
17
To insist that the transferor be made no worse off by the exchange in order to avoid a finding of fraudulent conveyance could be criticized as doing violence to the structure of the statute. As was implicit in the old statute and is explicit in the new one, the statute reaches two kinds of fraud, traditionally called "fraud in fact" and "fraud in law" (sometimes "actual fraud" and "constructive fraud"). We have been discussing the second, in which the plaintiff is not required to prove fraudulent intent. If he does prove fraudulent intent, however, and thus "fraud in fact," then explicitly under the new statute as implicitly under the old the transfer is deemed fraudulent even if it is in exchange for "valuable" consideration. 740 ILCS 160/5(a)(1); Gendron v. Chicago & North Western Transportation Co., supra, 564 N.E.2d at 1214-15. There almost certainly was intent to defraud here on the part of Douglas and through him the corporations, but it is not the basis on which the receiver defends the judgment he obtained in the district court, except with regard to the transfers to the ex-wife, of which more later. If valuable consideration means full consideration, then even if there is intent to defraud there can be no harm to creditors, since the debtor's estate has not been depleted by a cent. So why is there a separate concept of fraud in fact? Why is not fraud in law both a necessary and a sufficient condition for finding a transfer fraudulent?
18
There are two answers. The first is evidentiary. If the plaintiff proves fraudulent intent, the burden is on the defendant to show that the fraud was harmless because the debtor's assets were not depleted even slightly. If the plaintiff takes the indirect route of proving fraud by proving a lack of full consideration, the burden of proof on the issue of incommensurability of consideration, and hence of the depletion of the debtor's assets, is on him. Cf. id. at 1215. Second, if fraudulent intent is proved, then, as we shall see, the defendant, unless he had no knowledge of the transferor's fraudulent intent, must return the entire payment that he received rather than just the amount by which it exceeded the consideration that he gave in exchange for the payment.
19
We shall come back to fraud in fact. Our present focus is on fraud in law. And here unless a fair in the sense of equal (or at least approximately equal) exchange is insisted upon, loopholes are opened in the fraudulent conveyance statute that can only be described as immoral--a relevant consideration, when we consider the equitable origins of the concept of fraud. We said that Phillips's profit was supported by consideration. But what was the source of the profit? A theft by Douglas from other investors. What then is Phillips's moral claim to keep his profit? None, even if the intent in paying him his profit was not fraudulent. Or less than none. For he argues (seemingly without realizing the implications of the argument) that by continuing to invest in Douglas's corporations he kept them going longer. Yes, and the longer a Ponzi scheme is kept going the greater the losses to the investors. Phillips was not only lucky; he was an unwitting accomplice of Douglas.
20
The injustice in allowing Phillips to retain his profit at the expense of the defrauded investors is avoided by insisting on commensurability of consideration. Phillips is entitled to his profit only if the payment of that profit to him, which reduced the net assets of the estate now administered by the receiver, was offset by an equivalent benefit to the estate. In re Independent Clearing House Co., 77 B.R. 843, 857-59 (D.Utah 1987). It was not. A profit is not offset by anything; it is the residuum of income that remains when costs are netted against revenues. The paying out of profits to Phillips not offset by further investments by him conferred no benefit on the corporations but merely depleted their resources faster.
21
It is no answer that some or for that matter all of Phillips's profit may have come from "legitimate" trades made by the corporations. They were not legitimate. The money used for the trades came from investors gulled by fraudulent representations. Phillips was one of those investors, and it may seem "only fair" that he should be entitled to the profits on trades made with his money. That would be true as between him and Douglas or Douglas's corporations. It is not true as between him and either the creditors of or the other investors in the corporations. He should not be permitted to benefit from a fraud at their expense merely because he was not himself to blame for the fraud. All he is being asked to do is to return the net profits of his investment--the difference between what he put in at the beginning and what he had at the end.
22
Douglas's ex-wife, to whose case we turn, may well have had some valid claims against her ex-husband. She had no entitlement to have those claims paid by the proceeds of fraud, as would be obvious if Douglas had picked someone's pocket and given the money found there to his ex-wife. But if she had had valid claims against Douglas equal to the amount of money he gave her, so that by giving it to her he received consideration in the form of a release of commensurate legal obligations to her, this would be adequate and not merely nominal consideration. There would be no net depletion of the estate administered by the receiver, which is the standard of adequacy as we have been articulating it.
23
The obvious objection to this reasoning is that the ex-wife's claims were claims against Douglas rather than against his corporations, and therefore the release of the claims did not benefit the corporations; they received no consideration for the money they paid out to her (via Douglas). The receiver makes nothing of this distinction, fundamental as it may seem to be. There probably are two reasons for this omission. The first is that the ex-wife's liability--she is a defendant, after all--depends in the first instance on what she gave up in exchange for the money she received rather than to whom that consideration (what she gave up) flowed. Second, the corporations may have been so far controlled by Douglas as to be his alter egos, and therefore (in the absence of other shareholders--an important qualification, elaborated below) liable for his debts. McCall Stock Farms, Inc. v. United States, 14 F.3d 1562, 1568-69 (Fed.Cir.1993); Zahra Spiritual Trust v. United States, 910 F.2d 240, 245 (5th Cir.1990). Lest the significance of this point be exaggerated, we add that the fact that the corporations were alter egos of Douglas would not affect the receiver's standing to bring these fraudulent conveyance suits. The corporations existed and were abused. They were so abused that Douglas's creditors might have been allowed to pierce the corporate veil and seize the corporations' assets pursuant to what is uncharmingly called the "reverse alter ego" theory of piercing the corporate veil. Direct piercing of the corporate veil occurs when creditors of the corporation are trying to reach the shareholder; reverse piercing occurs when creditors of the shareholder are trying to reach the corporation. Reverse piercing is ordinarily possible only in one-man corporations, since if there is more than one shareholder the seizing of the corporation's assets to pay a shareholder's debts would be a wrong to the other shareholders. Even in one-man corporations it is a rarity because a simple transfer of the indebted shareholder's stock to his creditors will usually give them all they could get from seizing the assets directly. But the only point that is important here is that reverse piercing of Douglas's corporate veils would not render the corporations incapable of being injured, and that is all that is necessary for these suits to be maintained by the receiver. The question is whether, because the corporations were Douglas's alter egos, they could be made liable for his debts, and we assume the answer is yes.
24
The objections to the ex-wife's claims lie elsewhere. One objection is the lack of evidence that they were worth what the corporations paid to discharge them. For obvious reasons, judges are particularly insistent upon proof of commensurability when they are dealing with intrafamilial transfers attacked as fraudulent conveyances. Kardynalski v. Fisher, 135 Ill.App.3d 643, 90 Ill. Dec. 410, 415, 482 N.E.2d 117, 122 (1985); United States ex rel. Hartigan v. Alaska, 661 F. Supp. 727, 729 (N.D.Ill.1987). Douglas's transfers to his ex-wife were lavish, and the principal "obligation" that they are claimed to have discharged was one created by a voluntary settlement that received no judicial scrutiny. Given the scale of the transfers and the family setting, it was the ex-wife's burden to prove that the consideration for the transfers she received was in fact adequate, commensurate. She failed to carry this burden.
25
There is a difference, though, between her situation and that of Phillips (and also, as we shall see, of the religious associations). Phillips is being asked to give back to the corporations the net amount by which the corporations' assets are smaller as a result of the payment to him of his profits. The ex-wife is being asked to give back all that she received from the corporations even if some of the receipts cancelled a debt that the corporations (as Douglas's alter egos, liable for his debts) owed her. Suppose the valid debt was $100, and she received $1,000; the receiver would be entitled only to $900, for the payment to her of the other $100 conferred a benefit equal to the cost by cancelling the debt of that amount. Snyder v. Partridge, 138 Ill. 173, 29 N.E. 851, 854 (1891); Reagan v. Baird, 140 Ill.App.3d 58, 94 Ill. Dec. 151, 157, 487 N.E.2d 1028, 1034 (1985). Given the legal obligation of child support in divorce cases, it is unlikely that the ex-wife had no valid claims at all. She was denied an opportunity to prove the amount of those claims. It is plain that the aggregate transfers made to her exceeded any plausible legal obligation that Douglas or the corporations could have had to her--and hence that the transfers were fraudulent--but we do not know by exactly how much.
26
This discussion shows that the district judge acted prematurely in granting summary judgment for the receiver against the ex-wife on a theory of "fraud in law" to the full extent of the money received by her. But the receiver, in his second objection to her claim, argues that we can affirm the district court on this point because there was "fraud in fact" as well as in law: Douglas caused the corporations to pay the ex-wife more than he owed her, in a deliberate effort, in which she was complicit, to defraud his and the corporations' other creditors. The evidence, though circumstantial, is strong, cf. Wilkey v. Wax, 82 Ill.App.2d 67, 225 N.E.2d 813, 816-17 (1967), but we do not think it is so strong that we can say as a matter of law that there was fraud in fact. Should the district court on remand find actual fraud, this would mean that the ex-wife is not entitled to keep any part of the money she received from the corporations--provided, we emphasize, that she knew or should have known of Douglas's fraudulent intent. Crawford County State Bank v. Marine American National Bank, 199 Ill.App.3d 236, 145 Ill. Dec. 224, 238-39, 556 N.E.2d 842, 856-57 (1990); Reagan v. Baird, supra, 487 N.E.2d at 1034; Second National Bank v. Jones, 309 Ill.App. 358, 33 N.E.2d 732, 736 (1941) (per curiam); Baldwin v. Short, 26 N.E. 928 (N.Y.1891); Peoples-Pittsburgh Trust Co. v. Holy Family Polish National Catholic Church, 341 Pa. 390, 19 A.2d 360 (1941); 740 ILCS 160/9(d). Inadequacy of consideration is not an element of fraud in fact, so that without full restitution the deterrent effect of the fraudulent conveyance law would be greatly weakened. We add that the ex-wife's claims against Douglas, to the extent supported by consideration, would not be extinguished by a finding of actual fraud (and her complicity); they would simply be thrown into the pool with the claims of the other creditors of the corporations, the assets of which would be augmented by the judgment against her. But she would lose the right to keep any part of the money she received out of the pool.
27
The suits against the religious corporations are the most troublesome, though not because of anything to do with consideration. If one thing is clear, it is that a gift to a charity (to anyone, for that matter) is not in exchange for full in the sense of commensurate consideration. Otherwise it would not be a gift, but an exchange. United States v. American Bar Endowment, supra, 477 U.S. at 118, 106 S. Ct. at 2433. This principle was applied to a conveyance challenged as fraudulent in Zahra Spiritual Trust v. United States, supra, 910 F.2d at 248-49.
28
A thief rushes into a church, and, unobserved by anyone, drops the money he has stolen from his victim into the collection plate. Does the church obtain good title as against the thief's victim? It does not. The case is only slightly more difficult if the "thief" obtained the money by fraud rather than by larceny. A theft cannot pass good title; most frauds can. E.g., Welch v. Cayton, 183 W.Va. 252, 395 S.E.2d 496 (1990). The fraudulent conveyance statute, however, would enable the owner to set aside the transfer to the church and recover the money. We do not think that anyone would quarrel with this result. What if, however, the owner does not discover his loss, or where his money has ended up, until the church has spent the money? Shall the church be forced to divert funds from its religious and other charitable activities because a donation that it received in good faith had a tainted source?
29
One of the religious corporations argues that an affirmative answer would violate the free-exercise clause of the First Amendment, made applicable to the states by the Fourteenth Amendment. The receiver responds that the constitutional issue, not having been raised in the district court, has been waived. The religious corporation points out that there are exceptions to the rule that issues not raised in the district court are waived on appeal. The only one conceivably applicable here is that pure issues of law if fully briefed on appeal will sometimes be addressed by the appellate court notwithstanding the appellant's failure to have raised them below. Amcast Industrial Corp. v. Detrex Corp., 2 F.3d 746, 749-50 (7th Cir.1993). The reason is that in the type of case put the failure to have raised the issue in the lower court will not have prejudiced the opposing party or shifted decisional authority improperly from the trial to the appellate court, since appellate review of pure issues of law is plenary--no weight is given to the lower court's ruling. But a case in which the issue waived is the constitutionality of a statute will rarely be a good candidate for actually applying this exception to the doctrine of waiver. Federal courts should not go out of their way to hamstring the work of legislatures. No doubt in general this principle of deference has diminished force when the challenged legislation has been repealed. But the Illinois fraudulent conveyance law that the religious corporation is challenging, although since repealed, has been replaced by one materially the same, as we have seen. The corporation argues that the old statute is unconstitutional because it has no exception for donations to religion. The argument would apply equally to the new statute, which contains no such exception either.
30
Federal courts are, or at least ought to be, especially reluctant to invalidate statutes on constitutional grounds by the use of procedural shortcuts, which in this case would involve not only skipping the district court but also denying the Attorney General of Illinois his statutory right to defend the Illinois statute. A district court is required in the case of a challenge to the constitutionality of a state or federal statute to certify the challenge to the state or federal attorney general, respectively, and allow that official an opportunity to intervene and defend the statute. 28 U.S.C. Sec. 2403; Max M. v. New Trier High School District No. 203, 859 F.2d 1297, 1300 (7th Cir.1988). That was not done here, because the constitutional issue was not raised in the district court. We shall not consider it.
31
The other religious bodies that are defendants in the receiver's fraudulent conveyance suits do not make a constitutional argument. But they do argue that the fraudulent conveyance statute should be interpreted to exclude gifts to religious groups and other charitable organizations, at least when as in this case the ultimate beneficiaries of the fraudulent conveyance suits, the investors in Douglas's Ponzi scheme, are themselves at fault. Only a very foolish, very naive, very greedy, or very Machiavellian investor would jump at a chance to obtain a return on his passive investment of 10 to 20 percent a month (the Machiavellian being the one who plans to get out early, pocketing his winnings, before the Ponzi scheme collapses). It should be obvious that such returns are not available to passive investors in any known market, save from the operation of luck. And on the other side, these religious corporations spent all the money they received from Douglas on religious and charitable activities. Most of the activities of the defendant religious corporations are missionary endeavors here and abroad, but included as well are earthquake relief in San Francisco and the construction of a chicken hatchery and a children's dormitory in Africa. Since all or virtually all of the corporations' revenues come from donations rather than from sales or other exchanges, they are more exposed to fraudulent conveyance actions than most other entities are; others are more likely to provide full consideration in exchange for the money they receive. At the oral argument of the appeals, concern was expressed, not wholly tongue in cheek, that if the district court's decision stands, charities will have to hold annual "fraud balls" at which they try to raise money to pay judgments in suits brought by persons who claim that some of the money donated to the charity had been obtained from these persons by a fraud or theft by the donor.
32
An alternative to "fraud balls" would be for charities to screen their donors, but this hardly seems feasible. Another alternative, feasible but costly, would be for charities to hold cash reserves against the possibility of having to disgorge some of their donations in response to claims of fraudulent conveyance. Liability insurance is a possibility, too, but only that. Although one cannot buy insurance against liability for deliberate fraud, the innocent recipient of a fraudulent conveyance is not itself guilty of fraud and so in principle ought to be able to buy insurance. It appears that such insurance is offered, though with limitations that may greatly reduce its value, and perhaps only for conveyances of real estate. See Lawrence D. Coppel & Lewis A. Kann, "Defanging Durrett; The Established Law of 'Transfer,' " 100 Banking L.J. 676, 677 n. 5 (1983). We do not know whether any religious groups carry such insurance. If not (as we suspect), the reason may be that the risk to such a group of being sued for the restitution of a fraudulent conveyance is very small, although it did materialize in this case.
33
The arguments for mitigating the full rigor of the fraudulent conveyance statute with respect to religious associations may be appealing but they are addressed to the wrong body. The statute makes no distinction among different kinds of recipient of fraudulent conveyances. Every kind is potentially liable. (This is true under the new statute as well.) The carving of exceptions is a task better left to the legislature. Statutory draftsmen might for example want to make distinctions based on the degree of negligence of the ultimate beneficiaries of the suit to set aside the fraudulent conveyance. They can do it better than a court can. They could of course authorize courts to engage in an ad hoc balancing of equities, as courts do for example in deciding whether a claim is barred by the equitable defense of laches; and perhaps in this case the balance would incline in favor of the charities. But nothing in the text or history of the Illinois statute or its counterparts in other states provides any purchase for this "interpretation," which would in fact be a radical rewriting of the statute. This is something that judges are understandably reluctant to do, especially when it is a state statute and federal judges.
34
The religious corporations have a more direct route to their goal. For they argue that the statute does not authorize a money judgment, but only an order--with which they could not comply, having spent the money--directing the rescission of the transfer. The argument is not persuasive. E.g., Tcherepnin v. Franz, 489 F. Supp. 43, 45 (N.D.Ill.1980) (interpreting Illinois law); Spaziano v. Spaziano, 122 R.I. 518, 410 A.2d 113, 115 (1980). If accepted it would cause recipients (not limited to charities) of gifts and other transfers potentially voidable under the fraudulent conveyance statute to spend the money immediately, in an effort (perhaps doomed anyway, cf. United States v. Ginsburg, 773 F.2d 798 (7th Cir.1985) (en banc)) to prevent tracing. The result would be the frustration of the statutory purpose.
35
The remaining issues mainly concern deficiencies in the record upon which the district judge based his conclusion that there was no genuine issue of material fact concerning the defendants' liability. To show that the transfers to the defendants were fraudulent within the meaning of the statute, the receiver had to show that, when each of the transfers was made, Douglas's corporations had creditors to hinder, defraud, and so forth and that the transfers jeopardized the corporations' solvency. The receiver also had to show that the money transferred to the defendants came from the corporations rather than from Douglas himself--for remember that the receiver is suing to recover corporate assets. The evidence on which the district judge relied consisted mainly of the criminal indictment against Douglas, his guilty plea and plea agreement, his deposition taken in the SEC's suit out of which the receivership arose, and the affidavit of an accountant who studied the books of the corporations and of Douglas himself.
36
The defendants point out that the indictment was inadmissible (an indictment is not evidence of the charges contained in it, any more than a complaint is), that the deposition was unsigned and contradicted by subsequent affidavits of Douglas, and that the accountant's affidavit was not notarized and (they argue) not based on the accountant's personal knowledge. But so what? Irregularities in evidence are material only when material facts are disputable and disputed; otherwise they are harmless error and can be ignored. New England Anti-Vivisection Society v. United States Surgical Corp., 889 F.2d 1198, 1204 (1st Cir.1989); Carter v. Western Reserve Psychiatric Habilitation Center, 767 F.2d 270, 273 n. 2 (6th Cir.1985). It is indisputable that when Douglas emerged from prison, where he had been serving a term for a previous fraud, in 1987, he had a negative net worth and that within a few months of modest lawful employment had launched his Ponzi scheme, to which his entire energies were devoted until its collapse; it was during this period that all the transfers to the defendants were made. Douglas's income during this period consisted almost entirely of money that he either withdrew from the corporations or earned on the money withdrawn. The corporations' money consisted either of money obtained from the fraudulent sale of limited partnerships or earnings on that money, and obviously any diversion of these fraudulently obtained assets to Douglas was improper. Any income that he obtained from these assets likewise belonged to the corporation from which he had wrongfully withdrawn them. The thief is not entitled to the interest or profits on the principal that he steals.
37
Although Douglas claims to have had some legitimate income, he has failed to specify source or amount, and we can safely assume that it was de minimis, that virtually all the money for the transfers came either directly or indirectly from assets that belonged to the corporation; and the transfers defrauded creditors consisting of the purchasers of the limited-partnership interests, who were tort creditors of the corporations. The fact that they did not know yet that they had been victimized did not detract from their status as tort creditors. Eby v. Ashley, 1 F.2d 971, 973 (4th Cir.1924); Rosenberg v. Collins, 624 F.2d 659, 664-65 (5th Cir.1980); In re Independent Clearing House Co., supra, 77 B.R. at 857. These claims of which the holders were not yet conscious made the corporations insolvent from the beginning. And, as we have seen, the transfers were not supported by adequate consideration.
38
Taken together, the facts just recited, most of which come right out of Douglas's plea agreement, which was admissible though hearsay, Fed.R.Evid. 803(22), and of which the district court properly took judicial notice under Fed.R.Evid. 201, see Green v. Warden, 699 F.2d 364, 369 (7th Cir.1983); Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236 (4th Cir.1989); Veg-Mix, Inc. v. U.S. Dept. of Agriculture, 832 F.2d 601, 607 (D.C.Cir.1987), established the defendants' liability (with the partial exception of the ex-wife). It is true that in affidavits submitted to the district court Douglas tried to backpedal from the admissions in his plea agreement. But just as an affidavit in which a witness tries to retract admissions that he made earlier in his deposition is normally given no weight in a summary judgment proceeding, Russell v. Acme-Evans Co., 51 F.3d 64, 67 (7th Cir.1995), so a witness should not be permitted by a subsequent affidavit to retract admissions in a plea agreement. Local 167 of Int'l Brotherhood of Teamsters v. United States, 291 U.S. 293, 54 S. Ct. 396, 78 L. Ed. 804 (1934); Hardin v. Aetna Casualty & Surety Co., 384 F.2d 718, 719 (5th Cir.1967) (per curiam). Admissions--in a guilty plea, Country Mutual Ins. Co. v. Duncan, 794 F.2d 1211, 1215 (7th Cir.1986), as elsewhere--are admissions; they bind a party; and the veracity safeguards surrounding a plea agreement that is accepted as the basis for a guilty plea and resulting conviction actually exceed those surrounding a deposition.
39
The only other issue in these appeals is whether the judgments should be reversed because the district judge received in the course of the proceedings a number of letters, which he described as "very sad," from investors in the Ponzi scheme. These letters had no bearing on the legal issues, and there is no indication that the district judge was swayed by them. Judges are not sequestered, and do not have to recuse themselves because someone not a party, but interested financially or otherwise in a litigation, writes something about the case which the judge reads. United States v. Hillsberg, 812 F.2d 328, 335 (7th Cir.1987); United States v. Burger, 964 F.2d 1065, 1069-70 (10th Cir.1992); State v. Bromwich, 213 Neb. 827, 331 N.W.2d 537, 541 (1983); cf. In re Larson, 43 F.3d 410 (8th Cir.1994). At some point receipt of unauthorized communications about a case might so affect the impartiality of the judge or the appearance of impartiality that he would have to recuse himself. United States v. Sciuto, 531 F.2d 842, 846 (7th Cir.1976). But that point is far from having been reached here.
40
The judgment of the district court is affirmed except for the summary judgment in the suit against the ex-wife and her husband, as to which further proceedings on remand are necessary.
41
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. | 01-03-2023 | 04-17-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1537980/ | 6 B.R. 329 (1980)
In the Matter of David Loren HURD, Debtor.
Bankruptcy No. 80-10689.
United States Bankruptcy Court, N.D. Indiana, Fort Wayne Division.
October 9, 1980.
Charles C. Rhetts, Jr., Garrett, Ind., for debtor, David Loren Hurd.
William J. Brutton, Fort Wayne, Ind., for trustee.
ORDER
ROBERT K. RODIBAUGH, Bankruptcy Judge.
Before the Court is the Chapter 13 Plan filed by debtor, David Loren Hurd. Filed on August 25, 1980, along with his petition for an order of relief, Hurd's plan proposes that no payments to creditors be made. In determining whether or not to confirm the debtor's plan, this Court must examine the facts of this particular case against the mandates of the Bankruptcy Code Section 1325[1] which provides that:
"(a) 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;
(2) any fee, charge, or amount required under chapter 123 of title 28, or by the plan, to be paid before confirmation, has been paid;
(3) the plan has been proposed in good faith and not by any means forbidden by law;
(4) the value, as of the effective date of the plan, of property to be distributed under the plan on account of each allowed unsecured claim is not less than the amount that would be paid on such claim if the estate of the debtor were liquidated under chapter 7 of this title on such date;
(5) with respect to each allowed secured claim provided for by the plan
(A) the holder of such claim has accepted the plan;
(B)(i) the plan provides that the holder of such claim retain the lien securing such claim; and
(ii) the value, as of the effective date of the plan, of property to be distributed under the plan on account of such claim is not less than the allowed amount of such claim; or
(C) the debtor surrenders the property securing such claim to such holder; and
(6) the debtor will be able to make all payments under the plan and to comply with the plan."
As a plasterer, the debtor's monthly salary is $600.00, with a gross income for the preceding year of $3,300.00. Although the debtor has listed his property as only his personal clothing and $300.00 cash, he claims both as exempt. The question before the Court is whether this Chapter 13 plan which proposes no payments to creditors fulfills the good faith requirement of Section 1325(a)(3). In answering this question the Court must examine the purposes and intendments of Chapter 13.
Chapter 13 of the Bankruptcy Code presents a distinct alternative to the liquidation process of Chapter 7. The House of Representatives has described the purpose of Chapter 13 as being "to enable an individual, *330 under court supervision and protection, to develop and perform under a plan for repayment of his debts over an extended period."[2] The policy behind these provisions was to ". . . encourage[s] more debtors to repay their debts over an extended period rather than to opt for straight bankruptcy liquidation and discharge."[3] The benefits to the debtor for repayment of debts via a Chapter 13 plan include the more liberal discharge provisions,[4] the ability of the debtor to retain his possessions,[5] and avoidance of the stigma attached to straight bankruptcy proceedings.[6]
The legislative intent that repayment will occur in Chapter 13 cases is reflected in various provisions of the Code. First, in order to be a debtor under Chapter 13, one must be an individual with a regular income.[7] An individual with regular income means one whose income is sufficiently stable and regular to enable payments to be made under Chapter 13.[8] Implicit in the regular income requirement is that payment of one's debts will be made: "Chapter 13 is designed to serve as a flexible vehicle for the repayment of part or all of the allowed claims of the debtor."[9] Repayment clearly is anticipated to be forthcoming from the regular income.
Section 1325(a)(6) also contemplates that some payments will be made. Since the Court is to approve a plan if "the debtor will be able to make all payments under the plan,"[10] it appears reasonable to conclude that if payments cannot be made, a plan cannot be confirmed.
Confirmation of a no-payment Chapter 13 plan would undermine Chapter 7 proceedings and would contravene the express intent of the legislature. As such, a no-payment plan abuses the provisions, purpose and the spirit of Chapter 13.[11] Although the Court has carefully considered the debtor's unfortunate circumstances, no effort has been made to repay any creditors. In lieu of an amendment to the debtor's plan, a Chapter 7 liquidation might be a more appropriate avenue. Although the term "good faith" has not been explicitly defined with reference to Chapter 13, a plan abusing the provisions, purpose and spirit of Chapter 13 is not proposed in good faith and therefore cannot be confirmed by this Court.[12] Confirmation of the debtor's plan is hereby denied.
SO ORDERED.
NOTES
[1] 11 U.S.C. § 1325.
[2] H.R.Rep. No. 595, 95th Cong., 1st Sess. 118 (1977), U.S.Code Cong. & Admin.News 1978, pp. 5787, 6079.
[3] Supra, 5.
[4] 11 U.S.C. § 1328.
[5] H.R.Rep. No. 595, 95th Cong., 1st Sess. 118 (1977), U.S.Code Cong. & Admin.News 1978, p. 6079.
[6] Supra.
[7] 11 U.S.C. § 109(e).
[8] 11 U.S.C. § 101(24).
[9] S.Rep. No. 989, 95th Cong., 2nd Sess. 141 (1978), U.S.Code Cong. & Admin.News 1978, p. 5927.
[10] 11 U.S.C. § 1325(a)(6).
[11] In re Hobday, 4 B.R. 417, 6 B.C.D. 469 (Bkrtcy., N.D.Ohio 1980).
[12] Accord, In re Iacovoni, 2 B.R. 256 (Bkrtcy., D.Utah, C.D.1980); In re Montano, 4 B.R. 535, 6 B.C.D. 487 (D.C.1980); In re Murallo, 4 B.R. 666, 6 B.C.D. 478 (Bkrtcy., Conn.1980). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/355323/ | 574 F.2d 985
Moses J. CHILEMBWE, Appellant,v.Donald WYRICK, Warden, Appellee.
No. 77-1963.
United States Court of Appeals,Eighth Circuit.
Submitted May 1, 1978.Decided May 8, 1978.
Moses J. Chilembwe, pro se.
John D. Ashcroft, Atty. Gen., and Robert L. Presson, Asst. Atty. Gen., Jefferson City, Mo., for appellee.
Before LAY, BRIGHT and ROSS, Circuit Judges.
PER CURIAM.
1
Moses J. Chilembwe appeals from the denial of his habeas corpus petition filed pursuant to 28 U.S.C. § 2254, attacking the legality of the revocation of his probation. We affirm.
2
Chilembwe pleaded guilty to first degree robbery in the Circuit Court of St. Louis County, Missouri, on March 30, 1973, and was sentenced to eight years imprisonment. Sentence was suspended and Chilembwe was placed on five years probation.
3
On October 1, 1974, Chilembwe's probation officer filed a violation report alleging that Chilembwe had violated four conditions of his probation by failing to obtain permission before leaving Missouri, failing to notify his probation officer of any change in his residence, using unprescribed narcotics, and failing to report regularly. On October 12, 1974, Chilembwe was arrested in Clark County, Nevada. He challenged extradition proceedings and was not returned to Missouri until March of 1975. On June 6, 1975, a probation revocation hearing was held, probation was revoked, and the sentence of imprisonment was executed.
4
In his habeas corpus petition Chilembwe challenged the jurisdiction of the Missouri state court to enter the order revoking his probation and contended that the revocation proceedings violated his rights to due process in several respects. The district court dismissed the petition.
5
On appeal Chilembwe raises only one allegation of error that merits discussion.1 He contends that he was denied due process of law because he did not receive a preliminary revocation hearing as required by the Supreme Court's holding in Gagnon v. Scarpelli, 411 U.S. 778, 93 S. Ct. 1756, 36 L. Ed. 2d 656 (1973). It is undisputed that Chilembwe requested a preliminary hearing sometime after his arrival in Missouri but did not receive one.
6
The fundamental purpose of a preliminary hearing is to determine whether there is probable cause to believe that the detained probationer has committed acts which violate the conditions of his probation. Cf. Morrissey v. Brewer, 408 U.S. 471, 485, 92 S. Ct. 2593, 33 L. Ed. 2d 484 (1972).2 This court holds that where obtaining permission before leaving the state is a condition of parole, a parolee's presence in another state without such permission is sufficient probable cause to believe he committed an act which constituted a violation of his parole such that a preliminary probable cause hearing is not required. Stidham v. Wyrick, 567 F.2d 836 (8th Cir. 1977). This precedent controls our decision here since there are no differences relevant to due process between parole revocation and probation revocation. See Gagnon v. Scarpelli, supra, 411 U.S. at 782, 93 S. Ct. 1756.
7
The judgment is affirmed.
8
LAY, Circuit Judge, concurring.
9
I concur in the result reached. I am satisfied preliminary cause was established for the revocation of Chilembwe's probation; however, the holding of a final revocation hearing may not justify the denial of a preliminary factual hearing to establish the existence of probable cause at the site of arrest of either a parolee or of an individual on probation.
10
In Stidham v. Wyrick, 567 F.2d 836 (8th Cir. 1977), we held that a preliminary hearing was not necessary to determine whether probable cause or reasonable grounds exists to find a parole violation when the parolee is found in another state contrary to the condition of his parole. I do not read Gagnon v. Scarpelli, 411 U.S. 778, 93 S. Ct. 1756, 36 L. Ed. 2d 656 (1973), or Morrissey v. Brewer, 408 U.S. 471, 92 S. Ct. 2593, 33 L. Ed. 2d 484 (1972), to hold, even under these circumstances, that a preliminary hearing is not needed. The purpose of the on-the-site hearing is to avoid the possibility of any mistake or misunderstanding which might arise and the concomitant hardship resulting from returning the parolee to prison. A parolee may be able to show mitigating circumstances which would alter the initial decision to revoke the parole. For example, the inability to notify the officer of a dire emergency or some misunderstanding by the parolee or officer might possibly be aired at the situs of arrest. The burden placed upon the authorities by Morrissey and Gagnon is not so great that their requirements could not be recognized at all times under all circumstances.
1
Moses J. Chilembwe continues to challenge the jurisdiction of the Missouri court to revoke his probation in light of his pending habeas corpus petition in the United States District Court for the District of Nevada. This contention is without merit. There is no doubt that once Chilembwe was before the Missouri court it had personal jurisdiction over him. See Bistram v. United States, 253 F.2d 610, 612 (8th Cir. 1958), quoted in Evans v. United States, 325 F.2d 596, 602 (8th Cir. 1963), cert. denied, 377 U.S. 968, 84 S. Ct. 1649, 12 L. Ed. 2d 738 (1964). Chilembwe does not challenge the state court's subject matter jurisdiction. His contention that the federal jurisdiction was obstructed or "usurped" by his removal to Missouri is frivolous since the Nevada federal court did exercise its jurisdiction
We have also reviewed Chilembwe's other due process contentions and find them to be without merit.
2
In Morrissey v. Brewer, 408 U.S. 471, 92 S. Ct. 2593, 33 L. Ed. 2d 484 (1972) the Supreme Court was dealing with a parole violation. However, the same principles apply to probationers. See Gagnon v. Scarpelli, 411 U.S. 778, 782, 93 S. Ct. 1756, 36 L. Ed. 2d 656 (1973) | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/3034424/ | FILED
NOT FOR PUBLICATION MAR 03 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
ADAKU E. ERONINI, No. 08-55929
Plaintiff - Appellant, D.C. No. 5:08-cv-00177-VAP-JCR
v.
MEMORANDUM *
JP MORGAN CHASE BANK NA; et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Virginia A. Phillips, District Judge, Presiding
Submitted February 16, 2010 **
Before: FERNANDEZ, GOULD, and M. SMITH, Circuit Judges.
Adaku E. Eronini appeals pro se from the district court’s order dismissing
for failure to state a claim her action alleging violations of the Real Estate
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
JK/Research
Settlement and Procedures Act (“RESPA”), 12 U.S.C. § 2601, et seq., and
California state law. We have jurisdiction under 28 U.S.C. § 1291. We review de
novo. Miller v. Yokohama Tire Corp., 358 F.3d 616, 619 (9th Cir. 2004). We
affirm.
The district court properly dismissed the action because Eronini suffered no
damages as a result of the alleged RESPA violation. See 12 U.S.C.
§ 2605(f)(1)(A) (allowing recovery of “actual damages”). We do not consider
arguments that Eronini presented for the first time on appeal. See Turnacliff v.
Westly, 546 F.3d 1113, 1120 (9th Cir. 2008).
Eronini’s remaining contentions are unpersuasive.
AFFIRMED.
JK/Research 2 08-55929 | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1554805/ | 36 So.3d 114 (2010)
SHELTON
v.
STATE.
No. 5D10-1137.
District Court of Appeal of Florida, Fifth District.
May 18, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/677062/ | 33 F.3d 747
UNITED STATES of America, Plaintiff-Appellee,v.Camilo TESTA, et al., Defendants-Appellants.
Nos. 92-2037, 92-2049 and 92-2526.
United States Court of Appeals,Seventh Circuit.
Argued May 10, 1994.Decided Aug. 17, 1994.
Daniel C. Murray, Asst. U.S. Atty., John Collins (argued), Office of U.S. Atty., Crim. Div., Chicago, IL, for U.S. in No. 92-2037.
Barry R. Elden, Asst. U.S. Atty., John Collins (argued), Office of U.S. Atty., Crim. Receiving, Appellate Div., Chicago, IL, for U.S. in No. 92-2249 and 92-2526.
David W. Gleicher, Chicago, IL, for Camilo Testa.
Elliott T. Price, Chicago, IL (argued), for Rudy Martinez.
Anita Rivkin-Carothers, Chicago, IL (argued), for Jose Paz.
Before COFFEY, MESKILL,* and RIPPLE, Circuit Judges.
MESKILL, Circuit Judge.
1
In these joint criminal appeals, the defendants-appellants, Camilo Testa, Rudy Martinez and Jose Paz, challenge their judgments of conviction, entered in the United States District Court for the Northern District of Illinois, Eastern Division, Shadur, J., after a jury trial, on the grounds that (1) their conspiracy convictions were not supported by sufficient evidence, and (2) they were prejudiced by the admission into evidence of a certain statement exculpating a codefendant. In addition, Paz challenges his sentence. Finding none of these contentions persuasive, we affirm the judgments.
BACKGROUND
2
The jury could reasonably have found the following facts from the evidence admitted at trial. Beginning some time in 1988, Testa, Martinez and Paz became involved in a cocaine distribution ring that was centered in Chicago and Minnesota. Martinez fronted cocaine to Cynthia Pluff in amounts ranging from about one to five kilograms per week. Pluff picked up the cocaine weekly in Chicago either from Martinez or from Testa, who worked for Martinez; on occasion, Testa delivered the cocaine to Martinez's residence while Pluff waited. After distributing the cocaine in Minnesota, Pluff paid Martinez, and they split the profits equally.
3
Paz supplied cocaine to Martinez and sometimes delivered cocaine to him while Pluff waited. Paz fronted the cocaine to Martinez, who paid Paz after Pluff had paid Martinez. When Pluff did not return promptly with the proceeds of the cocaine sales, Paz often became anxious for his money and insisted that Martinez call Pluff to tell her to pay more quickly. On many occasions, Martinez called Pluff or one of her associates to tell them of Paz's impatience.
4
Testa, who worked for Martinez, stored cocaine at his house, and either delivered it to Martinez when needed or Pluff picked up the cocaine from Testa's house. Testa also traveled to Minnesota on occasion to supply Pluff with additional cocaine, and he arranged for rental cars for Pluff's trips from Minnesota to Chicago. In addition, Testa helped to secure a "stash house" for the cocaine during the latter part of the conspiracy, and he sometimes took payment for the cocaine on behalf of Martinez.
5
Martinez, Paz and Testa were tried, along with three other codefendants, before a jury. The jury convicted Martinez of conspiracy to possess with intent to distribute and to distribute cocaine, in violation of 21 U.S.C. Sec. 846; engaging in a continuing criminal enterprise, in violation of 21 U.S.C. Sec. 848(a); two counts of distributing cocaine within one thousand feet of a school, in violation of 21 U.S.C. Secs. 841(a)(1) and 860; three counts of using a telephone in the commission of a narcotics felony, in violation of 21 U.S.C. Sec. 843(b); and engaging in interstate travel to facilitate the commission of a felony, in violation of 18 U.S.C. Sec. 1952(a)(1) and (a)(3). The court sentenced him principally to life in prison. The jury convicted Testa of conspiracy to possess and distribute cocaine, in violation of 21 U.S.C. Sec. 846; distributing cocaine within one thousand feet of a school, in violation of 21 U.S.C. Secs. 841(a)(1) and 860; and using a telephone in the commission of a narcotics felony, in violation of 21 U.S.C. Sec. 843(b). The court sentenced him principally to 135 months imprisonment. The jury convicted Paz of conspiracy to possess and distribute cocaine, in violation of 21 U.S.C. Sec. 846, and the court sentenced him principally to 192 months imprisonment.
DISCUSSION
I. Sufficiency of Evidence
6
The appellants first contend that the government adduced insufficient evidence of a single conspiracy, as was charged in the indictment, and established only that several distinct conspiracies had existed. The appellants thus assert that an impermissible variance existed between the indictment and the proof at trial. See United States v. Maholias, 985 F.2d 869, 874 (7th Cir.1993); United States v. Townsend, 924 F.2d 1385, 1389 (7th Cir.1991). Specifically, the appellants claim that the government failed to prove beyond a reasonable doubt that Paz had entered into a common agreement or had engaged in a concert of action with the other conspirators in the conspiracy to distribute cocaine in Minnesota, as alleged in the indictment. We are not persuaded.
7
To establish a conspiracy to possess with intent to distribute and to distribute cocaine under 21 U.S.C. Sec. 846, the government must prove that two or more persons entered into an agreement to possess and distribute cocaine. Moreover, to obtain the conviction of a particular defendant charged with conspiracy, the government must prove that that defendant was a party to the established agreement. See United States v. Collins, 966 F.2d 1214, 1219 (7th Cir.1992); United States v. Navarez, 954 F.2d 1375, 1380 (7th Cir.1992). In determining whether a defendant was a party to the conspiracy at issue, this Court has considered the existence of mutual dependence or mutual support among the defendant and members of the conspiracy as evidence suggesting that the defendant did, in fact, join the conspiracy. See Townsend, 924 F.2d at 1392.
8
A defendant asserting a variance claim will succeed in obtaining reversal of his conviction if he establishes that (1) the evidence was insufficient to support the jury's finding of a single conspiracy, and (2) he was prejudiced by the variance. See Collins, 966 F.2d at 1221; Townsend, 924 F.2d at 1390; see also Fed.R.Crim.P. 52(a). Although a variance claim is characterized as a challenge to the sufficiency of evidence supporting the defendant's conspiracy conviction, a showing of prejudice is nonetheless required to reverse a conviction on variance grounds because "[t]he crime of conspiracy focuses on agreements, not groups." Townsend, 924 F.2d at 1389. In order to convict the defendant of conspiracy, therefore, the government "need only prove that the defendant joined the agreement alleged," but need not establish the group of coconspirators with whom the defendant joined. Id.
9
Here, the evidence, viewed most favorably to the government, amply supported the jury's finding that Paz had entered into the conspiracy to possess cocaine with intent to distribute and to distribute cocaine in Minnesota. There was testimony that Paz had delivered cocaine to Martinez while Pluff, who distributed it in Minnesota, waited for him; that Paz did not receive payment for the cocaine he supplied to Martinez until after Pluff had sold it; that Paz had instructed Martinez on many occasions to call Pluff and Pluff's associates to tell them to accelerate the cocaine sales and to pay promptly for the fronted cocaine; and that Pluff had once received a two kilogram quantity of cocaine directly from Paz. Moreover, Pluff testified, with corroboration by one of her associates, that she had met Paz in Chicago and had asked him whether he had obtained additional cocaine for her, to which he replied that he had not, but that he was making some calls. Soon thereafter, two people arrived with cocaine. On the basis of this evidence, the jury could reasonably have concluded that Paz knew of the Minnesota cocaine connection and that his own success was tied to the success of that endeavor. The evidence thus formed an adequate basis for the jury's finding that Paz had joined the conspiracy to possess cocaine and to distribute it in Minnesota.
10
In a related claim, Paz contends that the government introduced insufficient evidence of his participation in the conspiracy. Specifically, Paz asserts, citing United States v. Martinez de Ortiz, 907 F.2d 629, 632 (7th Cir.1990) (en banc), cert. denied, 498 U.S. 1029, 111 S.Ct. 684, 112 L.Ed.2d 676 (1991), that all of the evidence of his participation derived from out of court statements of coconspirators and that such statements cannot alone support a conspiracy conviction.
11
In Martinez de Ortiz, this Court expressly reserved decision on whether a conspiracy conviction might be upheld if the only evidence of the defendant's participation in the conspiracy derives from coconspirators' out of court statements. Id. Although such statements are generally admissible, see Fed.R.Evid. 801(d)(2)(E); Maholias, 985 F.2d at 877-78, they might not have sufficient indicia of reliability to form the sole basis of a conviction. In this case, we need not resolve the question left open in Martinez de Ortiz, however, because, despite Paz's claims to the contrary, the evidence supporting his conspiracy conviction did not consist solely of coconspirators' out of court statements.
12
For example, Pluff herself testified at trial that, on at least five occasions, she had seen Paz deliver cocaine to Martinez for distribution by Pluff in Minnesota. Pluff also testified that, on at least ten occasions, she had observed Martinez pay Paz for the cocaine after she had paid Martinez. Additionally, Pluff testified that she had interacted directly with Paz on at least two occasions, on one of which he had supplied her with two kilograms of cocaine. Moreover, Drug Enforcement Administration agents testified that they had observed Paz going to and leaving Martinez's apartment on January 7, 1991. Thus, the evidence of coconspirators' out of court statements, and particularly the testimony about Martinez's phone calls to Pluff and others telling them that Paz was becoming anxious about getting his money, merely supplemented the eyewitness testimony about Paz's participation in the conspiracy.
13
Accordingly, we conclude that the government adduced sufficient evidence of Paz's participation and joinder in a single conspiracy to distribute cocaine in Minnesota to support the conspiracy convictions.
II. Admission of Statement Into Evidence
14
Testa, Martinez and Paz next contend that the district court abused its discretion by admitting into evidence a statement that Martinez had made during plea negotiations with the government. In the statement, which was admitted only as to codefendant Mario Gomez, Martinez asserted that Gomez had never driven to Minnesota with cocaine. Although the appellants' challenges to the admission of this statement differ somewhat, none of the claims has merit.
A. Martinez
15
Martinez contends that the admission of the statement into evidence was erroneous as to him for several reasons. First, he contends that the admission of the statement violated his Confrontation Clause rights, citing Bruton v. United States, 391 U.S. 123, 126, 88 S.Ct. 1620, 1622, 20 L.Ed.2d 476 (1968). There could be no Confrontation Clause violation, however, because the declarant of the statement was Martinez himself. Second, Martinez contends that admission of the statement violated Rule 410 of the Federal Rules of Evidence (also known as Rule 11(e)(6) of the Rules of Criminal Procedure). The Rule provides that statements made in the course of plea negotiations with a government attorney are inadmissible against defendants who participated in those negotiations. Because Gomez did not participate in Martinez's plea discussions, the Rule does not proscribe the statement's admission as to Gomez.
16
Third, Martinez argues that the admission of his statement regarding Gomez was improper because it will, in the future, chill plea negotiations between defendants and the government. As noted above, however, the statement at issue in this case was not admitted as to Martinez, but only as to Gomez. Martinez has given us no reason to believe that the integrity and efficacy of plea negotiations will suffer because of the possibility that statements made during those negotiations will be admitted as to other coconspirators.
17
Martinez next relies on a Second Circuit case, United States v. Serna, 799 F.2d 842 (2d Cir.1986), cert. denied, 481 U.S. 1013, 107 S.Ct. 1887, 95 L.Ed.2d 494 (1987), to argue that he was generally prejudiced by the admission of his statement. In Serna, at the joint trial of coconspirators Serna and Cinnante, Cinnante sought to introduce a statement made by Serna at Serna's plea negotiations, in which Cinnante had not participated. The statement was that Cinnante was the "wrong man." The Second Circuit upheld the district court's exclusion of this statement even though it was sought to be admitted only as to Cinnante and not as to Serna, the declarant. 799 F.2d at 849. The Court held that "if Cinnante had been allowed to introduce the statement into evidence there is a strong likelihood that the jury would have considered it as evidence against Serna. A limiting instruction would have been ineffective to protect Serna from the devastating impact of the statement that was tantamount to a confession." Id. (emphasis added).
18
The holding of Serna is inapposite here because, unlike the declarant of the statement at issue there, Martinez did not contest his complicity in the cocaine conspiracy. Thus, even if Martinez's statement about Gomez were properly characterized as "tantamount to a confession," it was not prejudicial to Martinez. Indeed, Martinez conceded to the jury during closing argument that he had been involved in the drug operation, and sought to contest only the charge of continuing criminal enterprise (CCE), focusing specifically on refuting the element of the CCE charge that he had been an organizer or supervisor. Accordingly, Martinez's reliance on the Serna case is misplaced.
19
Finally, Martinez argues that the admission of his statement about Gomez was prejudicial to his defense to the CCE charge, because the statement demonstrated that Martinez knew who was involved in the conspiracy and, therefore, that he was a supervisor or organizer. We are not persuaded that admission of the statement caused such prejudice to Martinez, however, because we do not believe that one who knows who is in the conspiracy is necessarily a supervisor of that conspiracy. In any case, the district court gave the jury a proper limiting instruction, which we have no reason to believe was ignored. See United States v. Soria, 965 F.2d 436, 441 (7th Cir.1992); United States v. L'Allier, 838 F.2d 234, 242 (7th Cir.1988); cf. Bruton, 391 U.S. at 132-33, 88 S.Ct. at 1625-26 (limited circumstance in which instruction to jury is deemed ineffective). Martinez's claim of prejudice thus fails.
B. Testa and Paz
20
Testa and Paz contend that the admission of Martinez's statement about Gomez was prejudicial to them because, by exculpating Gomez, it implicitly inculpated them. This argument is unpersuasive because it relies on the unsupported premise that, in a joint trial, evidence exculpating one codefendant inculpates the others by its failure to exculpate them. Indeed, as the government argues on appeal, trying coconspirators jointly would be nearly impossible if we were to adopt the implicit inculpation theory advanced by Testa and Paz, because all evidence that tended to exculpate fewer than all codefendants would be inadmissible. In any case, the court instructed the jury to consider Martinez's statement only as to Gomez, and Testa and Paz have given us no reason to believe that the jury could not follow this instruction.1 See Soria, 965 F.2d at 441; L'Allier, 838 F.2d at 242. Testa's and Paz's contention therefore fails.
21
Accordingly, we conclude that the district court did not abuse its discretion in admitting the evidence of Martinez's statement about Gomez.
III. Paz's Sentence
22
Finally, Paz challenges his sentence of 192 months imprisonment on the conspiracy count, which was based on a quantity of 50 to 150 kilograms of cocaine. Paz specifically contends that the district court erred in failing to make an express finding that such quantity of cocaine was reasonably foreseeable to him. We are not persuaded.
23
Pursuant to the relevant conduct provision of the United States Sentencing Guidelines, a sentencing court shall determine the appropriate offense level by considering "all acts and omissions committed or aided and abetted by the defendant, or for which the defendant would be otherwise accountable, that occurred during the commission of the offense of conviction." Guidelines Sec. 1B1.3.2 The commentary to Sec. 1B1.3 provides that, in cases of jointly undertaken criminal activity, conduct that is "neither within the scope of the defendant's agreement, nor ... reasonably foreseeable in connection with the criminal activity that the defendant agreed to jointly undertake" should not be considered in calculating the offense level. Guidelines Sec. 1B1.3, comment. (n. 1). The district court's findings of foreseeability are reviewed only for clear error. United States v. Goines, 988 F.2d 750, 775 (7th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 241, 126 L.Ed.2d 195 (1993), and cert. denied, --- U.S. ----, 114 S.Ct. 483, 126 L.Ed.2d 433 (1993), and cert. denied, --- U.S. ----, 114 S.Ct. 558, 126 L.Ed.2d 458 (1993).
24
Here, the district court found that a quantity of 50 to 150 kilograms of cocaine was reasonably foreseeable to Paz and assigned the appropriate offense level of 36. Guidelines Secs. 2D1.4, 2D1.1(c)(4). The district court made this determination after "conservative[ly]" estimating, on the basis of the evidence, that the conspiracy had involved 70 kilograms of cocaine in 1989 and 90 kilograms in 1990, for a total of 160 kilograms. Because the district court then found that Paz had not himself supplied all of that cocaine, it concluded that Paz could reasonably have foreseen 50 to 150 kilograms.
25
Our review of the record reveals that the district court's finding is amply supported, and it is of no consequence that the district court did not expressly refer to particular witnesses' testimony in making the finding. Among the pieces of evidence supporting the district court's finding is Pluff's testimony that, during the spring, summer and fall of 1989, she sold an average of three to four kilograms of cocaine each week and made at least twenty trips to Chicago to pick up the cocaine for distribution. There was also testimony that Pluff had distributed an average of two to three kilograms of cocaine per week during the summer and fall of 1990, as well as additional amounts during other parts of the year.
26
Moreover, the government adduced sufficient evidence that Paz was a primary supplier of cocaine during the spring, summer and fall of 1989 and during part of 1990. For example, there was evidence that Martinez had stated that Paz was his supplier, that Pluff had seen Paz deliver cocaine to Martinez and obtain payment from Martinez on many occasions, and that Martinez had called Pluff on almost a weekly basis to tell her of Paz's desire to be paid quickly.
27
In light of all of the evidence, the district court did not commit clear error in finding that Paz was a primary supplier of the cocaine distribution conspiracy and that he could reasonably have foreseen that the conspiracy involved approximately half the amount of cocaine that it in fact involved. Sentencing Paz on the basis of 50 to 150 kilograms of cocaine was thus proper.CONCLUSION
28
The judgments are affirmed.
*
Honorable Thomas J. Meskill, Senior Circuit Judge of the United States Court of Appeals for the Second Circuit, sitting by designation
1
Testa and Paz cite the following statement attributed to the district court in the transcript: "we credit juries improperly with the ability to follow careful instructions and the ability to do so carefully." (emphasis added). The government contends that this quoted statement is merely an erroneous transcription and that the district court used the word "properly," not the word "improperly."
We need not consider whether the court's statement was accurately recorded, however, because even if the district court uttered the quoted statement, such a statement, by itself, does not provide us with a reason that the jury would be unable to follow a particular instruction. The presumption that juries will follow instructions would not, therefore, be overcome. See Soria, 965 F.2d at 441; L'Allier, 838 F.2d at 242.
2
Because Paz was sentenced in May 1992, all references to the Guidelines are to the November 1991 version, which was in effect in May 1992 | 01-03-2023 | 04-17-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/693379/ | 51 F.3d 1158
Louis Anthony MANNA, Appellant,v.UNITED STATES DEPARTMENT OF JUSTICE; United StatesAttorney--District of New Jersey, Appellees.
No. 93-5662.
United States Court of Appeals,Third Circuit.
Submitted Under Third Circuit LAR 34.1(a)June 22, 1994.
Decided April 5, 1995.Rehearing Denied June 6, 1995.*
Louis Anthony Manna, Leavenworth, KS, pro se.
Michael Chertoff, U.S. Atty., Robert M. Hanna, Asst. U.S. Atty., Newark, NJ, for appellees.
Before: BECKER and HUTCHINSON, Circuit Judges, and JOYNER, District Judge.*
OPINION OF THE COURT
HUTCHINSON, Circuit Judge.
1
Pro se appellant, Louis Anthony Manna ("Manna"), appeals from a final judgment of the United States District Court for the District of New Jersey granting summary judgment in favor of appellees, the United States Department of Justice and the United States Attorney's Office--District of New Jersey (collectively "Government"). Manna, relying on the Freedom of Information Act ("FOIA"), 5 U.S.C.A. Sec. 552 (West 1977 & Supp.1994), seeks disclosure of all government documents referring to him, apparently in an effort to prove both his "innocence" and government misconduct during the criminal prosecution that resulted in his incarceration. Although it turned over some documents, the Government asserted that others were exempt from disclosure under various FOIA exemptions. The district court agreed and, in two separate opinions, granted the Government summary judgment. Manna v. United States Dep't of Justice, 815 F.Supp. 798 (D.N.J.1993); Manna v. United States Dep't of Justice, No. 92-1840 (D.N.J. August 25, 1993). Manna appeals the district court's decision with respect to those documents the Government claimed were exempted under sections 7(A), 7(C) and 7(D). 5 U.S.C.A. Secs. 552(b)(7)(A), (C), (D). We affirm.
I. Factual and Procedural History
2
Manna, presently confined in the United States Penitentiary at Leavenworth, Kansas, served for over eight years as "consigliere" under Vincent "Chin" Gigante in the powerful New Jersey faction of the "Genovese Crime Family" of "La Cosa Nostra" ("LCN"). The district court succinctly summarized the ruthless "business" activities the Genovese Crime Family routinely engages in, stating:
3
In the Northern New Jersey--New York Metropolitan area, the Genovese LCN Family has historically been one of the most powerful of the American Mafia criminal organizations. Today, the New Jersey contingent of the Genovese Family, through an entrenched network of racketeering operations, preys upon the transportation, shipping and construction industries. The Genovese LCN Family uses violence, intimidation and obstruction to further its organized criminal activities.
4
Manna, 815 F.Supp. at 802.
5
In 1989, a jury found Manna guilty, among other things, of RICO1 offenses involving predicate violations of the Hobbs Act (extortion) and Taft-Hartley Act (bribery), organized gambling and three separate murder predicates relating to the affairs of the Genovese Crime Family. The convictions for conspiracy to murder in aid of racketeering involved the planned murders of John and Gene Gotti, high-ranking members of the "Gambino Family," and the notorious murder of Irwin Schiff in August 1987. The district court sentenced Manna, then aged sixty, to eighty years imprisonment. We affirmed Manna's conviction without opinion in United States v. Manna, 919 F.2d 733 (3d Cir.1990) (table), cert. denied, 499 U.S. 949, 111 S.Ct. 1418, 113 L.Ed.2d 471 (1991).
6
In May 1991, Manna filed a FOIA request generally seeking "all records in reference to [him]self" and specifically "all records in regards to any electronic surveillance, whether legal or illegal" in the Government's possession. Manna desired to prove not only "government misconduct and wrongdoing" during his criminal trial, but also his "innocence."
7
On or about October 25, 1991, the Executive Office for United States Attorneys ("EOUSA") (the Justice Department division charged with processing FOIA requests sent to United States Attorneys' offices) turned over certain records to Manna. EOUSA refused to turn over other documents, relying upon various FOIA exemptions. On March 25, 1992, the Office of Information and Privacy affirmed EOUSA's decision. EOUSA provided additional documents on June 10 and September 30, 1992, but again refused to turn over others, claiming each fell within a FOIA exemption. The records provided were mainly pre-trial and trial transcripts.
8
On May 1, 1992, after exhausting his administrative remedies, Manna filed suit in the district court seeking declaratory and injunctive relief to compel disclosure of all documents in the Government's possession referring to him. On October 2, 1992, the Government moved for summary judgment. In support of its motion the Government filed: (1) the declarations of Robert C. Stewart, an Assistant United States Attorney for the District of New Jersey and Chief of the Strike Force Division; (2) the declarations of Virginia L. Wright, a supervisory paralegal specialist with EOUSA; (3) the declarations of Evelyn F. Bock, a paralegal specialist employed by the United States Attorney's Office for the District of New Jersey; (4) the declaration of Robert M. Hanna, an Assistant United States Attorney for the District of New Jersey; (5) the declaration of Marcus Williams, an Attorney-Advisor in the Employment Law and Information Branch of the Office of General Counsel for the Federal Bureau of Prisons; (6) the declaration and supplement thereto of Michael D. Turner, a Special Agent assigned to the Freedom of Information Management Division at the Federal Bureau of Investigation ("FBI") in Washington, D.C.; and (7) two other declarations under seal.2 Manna also submitted his own declaration in opposition to the Government's summary judgment motion and in support of his cross-motion for the same.
9
The district court, in a March 4, 1993, published opinion and an August 25, 1993, letter opinion, granted the Government's motion for summary judgment. Manna v. United States Dep't of Justice, 815 F.Supp. 798 (D.N.J.1993); Manna v. United States Dep't of Justice, No. 92-1840 (D.N.J. August 25, 1993). With respect to Exemption 7(A) (interference with law enforcement proceedings) the district court concluded that the Government had "submitted sufficient evidence that these documents are instrumental to proceedings anticipated in the near future" and, thus, are exempt as they could reasonably be expected to interfere with law enforcement proceedings.3 Manna, 815 F.Supp. at 808.
10
As to the documents relating to Exemption 7(C) (personal privacy) the district court determined that the privacy interest of the interviewees, informants, witnesses, victims and law enforcement personnel outweighed any public interest asserted by Manna. Id. at 809. The court, in fact, concluded that Manna never showed "any public interest" in the information, let alone a public interest that would outweigh the demonstrated privacy interests. Id.
11
With regard to documents the Government claimed fell within Exemption 7(D) (confidential law enforcement sources) the district court determined that the Government had met its burden, reasoning that "sources were given numbers to protect their identities and were expressly assured that their identities and the information they provided would be held in confidence by the FBI."4 Manna, No. 92-1840, slip op. at 17.
II. Jurisdiction and Standard of Review
12
The district court had subject matter jurisdiction under FOIA, 5 U.S.C.A. Sec. 552(a)(4)(B) and 28 U.S.C.A. Sec. 1331 (West 1993). We have appellate jurisdiction under 28 U.S.C.A. Sec. 1291 (West 1993).
13
In reviewing a grant of summary judgment in proceedings seeking disclosure under FOIA, we must first determine whether the district court had an adequate factual basis for its determination. McDonnell v. United States, 4 F.3d 1227, 1242 (3d Cir.1993); Patterson v. FBI, 893 F.2d 595, 600 (3d Cir.), cert. denied, 498 U.S. 812, 111 S.Ct. 48, 112 L.Ed.2d 24 (1990). To put the point differently, the appellate court
14
is to determine, from inspection of the agency affidavits submitted, whether the agency's explanation was full and specific enough to afford the FOIA requester a meaningful opportunity to contest, and the district court an adequate foundation to review, the soundness of the withholding.
15
McDonnell, 4 F.3d at 1242 (quoting King v. Dep't of Justice, 830 F.2d 210, 217-18 (D.C.Cir.1987)). If this Court concludes that the evidence presented a sufficient factual basis, we must then decide whether the district court's determinations were clearly erroneous. Id. Under the clearly erroneous standard, we " 'may reverse only if the findings are unsupported by substantial evidence, lack adequate evidentiary support in the record, are against the clear weight of the evidence or where the district court has misapprehended the weight of the evidence.' " Id. (quoting Lame v. Dep't of Justice, 767 F.2d 66, 70 (3d Cir.1985) ("Lame II ")). Of course, questions of law receive plenary review. Id.
III. FOIA
A. Overview
16
Congress enacted FOIA "to facilitate public access to Government documents." United States Dep't of State v. Ray, 502 U.S. 164, 173-74, 112 S.Ct. 541, 547, 116 L.Ed.2d 526 (1991). Without question, FOIA "reflect[s] 'a general philosophy of full agency disclosure[,]' " John Doe Agency v. John Doe Corp., 493 U.S. 146, 152, 110 S.Ct. 471, 475, 107 L.Ed.2d 462 (1989) (quoting Dep't of Air Force v. Rose, 425 U.S. 352, 360-61, 96 S.Ct. 1592, 1598-99, 48 L.Ed.2d 11 (1976)), to " 'ensure an informed citizenry, vital to the functioning of a democratic society.' " FBI v. Abramson, 456 U.S. 615, 621, 102 S.Ct. 2054, 2059, 72 L.Ed.2d 376 (1982) (quoting NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 98 S.Ct. 2311, 57 L.Ed.2d 159 (1978)). To this end, FOIA requires governmental agencies to make promptly available any records requested so long as the request " 'reasonably describes such records.' " Landano v. United States Dep't of Justice, 956 F.2d 422, 425 (3d Cir.) (quoting 5 U.S.C. Sec. 552(a)(3)), cert. denied, --- U.S. ----, 113 S.Ct. 197, 121 L.Ed.2d 139 (1992), vacated in part on other grounds, -- U.S. ----, 113 S.Ct. 2014, 124 L.Ed.2d 84 (1993).
17
There are, however, specific exemptions from disclosure set forth in FOIA itself. Indeed, "[d]espite these pronouncements of liberal congressional purpose," the Supreme Court teaches us that "the statutory exemptions are intended to have meaningful reach and application" and should not "be construed in a nonfunctional way." John Doe Agency, 493 U.S. at 152, 157, 110 S.Ct. at 475, 477-78. The Supreme Court reasoned:
18
"Congress realized that legitimate governmental and private interests could be harmed by release of certain types of information," and therefore provided the "specific exemptions under which disclosure could be refused." Recognizing past abuses, Congress sought "to reach a workable balance between the right of the public to know and the need of the Government to keep information in confidence to the extent necessary without permitting indiscriminate secrecy."
19
Id. at 152, 110 S.Ct. at 475 (quoting Abramson, 456 U.S. at 621, 102 S.Ct. at 2059) (other quotation and citation omitted).
20
Because FOIA creates a presumption favoring disclosure, the agency has the burden of showing that a statutory exemption applies. McDonnell, 4 F.3d at 1241. "The agency may meet this burden by filing affidavits describing the material withheld and detailing why it fits within the claimed exemption." Id. (citing King, 830 F.2d at 210). In McDonnell, we emphasized the purposes served by the affidavits and stated:
21
The significance of agency affidavits in a FOIA case cannot be underestimated. As, ordinarily, the agency alone possesses knowledge of the precise content of documents withheld, the FOIA requester and the court both must rely upon its representations for an understanding of the material sought to be protected.
22
Id. To facilitate review of the agency's actions, the government must submit detailed affidavits indicating why each withheld document falls within an exempt FOIA category and, if public disclosure of the information needed to reach the decision would frustrate the exemption, the government should submit sealed affidavits. See, e.g., Patterson, 893 F.2d at 599; American Friends Serv. Comm. v. Dep't of Defense, 831 F.2d 441, 444 (3d Cir.1987) ("[A]n agency is entitled to summary judgment if its affidavits describe the withheld information and the justification for withholding with reasonable specificity, demonstrating a logical connection between the information and the claimed exemption, and are not controverted by either contrary evidence in the record nor by evidence of agency bad faith.") (internal quotations and citation omitted).
B. Exemption 7
23
Exemption 7 generally applies to "records or information compiled for law enforcement purposes." 5 U.S.C.A. Sec. 552(b)(7). In John Doe Agency, the Supreme Court interpreted this language broadly to mean that the agency does not have to compile the documents initially for law enforcement purposes, so long as they are compiled for that purpose at the time the request for them is made. John Doe Agency, 493 U.S. at 155, 110 S.Ct. at 476-77. Thus, even if the government initially compiles the records for non-law-enforcement purposes after a request is made, but later transfers the documents to a law enforcement agency seeking to use them for law enforcement purposes, the documents satisfy this threshold requirement. See id. at 159-60, 110 S.Ct. at 478-79 (Stevens, J. dissenting). After establishing the threshold requirement, the government must still show that the record or information withheld falls within one of the six enumerated subsections of Exemption 7. See id. at 156, 110 S.Ct. at 477.
1. Exemption 7(A)
24
The district court permitted the Government to withhold numerous records under Exemption 7(A). 5 U.S.C.A. Sec. 552(b)(7)(A). This exemption authorizes the withholding of "records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information (A) could be reasonably expected to interfere with enforcement proceedings." Id. (emphasis added).5 To fit within Exemption 7(A), the government must show that (1) a law enforcement proceeding is pending or prospective and (2) release of the information could reasonably be expected to cause some articulable harm. See Robbins Tire & Rubber, 437 U.S. at 224, 98 S.Ct. at 2318; Abramson, 456 U.S. at 630, 102 S.Ct. at 2064 ("No other provision of FOIA could compensate for the potential disruption in the flow of information to law enforcement agencies by individuals who might be deterred from speaking because of the prospect of disclosure.").
25
Under this exemption, a court may also take into consideration the requestor's identity. See Robbins Tire & Rubber, 437 U.S. at 239-40, 98 S.Ct. at 2325-26; Grasso v. IRS, 785 F.2d 70, 76-77 (3d Cir.1986). In Grasso, we explained:
26
The usual rationale[s] given for [applying Exemption 7(A) ] is the danger of witness intimidation, the witness' desire to maintain confidentiality, and concern that premature disclosure would create a chilling effect on potential witnesses and dry up sources of information.
27
Id. at 76 (citing J.P. Stevens & Co., Inc. v. Perry, 710 F.2d 136, 143 (4th Cir.1983)).
28
Here, the district court concluded that the Government had "submitted sufficient evidence that these documents are instrumental to proceedings anticipated in the near future" and, thus, are exempt because they could reasonably be expected to interfere with law enforcement proceedings. Manna, 815 F.Supp. at 808. Manna complains, however, that he is only seeking records on himself concerning previous prosecutions. He further argues that, as he has been imprisoned since June 28, 1988, the statute of limitations has expired on crimes for which the government may think he was involved.
29
We reject Manna's arguments and see no basis to disturb the district court's sound decision. The district court correctly concluded that an exemption for materials relevant to these prosecutions relates not only to prosecutions against the person seeking the information, but also to prosecutions against anyone else. Moreover, the Stewart Declarations and the two sealed declarations provide ample support for the district court's finding that disclosure would interfere with prospective criminal and civil law enforcement proceedings involving the Genovese LCN Family and Manna. See Appellant's Appendix ("App.") at 145-172 pp 13-53; 292-308 pp 6-19; 353-354 pp 5-6. As noted by the district court:
30
A declaration filed under seal by [the Government] states that the declarant has read Mr. Stewart's October 2, 1992 declaration concerning Exemption 7 Materials ... [and] believes that more legal proceedings are forthcoming and believes that the Exemption 7(A) Materials "could reasonably be expected to interfere with law enforcement proceedings described in the Stewart Declaration." (November 19, 1992 Sealed Declaration at pp 7-10). In fact on Monday, February 1, 1993, a substantial criminal trial commenced before Judge Barry against several alleged powerful members of the Genovese LCN Family. See United States v. Lombardi, et al., Cr. 92-171.
Id.6
31
We find equally persuasive the district court's concern for those persons who have assisted or will assist law enforcement personnel in upcoming legal proceedings. Specifically, it stated:
32
The declarations explain that the LCN, specifically the Genevose LCN Family, has a long, sordid and bloody history of racketeer domination and exploitation. Plaintiff, although physically confined in a penitentiary, has not severed his ties to the Genovese Crime Family. Because the LCN is so violent and retaliatory, the names of interviewees, informants, witnesses, victims and law enforcement personnel must be protected. Everyone of the major LCN leadership level defectors in recent years has stated and/or testified that only slight suspicion is needed before deciding to kill a suspected informant. With very few exceptions, the mere accusation by a member in good standing is sufficient to precipitate the issuance of a death warrant from the hierarchy. Moreover, disclosure of FBI reports could result in a chilling effect upon potential cooperators and witnesses in organized crime enforcement investigations.
33
Id. In short, the Government's submissions adequately demonstrate that prospective criminal or civil (or both) proceedings are contemplated against Manna and other Genovese Crime Family members and, as a result, disclosure would harm these proceedings.
2. Exemption 7(C)
34
The district court also allowed the Government to withhold numerous records under Exemption 7(C). See 5 U.S.C.A. Sec. 552(b)(7)(C). This exemption authorizes the withholding of records or information compiled for law enforcement purposes to the extent that production of such records "could reasonably be expected to constitute an unwarranted invasion of personal privacy."7 Id. Exemption 7(C) also requires a balancing of the privacy interests at risk against the public interests, if any, that would be served by disclosure.8 Reporters Comm. for Freedom of the Press, 489 U.S. at 762, 109 S.Ct. at 1476; McDonnell, 4 F.3d at 1254.
35
We have held that law enforcement officers, interviewees and witnesses involved in criminal investigations, not just suspects, have a "substantial privacy interest" in non-disclosure of their names "because disclosure may result in embarrassment and harassment." McDonnell, 4 F.3d at 1255 (citing Landano, 956 F.2d at 426). These same individuals have a privacy interest in "not having their names revealed in connection with disclosure of the fact and subject matter of the investigation." Id. at 1256 (citing Landano, 956 F.2d at 426-27). Passage of time alone is not enough to erase this privacy interest, although the interest may become diluted with the passage of time. See id.
36
Manna appears to seek disclosure of the documents in an effort to prove, in a forthcoming 28 U.S.C.A. Sec. 2255 (West 1994) habeas petition, government misconduct during his criminal prosecution as well as his "innocence." He asserts that not only is his interest at stake, but also the public's interest in the administration of criminal justice and assuring that the innocent are not wrongfully convicted and confined. The alleged wrongdoing on the government's part includes illegal electronic surveillance, failure to turn over Brady material and deliberate alteration of words and the voices they are attributed to in intercepted conversations the government used at Manna's trial. Manna also asserts that the district court improperly took into account his identity when it applied Exemption 7(C).
37
The district court concluded that the Government met its burden of demonstrating that disclosure of certain information would harm the privacy interests of a variety of persons mentioned in the records (e.g., persons interviewed by the FBI and mentioned in the interview reports, as well as FBI personnel mentioned in the records). Manna, 815 F.Supp. at 808-10. The district court concluded that Manna failed to assert "any public interest" in the information, let alone a public interest that would outweigh the demonstrated privacy interests. Id. at 809. The district court stated:
38
Although the general rule is that neither the purpose for which the request is made nor the identity of the requester can determine whether documents should be disclosed, the facts in this case necessitate a departure from this general rule. I cannot overlook the fact that plaintiff has been sentenced to 80 years in prison for murder and his participation in organized crime as a leader within one of the most powerful organized LCN families in the nation. Indeed, the Third Circuit has recognized that a LCN Family counts on "its well founded reputation for achieving its objectives through violent means." Releasing the names of the people who assisted in the apprehension of organized crime participants would make the assistors unnecessarily vulnerable to possible harassment and retaliation.
39
Id. at 809-10 (internal citations omitted).
40
Again, we are in accord with the district court's findings. Although a court does not usually take a requester's identity into consideration, Manna's position in the hierarchy of a particularly influential and violent La Cosa Nostra family is highly material to the protection of individual privacy interests that Exemption 7(C) is meant to protect. Manna's complaints relating to government misconduct are unfounded. See Ray, 502 U.S. at 177-78, 112 S.Ct. at 549 (Exemption 6) ("Mere speculation about hypothetical public benefits cannot outweigh a demonstrably significant invasion of privacy.") Absent proof of misconduct, which is needed to justify invading the demonstrable privacy interests involved here, we "need not linger over the balance" because "something ... outweighs nothing every time."9 National Ass'n of Retired Federal Employees v. Horner, 879 F.2d 873, 879 (D.C.Cir.1989) (Exemption 6), cert. denied, 494 U.S. 1078, 110 S.Ct. 1805, 108 L.Ed.2d 936 (1990).
3. Exemption 7(D)
41
The district court relied upon Exemption 7(D) in permitting the Government to exclude other documents. See 5 U.S.C.A. Sec. 552(b)(7)(D). Exemption 7(D) authorizes the withholding of records or information compiled for law enforcement purposes to the extent that production of such records "could reasonably be expected to disclose the identity of a confidential source ... and in the case of a record or information compiled by criminal law enforcement authority in the course of a criminal investigation ... information furnished by a confidential source."10 Id.
42
The district court upheld the FBI's assertion of this exemption as to numerous FBI investigatory reports containing information from sources who were expressly assured confidentiality. See Manna, No. 92-1840, slip op. at 15-18. These documents and the relevant circumstances relating to Exemption 7(D) are described in the Supplemental Declaration of Michael D. Turner. See App. at 457.
43
Manna argues that the district court erred in applying the principles enunciated in United States Dep't of Justice v. Landano, --- U.S. ----, ----, 113 S.Ct. 2014, 2020, 124 L.Ed.2d 84 (1993). He argues it was error to assume that all sources were confidential merely because they had been assigned numbers and that the Government should have established that each source specifically furnished information with the understanding that the communication would not be divulged.
44
If a district court determines that a source provided information under an express assurance of confidentiality or under circumstances from which an assurance of confidentiality can reasonably be inferred, then all information provided by the source is protected. See Schmerler v. FBI, 900 F.2d 333, 338 (D.C.Cir.1990). Although Landano casts doubt on the validity of the concept of implicit confidentiality, see Landano, --- U.S. at ---- - ----, 113 S.Ct. at 2014-20, express assurances of confidentiality clearly meet the requirements of Exemption 7(D). See id. at ---- - ----, 113 S.Ct. at 2019-20. In this case the Government has shown, contrary to Manna's assertions, that law enforcement sources were given express assurances of confidentiality. See Supplemental Declaration of Michael D. Turner, App. at 465. Thus the information provided by them should be protected from disclosure.
IV. Conclusion
45
We will affirm the grant of summary judgment in favor of the Government.
46
BECKER, Circuit Judge, concurring in part and dissenting in part.
47
Judge Hutchinson has written a fine opinion and I agree with his disposition of the government's claim under Exemption 7(D) (Confidential Sources). But while I acknowledge the issues are quite close, I respectfully disagree with the majority's decision concerning the government's other claimed exemptions from the FOIA statute.
48
I. Exemption 7(A). (Interference with Enforcement Proceedings)
49
I acknowledge the importance of this exemption, but note that it applies only when release of the information "would produce the undesirable results specified," and, like the other FOIA exemptions, it is to be "narrowly construed." FBI v. Abramson, 456 U.S. 615, 630, 102 S.Ct. 2054, 2064, 72 L.Ed.2d 376 (1982). Manna submits that he requests only information pertaining to himself and that, having been confined for more than five years, the statute of limitations has expired as to him, and that this defeats the government's claim that disclosure would interfere with enforcement proceedings. As to the crimes for which prosecution is barred by the statute of limitations, it is hard to follow the government's argument, for the reasons set forth in the margin.1 But even assuming that we can look beyond such matters, the agency must certainly aver with sufficient specificity that some criminal proceeding against someone is reasonably imminent.
50
More specifically, I think it is insufficient that the agency may at some unspecified future point in time bring an enforcement proceeding. As I see it, the agency must be actively conducting an ongoing investigation, or should have a present intent to bring an enforcement proceeding in the reasonably specified future. See Mapother v. Department of Justice, 3 F.3d 1533, 1540 (D.C.Cir.1993) (holding that to invoke Exemption 7(A) the agency must show that their disclosure "(1) could reasonably be expected to interfere with (2) enforcement proceedings that are (3) pending or reasonably anticipated " (emphasis in original)). The government has not indicated that any such proceedings are in the works, but expects that they may be prosecuted "within the space of this decade." First Stewart Decl. p 33 (A 159-60). I do not think that a span of ten years is sufficient to defect a requestor's otherwise valid claim.
51
Manna also argues that he is only seeking records pertaining to his prior conviction, which are subject to the statute of limitations. Of course, insofar as those records could be used against other defendants as to whom the statute of limitations does not provide a safe haven (because they have committed at least one predicate act within the last five years), the government is correct in asserting that they cannot be released under Exemption 7(A). First Stewart Decl. p 13 (A 145). However, it is my view that the government must not only demonstrate (for each record) that its release would impede a prospective law enforcement proceeding that is viable, but also that it is impossible to redact the exempt information and release the other information. As I see it, the government might redact out that information in the documents which pertains to enforcement proceedings against other members of the Genovese LCN Family, but turn the rest over to Manna. I do not think the government has met that burden.2
52
In sum, I do not believe that the government has made the required showing that the production of the requested law enforcement records or information could be reasonably expected to interfere with enforcement proceedings which in turn requires a showing that (1) a law enforcement proceeding is pending or prospective and (2) release of the information could reasonably be expected to cause some articulable harm. See NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242, 98 S.Ct. 2311, 2327, 57 L.Ed.2d 159 (1978).
53
II. Exemption 7(C). (Unwarranted Invasion of Privacy)
54
I acknowledge that law enforcement officers, interviewees, and witnesses involved in criminal investigations, not just suspects, have a substantial privacy interest in non-disclosure of their names, "because disclosure may result in embarrassment and harassment." McDonnell, 4 F.3d at 1255 (citing Landano v. United States Dep't. of Justice, 956 F.2d 422, 426 (3d Cir.1992), vacated in part on other grounds, 113 S.Ct. 2014 (1993)). The interest encompasses disclosure of their names in connection with the subject matter of the investigation. See id. at 1256. Passage of time alone is not enough to erase this privacy interest, although the interest does diminish over time. See id. Moreover, the fact that a convict would like access to the names to interview the witnesses and informants for a collateral attack on his or her conviction directly implicates the witnesses' and informants' privacy interests. See Landano, 956 F.2d at 427.
55
Manna, however, repeatedly asserts that all he is seeking is the records with the names redacted. This constitutes a far lower threat of invasion of privacy unless, of course, someone could from the context make out the speaker, in which case the identifying information should also be redacted. See Landano, 956 F.2d at 426 (noting that individuals have an interest in "not having their names revealed in connection with disclosure of the fact and subject matter of the investigation" (emphasis supplied)); cf. Ray, 502 U.S. at 173-75, 112 S.Ct. at 547-48 (upholding the agency's disclosure of the subject of refugee interviews with the interviewees' names redacted because while disclosure of the personal interview information would constitute only a de minimis invasion of privacy, release of the accompanying names would make the privacy invasion significant, especially since the interviewees could be subject to government retaliation in their home country). Thus, by not considering the possibility (which Manna requested) of redacting the names of the individuals to protect their privacy, the district court, in my view, improperly considered the privacy interest involved in the balancing exercise, and thus it needs to reconsider its conclusions using the proper analysis.3
56
The Exemption 7(C) issue also implicates the question of the identity of the requester. The government, conceding that the court may not consider the requester's identity, disputes Manna's characterization that the court did so here, and contends that
57
a district court may consider all relevant facts in assessing the nature and extent of the invasion of privacy which result from disclosure. Such facts in this case include the ability and willingness of the violent, powerful and ongoing criminal institution, in which Mr. Manna held a leadership role, to harm or otherwise invade the privacy of, for example, persons it suspects of cooperation with law enforcement authorities.
58
Br. of Appellee at 22 n. 13. While I agree that this information is relevant under Exception 7(F), I disagree with the government that the threat of retaliation is a cognizable concern under Exemption 7(C). Retaliation has nothing to do with privacy, and, moreover, such a construction of Exemption 7(C) would eliminate the need for Exemption 7(F), violating the well known rule of statutory construction not to interpret language to render other language surplus verbiage. See Exemption 7(F) (referring to information which "could reasonably be expected to endanger the life or physical safety of any individual").
59
In any case, since the district court may have considered Manna's personal identity as the requester, rather than him as the subject matter of the request (which would equalize the analysis between all requesters), in its analysis, the district court should, in my view, reconsider the matter using the proper standard.
60
I would therefore affirm in part, reverse in part and remand for further proceedings.
*
Joyner, Circuit Judge, was limited to voting for panel rehearing
*
Hon. J. Curtis Joyner, United States District Judge for the Eastern District of Pennsylvania, sitting by designation
1
Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C.A. Sec. 1961 et seq. (West Supp.1994)
2
On February 15, 1994, we granted the Government's motion to supplement the appendix with the two declarations filed under seal
3
Without violating the sealing order, we think that the dissent fails fully to appreciate the specificity of parts of the two sealed declarations
4
The district court also held that other documents were exempt from disclosure under (1) Exemption 7(F) (endangerment of life or physical safety of law enforcement personnel), 5 U.S.C.A. Sec. 552(b)(7)(F); (2) Exemption 6 (personal privacy), 5 U.S.C.A. Sec. 552(b)(6); (3) Exemption 3 (statutorily exempt records, e.g., grand jury materials, Title III intercept materials and pen register materials), 5 U.S.C.A. Sec. 552(b)(3); and (4) Exemption 5 (common law privileges, e.g., attorney-client privilege, attorney work product and deliberative process privilege), 5 U.S.C.A. Sec. 552(b)(5). Manna, 815 F.Supp. at 810-16; Manna, No. 92-1840, slip op. at 4-11, 18. The district court also held that the Government's search for records responsive to Manna's FOIA request was adequate. Manna, 815 F.Supp. at 816-17. Further, the district court determined that the Government's submissions provided a sufficiently detailed basis for summary judgment and therefore were the functional equivalent of a Vaughn index. Id. at 817-18. See Vaughn v. Rosen, 484 F.2d 820 (D.C.Cir.1973), cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). Manna does not discuss these rulings in his brief on this appeal and accordingly any issues concerning them are waived. Rather, he focuses his arguments on Exemptions 7(A), (C) and (D), which we consider hereafter on their merits. With respect to Exemption 6, see also infra note 8
5
In 1986 Congress amended this exemption to relax significantly the standard for demonstrating interference with enforcement proceedings. The statute used to read "would interfere with." See Curran v. Dep't of Justice, 813 F.2d 473, 474 n. 1 (1st Cir.1987)
6
In this respect, see also supra note 3
7
This section formerly authorized withholding of such records if they "would constitute" a "clearly unwarranted" invasion of privacy. See United States Dep't of Justice v. Reporters Comm. for Freedom of Press, 489 U.S. 749, 756 & n. 9, 109 S.Ct. 1468, 1473 & n. 9, 103 L.Ed.2d 774 (1989)
8
In presenting his argument on Exemption 7(C) Manna refers briefly to Exemption 6, contending the two have similar underpinnings. Exemption 6 allows the government to withhold "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy." 5 U.S.C.A. Sec. 552(b)(6). In the district court Manna did argue directly that Exemption 6 was inapplicable because a relocated witness may have died. Manna, No. 92-1840, slip op. at 7. In its supplemental opinion the district court rejected this argument. Id. at 8. It relied on the Government's showing that a search of its records produced no evidence of the relocated witness's death. Id. We believe Manna's mere mention of an analogy between Exemption 6 and Exemption 7(C) is insufficient to raise this issue on appeal. To the extent Manna has not waived Exemption 6 we believe the district court's finding that the relocated witness may be alive is not clearly erroneous on this record. See also United States Dep't of State v. Washington Post Co., 456 U.S. 595, 599-602, 102 S.Ct. 1957, 1960, 72 L.Ed.2d 358 (1982)
9
Assuming that the failure to turn over alleged Brady documents involves some public interest, we are nevertheless satisfied that it is insufficient to outweigh the threatened privacy interests
10
We recognize an overlap between Exemptions 7(A) and 7(D) but conclude that here they provide independent grounds for denial of Manna's FOIA claims
1
The statute of limitations for two of the crimes the government relies on heavily, criminal RICO and obstruction of justice, both have a five-year statute of limitations. See 18 U.S.C. Sec. 3282. The statute of limitations generally begins to run when the crime has been completed. See Toussie v. United States, 397 U.S. 112, 115, 90 S.Ct. 858, 860, 25 L.Ed.2d 156 (1970). The leading case on the issue of completion of the crime, United States v. Persico, 832 F.2d 705, 713 (2d Cir.1987), cert. denied 486 U.S. 1022, 108 S.Ct. 1995, 100 L.Ed.2d 227 (1988), held that "the crime of RICO conspiracy is not complete until the purposes of the conspiracy either have been accomplished or abandoned." As to civil RICO claims, the statute of limitations is four years. See Agency Holding Corp. v. Malley-Duff & Assoc. Inc., 483 U.S. 143, 156, 107 S.Ct. 2759, 2767, 97 L.Ed.2d 121 (1987). Since Manna has been imprisoned for over five years, the government cannot be contemplating a RICO or obstruction of justice claim against him unless with respect to the RICO claim the government can show that Manna has committed a predicate act while in prison. Persico, 832 F.2d at 714 (concluding that "in order to satisfy the statute of limitations for section 1962(c), the government must demonstrate that a defendant committed at least one predicate racketeering act within the limitations period"). Manna argues there is no evidence in the record to establish this fact even though the agency had access to his visitation records, his mail, and his recorded telephone conversations. Br. of Appellant at 22. The government, of course, has the burden of showing that a FOIA exemption applied. However, the government's submissions are conclusory, lacking in both time frames and any details as to either criminal involvement by Manna or contact by him with LCN associates
2
I acknowledge that, with respect to this exemption, the identity of the requestor, does matter, Grasso v. IRS, 785 F.2d 70 (3d Cir.1986), but that is so only in limited respects. In dealing with this exception, the district court and the majority focus on the violence of the Genovese Crime Family. That fact would certainly be relevant under Exemption 7(F) (referring to information which "could reasonably by expected to endanger the life or physical safety of any individual"), 815 F.Supp. at 808, but it is hard to see its relevance to Exemption 7(A) except to the extent that the Family might harass, intimidate, or murder a potential victim in a reasonably anticipated proceeding. Similarly, the district court apparently was worried about a general "chilling effect upon potential cooperators and witnesses in organized crime enforcement investigations." 815 F.Supp. at 808. However, that concern is not a cognizable harm under Exemption 7(A); the exemption applies only to particular planned or pending law enforcement proceedings. As I stress infra, the district court and the majority arguably read Exemption 7(A) to swallow Exemption 7(D), and in effect to be broader than that exemption
3
I also question the district court's conclusion that Manna has asserted no public interest in release of the information. 815 F.Supp. at 809. Part of the reason Manna seeks the records is to discover whether the government withheld Brady material at his trial. We have stated that the "public at large has an important stake in ensuring that criminal justice is fairly administered; to the extent disclosure may remedy and deter Brady violations, society stands to gain." Ferri v. Bell, 645 F.2d 1213, 1218 (3d Cir.1981) (prisoner sought information to overturn a conviction) ("Although the motivation behind Ferri's request is ... personal, a FOIA request for material implicating the Brady rule simultaneously advances an 'indirect public purpose' satisfying the second prong of the test for disclosure under one of the privacy-based exemptions."), modified, 671 F.2d 769, 771 (3d Cir.1982) (per curiam) ("[T]he purpose of the remand is simply to determine whether a Brady claim exists that is sufficiently colorable so that the public interest in fair administration of justice warrants disclosure despite Exemption 7(c).")
As a rule, the public's interest in exposing government corruption and wrongdoing is the primary rationale for FOIA. See e.g., NLRB v. Robbins Tire & Rubber Co., 437 U.S. 214, 242, 98 S.Ct. 2311, 2327, 57 L.Ed.2d 159 (1978) ("The basic purpose of FOIA is to ensure an informed citizenry, vital to the functioning of a democratic society, needed to check against corruption and to hold the governors accountable to the governed.") Thus, I think that Manna may have a viable legal theory as to the facts. He avers that on December 21, 1986, "the New York Telephone Company removed a '189B Tek Com 88MH Load Com' from my telephone line." First Manna Decl. p 8 (A 192); Second Manna Decl. p 5 (A 334). The agency responds with evidence that on January 20, 1987, the district court ordered a pen register attached to Manna's lines. Sealed Hanna Decl. p 6 (SA 3-4). Given the discrepancy in the dates, it seems to me the district court should not have concluded in the agency's motion for summary judgment that no public interest was implicated by Manna's request. | 01-03-2023 | 04-17-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1421827/ | 622 S.E.2d 471 (2005)
276 Ga. App. 121
POPE et al.
v.
BOARD OF COMMISSIONERS OF FULTON COUNTY.
No. A05A1237.
Court of Appeals of Georgia.
October 27, 2005.
*472 Timothy Sweeney, James Robertson, Jr., Melana Kopman, Gretchen Holt, Owen, Gleaton, Egan, Jones & Sweeney LLP, Atlanta, for Appellants.
K. Prabhaker Reddy, Richard Gignilliat, James J. Park, Elarbee, Thompson, Sapp & Wilson, Atlanta, for Appellee.
PHIPPS, Judge.
The Board of Commissioners of Fulton County removed Webster Pope and Rita Lewis Devereaux ("Petitioners") from their positions on the county's Board of Tax Assessors for failure to comply with certain statutory duties. Petitioners sought review in the superior court, which affirmed the Board of Commissioners' decision. We granted Petitioners' application for discretionary review. They claim that there was no evidence that they failed to meet their statutory duties and that the Board of Commissioners violated their due process rights. Because Petitioners' own admissions support the Board of Commissioners' decision, we affirm.
Pope had been a member of the Board of Tax Assessors since 1980 and Lewis Devereaux had been a member since 1994. On November 20, 1998, the Board of Commissioners notified them in writing that it proposed to remove them from their positions for failing to perform certain statutory duties required of the Board of Tax Assessors. On November 23, the Board of Commissioners served Petitioners with a "Supplemental Notification" stating that they were entitled to a hearing, which would be held on December 2; that they could submit documentary evidence to the Board of Commissioners by December 1; that the Board of Commissioners would not receive any additional documentary evidence at the hearing; and that Petitioners *473 would be allowed to testify at the hearing for 20 minutes each.[1]
The November 23 letter also listed seven grounds for removal. Counts 1-5 alleged that Petitioners had not acted in a timely fashion to complete "revision[s] and assessment[s] of the returns of Fulton County taxpayers" or to prepare a completed Fulton County Tax Digest, as required by OCGA § 48-5-302, for the years 1993, 1995, 1996, 1997, and 1998. Count 6 alleged that Petitioners had neglected to "promptly review and dispose of outstanding real property appraisal appeals," resulting in a revenue shortfall for the county. Count 7 alleged that Petitioners had failed, for the year 1998, to "effectively and efficiently manage the functions and operations of the Board of Tax Assessors" by not acting in a timely manner to mail assessment change notices, begin review of tax assessment appeals, assess returns, and forward and file a completed tax digest. The November 23 letter attached several exhibits as evidence to support the charges against Petitioners.[2]
On December 1, Petitioners submitted an eight-page letter to the Board of Commissioners objecting to the procedures associated with the hearing and denying that there was any cause to remove them. On December 2, the hearing was held. The Board of Commissioners entered into evidence its November 23 letter and accompanying exhibits, as well as Petitioners' December 1 letter, and then Petitioners spoke on their own behalf. After the hearing, the Board of Commissioners removed Petitioners from the Board of Tax Assessors.
Petitioners sought from the Superior Court of Fulton County a writ of certiorari to review the Board of Commissioners' decision. The superior court granted the writ, but later dismissed the case because Petitioners had not named Fulton County as a defendant. We granted discretionary review and reversed, ruling that Fulton County was not an essential party.[3] The case was remanded to the superior court, which affirmed the Board of Commissioners' decision to remove Petitioners from the Board of Tax Assessors.
The court found that the Board of Commissioners had not submitted evidence at the hearing sufficient to prove any of the counts against Petitioners. Nevertheless, the court found that, in their December 1 letter to the Board of Commissioners, Petitioners had acknowledged their failure to comply with OCGA § 48-5-302. Accordingly, the court concluded that the Board of Commissioners had cause to remove them. The court also concluded that although the procedures afforded to Petitioners were "minimal," additional safeguards "would not have saved Petitioners from the consequences of their own admissions."
Petitioners argue that, contrary to the superior court's finding, their December 1 letter did not admit any failure to comply with statutory duties. They also contend that they were denied due process.
1. When Petitioners were removed from the Board of Tax Assessors, OCGA § 48-5-295(b) provided that a county governing authority could remove a member of the county's Board of Tax Assessors "only for cause shown for the failure to perform the duties or meet the qualifications imposed upon him by law."[4] In Kirton v. Biggers,[5] we held that *474 failure to comply with a statutory duty constituted "cause" for removal, regardless of the reasons for noncompliance.[6] We also noted that the county governing body has wide latitude in determining whether there is cause for removal:
The board of commissioners, as the appointing authority of the board of tax assessors, necessarily has a certain discretion as to the level of performance which it is willing to tolerate. As long as no abuse of such discretion is shown, this court should not substitute its findings of fact or construction of the evidence for that of the governmental body having appointing and removal powers.[7]
On appeal, we review the record to determine whether it supports the county governing authority's decision.[8] We will uphold the decision if there is any evidence to support it.[9]
The statute that Petitioners were charged with violating, OCGA § 48-5-302, provides as follows:
Each county board of tax assessors shall complete its revision and assessment of the returns of taxpayers in its respective county by July 1 of each year, except that, in all counties providing for the collection and payment of ad valorem taxes in installments such date shall be June 1 of each year. The tax receiver or tax commissioner shall then immediately forward one copy of the completed digest to the commissioner for examination and approval.[10]
We agree with the superior court that Petitioners' letter to the Board of Commissioners essentially admitted their failure to comply with this statute. As Petitioners point out, one passage in their letter stated that "[t]he tax assessor is responsible for the timely revision and assessment of returns of Fulton County taxpayers, and those duties were timely completed and there is no evidence to the contrary." Other portions of the letter, however, contained at least tacit admissions that Petitioners did not complete their revisions and assessments by the statutory deadline.
For example, the letter stated that "[t]here is no way anyone could have had an approved digest prior to tax billing in early July [1998] with the 32,000 appeals that were filed...." The letter also argued that OCGA § 48-5-302 imposes a "directory duty only," that Petitioners could not believe that the Board of Commissioners wanted them to complete hasty appraisals and rush through pending assessment appeals "just to meet a directory law," and that the Board of Commissioners "has never directed the Board of Assessors to meet the requirements of O.C.G.A. § 48-5-302." In addition, the letter stated:
Taken in isolation, this law [OCGA § 48-5-302] would not appear to be much of a problem, but taken in the context of the entire system of laws, which make up the assessment administration system, this law is impossible. It is not simply a matter of too much work or not enough people. It is not a law that is merely difficult with which to comply; we perform difficult tasks all the time. It is not a matter that smarter people or better managers could comply. Within the current legal framework, it is impossible to comply.[11]
*475 Finally, the letter claimed that "over the past ten years, no county in the state of Georgia has submitted a digest by June 1st. Fulton County was the last county to submit by June 1st in 1988." These implicit acknowledgments constitute "some evidence" that Petitioners failed to comply with OCGA § 48-5-302 and therefore establish cause for their removal.
Petitioners argue that the acknowledgments in the letter were alternative arguments that would become relevant only if the Board of Commissioners did not accept their primary argument that they had, in fact, met the statutory deadline. But the letter stated, among other things, that it was "impossible" to comply with OCGA § 48-5-302 and that no county, including Fulton, had done so since 1988. These sweeping avowals could not coexist with a claim that Petitioners had met the deadline.
Petitioners also argue that they did not have to comply with OCGA § 48-5-302 because the Supreme Court of Georgia has held in a series of cases that the statutory deadline is "directory only."[12] But those cases simply held that county boards of tax assessors are not "deprive[d] of power" or "impotent to perform their duties" after the deadline has passed.[13] The cases did not hold that the deadline is optional and may be disregarded at the tax assessors' discretion.[14] And in Cashin v. Hardman,[15] we ruled that tax assessors may be removed for failing to comply with OCGA § 48-5-302, even though the deadline may be "directory."[16]
2. Petitioners also assert that the procedures used by the Board of Commissioners to remove them from office violated their due process rights. They claim that the Board of Commissioners submitted no competent evidence to support its charges, improperly shifted the burden to them to disprove the charges, and did not permit them adequate time to prepare or present a defense. The superior court did not decide these issues. It reasoned that, in light of Petitioners' implicit admission that they had not met the statutory deadline, no additional process would have changed the outcome.
We find no evidence that Petitioners were harmed by the procedures of which they complain. An appellant must show not only error, but also harm, to prevail on appeal.[17] Petitioners took advantage of their opportunity to present a defense to the Board of Commissioners: they submitted a detailed letter explaining that while they had failed to meet the statutory deadline, their noncompliance was excusable for various reasons, including interference by certain commissioners. That letter was placed into evidence at the hearing, and Petitioners were permitted to further develop their defense through their own testimony. Thus, the record indicates that the Board of Commissioners considered Petitioners' defense, but rejected it. Petitioners do not indicate what additional evidence, if any, they would have presented had they been afforded more time to prepare.[18] Accordingly, we find no reversible error.
Judgment affirmed.
ANDREWS, P.J., and MIKELL, J., concur.
NOTES
[1] The Board of Commissioners also gave notice to, and ultimately removed, the third member of the Board of Tax Assessors, Vermeka Fairrow. Although Fairrow initially protested her removal, she did not join Petitioners in seeking review of the Board of Commissioners' decision and is not a party to this appeal.
[2] The exhibits included: (1) five previous orders of the Superior Court of Fulton County authorizing, pursuant to OCGA § 48-5-310, the temporary collection of taxes for the years 1993, 1995, 1996, 1997, and 1998, pending completion of a finalized tax digest for those years; (2) a transcript from a March 1998 Board of Commissioners meeting at which the commissioners questioned Petitioners about their plans for completing assessments that year; and (3) a 1998 Comprehensive Reappraisal Plan submitted by Petitioners to the Board of Commissioners; (4) minutes from a November 1998 Board of Commissioners meeting; and (5) a memo from the Fulton County Manager to Petitioners recommending changes in the assessment appeal process.
[3] Pope v. Bd. of Commrs. of Fulton County, 248 Ga.App. 201, 546 S.E.2d 333 (2001).
[4] OCGA § 48-5-295(b) has since been amended to provide, among other things, that a member of the county Board of Tax Assessors may not be removed during his term of appointment "until [he] has been afforded an opportunity for a hearing before the judge of the superior court of the county for recommendations by the judge of the superior court to the county governing authority regarding such removal."
[5] 135 Ga.App. 416, 218 S.E.2d 113 (1975).
[6] Id. at 419(3), 218 S.E.2d 113.
[7] Id.
[8] Swafford v. Dade County Bd. of Commrs., 266 Ga. 646, 648(6), 469 S.E.2d 666 (1996), citing Emory Univ. v. Levitas, 260 Ga. 894, 898(1), 401 S.E.2d 691 (1991).
[9] See Emory Univ. v. Levitas, 260 Ga. at 897, 401 S.E.2d 691.
[10] Before January 1, 1998, OCGA § 48-5-302 required the county Board of Tax Assessors to complete its revision and assessment of returns "by June 1 of each year, except that, in counties having a population of not less than 81,300 nor more than 89,000 ..., the county board of tax assessors shall complete its revision a assessment of the returns of taxpayers by April 15 of each year."
[11] (Emphasis supplied.)
[12] See Colvard v. Ridley, 219 Ga. 361, 363-364(1)(e), 133 S.E.2d 364 (1963); Sauls v. Winters, 215 Ga. 515, 517, 111 S.E.2d 41 (1959); Garr v. E.W. Banks Co., 206 Ga. 831, 832(5), 59 S.E.2d 400 (1950).
[13] Garr, supra.
[14] See Allen v. Norris, 148 Ga.App. 261, 263(3), 251 S.E.2d 145 (1978).
[15] 223 Ga.App. 301, 477 S.E.2d 433 (1996).
[16] Id. at 302-303(1), 477 S.E.2d 433; see also Kirton v. Biggers, supra at 418(2), 218 S.E.2d 113; Allen v. Norris, supra.
[17] In the Interest of A.D.L., 253 Ga.App. 64, 66(1), 557 S.E.2d 489 (2001).
[18] See In the Interest of T.N.T., 258 Ga.App. 396, 399, 574 S.E.2d 444 (2002). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/869754/ | GLD-243 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 13-1266
___________
IN RE: CAROLE L. TAYLOR,
Appellant
____________________________________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil No. 2:12-cv-01846)
District Judge: Honorable Arthur J. Schwab
____________________________________
Submitted for Possible Summary Action Pursuant to
Third Circuit LAR 27.4 and I.O.P. 10.6
May 16, 2013
Before: FUENTES, FISHER and VANASKIE, Circuit Judges
(Opinion filed: May 24, 2013)
_________
OPINION
_________
PER CURIAM
Carole Taylor, proceeding pro se, appeals from the District Court’s January 10,
2013 order, which denied her requests for recusal and a stay, and dismissed her
bankruptcy appeal for lack of jurisdiction. For the reasons that follow, we will
summarily affirm.
I.
Since 2010, Taylor has been embroiled in various proceedings in the United States
Bankruptcy Court for the Western District of Pennsylvania. In 2011, Ronda Winnecour,
the Chapter 13 Trustee who has been involved in those proceedings, filed an adversarial
action in the Bankruptcy Court against Taylor and other defendants. On October 24,
2012, the Bankruptcy Court dismissed that action as moot in light of a settlement
agreement approved earlier that year.
Taylor, believing that she had been wronged, appealed from the Bankruptcy
Court’s October 24, 2012 decision. Although the deadline for appealing from that
decision was November 7, 2012, see 28 U.S.C. § 158(c)(2); Fed. R. Bankr. P. 8002(a),
Taylor did not file her notice of appeal until November 21, 2012. Thereafter, Winnecour
moved to dismiss the appeal, arguing, inter alia, that the appeal was untimely. Taylor,
meanwhile, moved to recuse the presiding District Judge – the Honorable Arthur J.
Schwab – and also filed a “Motion Urgent Open Certain for Supercedeas [sic] Injunction
(Stay),” requesting “an Immediate STAY Pending appeal.” On January 10, 2013, the
District Court denied Taylor’s motions and granted Winnecour’s motion to dismiss. In
doing so, the District Court concluded that Taylor’s notice of appeal was untimely and
that, as a result, the court lacked jurisdiction to consider her appeal.
Taylor now seeks review of the District Court’s judgment.
2
II.
We have jurisdiction over Taylor’s appeal from the District Court’s judgment
pursuant to 28 U.S.C. §§ 158(d) and 1291. We exercise de novo review over the District
Court’s determination that it lacked jurisdiction to consider her bankruptcy appeal. See
In re Caterbone, 640 F.3d 108, 111 (3d Cir. 2011). We review the District Court’s denial
of her motion to recuse, as well as that court’s denial of her stay motion, for abuse of
discretion. See Securacomm Consulting, Inc. v. Securacom Inc., 224 F.3d 273, 278 (3d
Cir. 2000) (reciting standard for reviewing denial of recusal motion); Jackson v. Danberg,
656 F.3d 157, 162 (3d Cir. 2011) (reciting standard for reviewing denial of stay motion).
For substantially the reasons provided by the District Court, the denial of Taylor’s
motion to recuse did not constitute an abuse of discretion. Furthermore, Taylor has not
demonstrated that the District Court abused its discretion when it denied her motion for a
stay. Finally, for substantially the reasons provided by the District Court, we agree that
Taylor’s bankruptcy appeal was untimely and that, as a result, the District Court lacked
jurisdiction to consider it. See Caterbone, 640 F.3d at 111-12 (citing, inter alia, 28
U.S.C. § 158(c)(2) and Bowles v. Russell, 551 U.S. 205, 209 (2007)). That jurisdictional
defect bars not only the District Court, but also us, from reviewing the merits of Taylor’s
bankruptcy appeal. See Caterbone, 640 F.3d at 113.
Because Taylor’s appeal from the District Court’s judgment does not present a
substantial question, we will summarily affirm that judgment. See 3d Cir. I.O.P. 10.6.
3 | 01-03-2023 | 05-24-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/869770/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-4801
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
JONATHAN NOL-TERRON, a/k/a Ariel Molina Hernandez,
Defendant - Appellant.
Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. William L. Osteen,
Jr., Chief District Judge. (1:12-cr-00113-WO-2)
Submitted: April 29, 2013 Decided: May 24, 2013
Before NIEMEYER, KING, and KEENAN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Todd Allen Smith, LAW OFFICE OF TODD ALLEN SMITH, Graham, North
Carolina, for Appellant. Ripley Rand, United States Attorney,
Michael F. Joseph, Assistant United States Attorney, Greensboro,
North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Jonathan Nol-Terron, a/k/a Ariel Molina Hernandez,
pled guilty to possessing five or more false identification
documents in violation of 18 U.S.C.A. §§ 1028(a)(3), (b)(2)(B)
(West 2000 & Supp. 2012), 18 U.S.C. § 2 (2006) (Count 4), and to
illegal reentry of an aggravated felon in violation of 8 U.S.C.
§ 1326(a) (2006) (Count 5). On appeal, Nol-Terron asks whether
the district court erred at his sentencing hearing by ruling
that the two offenses to which he pled guilty were not related
counts under U.S. Sentencing Guidelines Manual (“USSG”) § 3D1.2
(2011). Nol-Terron argues that, because his two offenses should
have been grouped under USSG § 3D1.2, he should not have
received a two-level multiple count adjustment under USSG
§ 3D1.4. For the reasons that follow, we affirm.
Grouping decisions are reviewed for clear error. As
United States v. Pitts, 176 F.3d 239 (4th Cir. 1999). The
Sentencing Guidelines provide that if a defendant is convicted
of multiple counts “involving substantially the same harm,” the
counts “shall be grouped together.” USSG § 3D1.2. Counts
implicate substantially the same harm when they “involve the
same victim and two or more acts or transactions connected by a
common criminal objective or constituting part of a common
scheme or plan.” USSG § 3D1.2(b). Here, the district court
found that there were two different victims or goals to be
2
protected, i.e. the immigration offense (Count 5) was intended
to protect national borders whereas the identification offense
(Count 4) was intended to protect society’s interest in the
integrity of various identification documents. (J.A. 81-82).
We find no clear error in the district court’s above finding.
Pitts, 176 F.3d at 244.
Accordingly, we affirm Nol-Terron’s sentence. We
dispense with oral argument as the facts and legal contentions
are adequately presented in the materials before this court and
argument would not aid the decisional process.
AFFIRMED
3 | 01-03-2023 | 05-24-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/869773/ | UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-4668
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
CALVIN WINBUSH, a/k/a Good Game,
Defendant - Appellant.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. Henry E. Hudson, District
Judge. (3:12-cr-00021-HEH-1)
Submitted: March 21, 2013 Decided: May 24, 2013
Before KEENAN, WYNN, and DIAZ, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Robert L. Sirianni, Jr., BROWNSTONE LAW FIRM, PA, Winter Park,
Florida, for Appellant. Neil H. MacBride, United States
Attorney, Jamie L. Mickelson, Assistant United States Attorney,
Richmond, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Calvin Winbush pled guilty to conspiracy to transport
a minor across state lines for prostitution, 18 U.S.C.A.
§ 2423(e) (West Supp. 2012) (Count One), and interstate
transportation of a minor for prostitution, 18 U.S.C.A.
§ 2423(a) (West Supp. 2012), 18 U.S.C. § 2 (2006) (Count Two).
He received an above-Guidelines sentence of 168 months’
imprisonment. Winbush appeals his sentence, contending that the
district court (1) erred in applying an enhancement for use of a
computer, U.S. Sentencing Guidelines Manual § 2G1.3(b)(3)(B)
(2011), and (2) failed to explain adequately its reasons for
varying upward from criminal history category II to category
III. We affirm.
In Cleveland, Ohio, one of Winbush’s prostitutes,
Sonora Armstrong, recruited a fifteen-year-old girl to work for
Winbush. The girl had been living on the streets and dancing at
an after-hours club. Armstrong took pictures of her and posted
them on backpage.com, an internet site where Winbush’s
prostitutes advertised their services. Winbush, Armstrong, the
minor, and another prostitute later traveled to Richmond,
Virginia, for the purpose of engaging in prostitution.
Armstrong posted additional pictures of the minor on the
internet site and the minor had sexual encounters with three
customers in Richmond.
2
At the sentencing hearing, the district court applied,
over Winbush’s objection, a two-level increase for use of a
computer to entice, encourage, offer, or solicit a person to
engage in prohibited sexual conduct with a minor under USSG §
2G1.3 (b)(3)(B). Winbush argued that the commentary to § 2G1.3
did not provide clear guidance on how the enhancement should be
applied and that the plain language of the Guidelines did not
apply in his case.
Section 2G1.3(b)(3) states:
If the offense involved the use of a
computer or an interactive computer service
to (A) persuade, induce, entice, coerce, or
facilitate the travel of, [sic] the minor to
engage in prohibited sexual conduct; or (B)
entice, encourage, offer, or solicit a
person to engage in prohibited sexual
conduct with the minor, increase by 2
levels.
Application Note 4 to § 2G1.3 states:
Subsection (b)(3) is intended to apply only
to the use of a computer or an interactive
computer service to communicate directly
with a minor or with a person who exercises
custody, care, or supervisory control of the
minor. Accordingly, the enhancement in
subsection (b)(3) would not apply to the use
of a computer or an interactive computer
service to obtain airline tickets for the
minor from an airline’s Internet site.
The district court first decided that Application Note
4 was inconsistent with the language of § 2G1.3(b)(3)(B). The
court held that the enhancement applied in Winbush’s case
3
because Armstrong, working in concert with Winbush, used a
computer to advertise the minor on the internet and solicit
customers for her. The court held that such conduct fell
squarely within the ambit of § 2G1.3(b)(3)(B).
Winbush’s total offense level was thirty-one. He was
in criminal history category II and his advisory Guidelines
range was 121-151 months. Before determining Winbush’s
sentence, the district court reviewed his criminal history,
which included assault, drug and firearm offenses, and
aggravated menacing. However, the court noted Winbush had
received very lenient sentences for most of his convictions.
With respect to the minor, the court observed that “her station
in life at the time of recruitment made her extremely
vulnerable, and it was compounded by the defendant’s recruitment
of her and placing her into the mainstream of prostitution
within his operation.”
The court explained its decision to sentence Winbush
above the Guidelines range as a variance in light of the 18
U.S.C. § 3553(a) (2006) factors, despite structuring it as an
increase from criminal history category II to category III. The
court stated that –
[A]n upward variance to Total Offense Level
31, Criminal History Category III is
appropriate to reflect the nature and
circumstances of the offense, the
defendant’s past criminal history which
4
demonstrates a continuing pattern of
criminal violations not adequately
represented by the defendant’s present
criminal history, his demonstrated lack of
respect of the law, and to deter future
exploitation of minors for the purpose of
prostitution.
On appeal, Winbush first challenges the computer-use
enhancement. As he did before the district court, Winbush
relies on Application Note 4 for the proposition that the
enhancement applies only when a computer is used to communicate
directly with the minor or the minor’s custodian. Winbush also
argues that the enhancement is inapplicable because customers
who responded to the ads Armstrong posted used a telephone
rather than a computer to contact the minor. In support of his
argument, Winbush relies on United States v. Patterson, 576 F.3d
431, 443 (7th Cir. 2009), which found the enhancement
inapplicable where internet ads for the defendant’s minor
prostitute were posted by another minor who was working for a
different pimp.
We conclude that Patterson is distinguishable from
this case because both Winbush and Armstrong exercised
supervisory control over the minor and Armstrong advertised her
services on the internet. More importantly, we agree with the
district court that the facts of this case fall squarely within
the plain language of the Guideline. Under § 2G1.3(b)(3)(B),
the focus is on the use of a computer by the defendant or his
5
agent to entice persons to engage in prohibited sexual conduct
with the minor. Application Note 4, however, appears to address
only the situation posited in § 2G1.3(b)(3)(A), where the
defendant uses a computer to contact the minor or her custodian
in order to entice the minor into prohibited sexual conduct.
Several decisions that address the quite different “pimp
scenario” in subsection (b)(3)(B) have found the enhancement
applicable. United States v. Burnett, 377 F. App’x 248, 252
(3rd Cir. 2010)(defendant personally communicated by computer
with individuals he enticed to have sex with the minor); United
States v. Vance, 494 F.3d 985, 997 (11th Cir. 2007) (defendant
used computer to direct undercover agent to provide underage
girls). We agree with the reasoning of these decisions, and
conclude that the district court did not err in applying the
enhancement.
Next, Winbush argues that the district court failed to
explain adequately its reasons for imposing a sentence above the
Guidelines range. This court reviews a sentence for procedural
and substantive reasonableness under an abuse of discretion
standard. Gall v. United States, 552 U.S. 38, 51 (2007). The
same standard applies whether the sentence is “inside, just
outside, or significantly outside the Guidelines range.” United
States v. Rivera-Santana, 668 F.3d 95, 100-01 (4th Cir.)
(internal citation and quotation marks omitted), cert. denied,
6
133 S. Ct. 274 (2012). In reviewing any variance, the appellate
court must give due deference to the sentencing court’s decision
because it “has flexibility in fashioning a sentence outside of
the Guidelines range,” and need only “set forth enough to
satisfy the appellate court that it has considered the parties’
arguments and has a reasoned basis” for its decision. United
States v. Diosdado-Star, 630 F.3d 359, 364, 366 (4th Cir.)
(citing Gall, 552 U.S. at 56), cert. denied, 131 S. Ct. 2946
(2011); see also United States v. Carter, 564 F.3d 325, 328 (4th
Cir. 2009) (sentencing court “must make an individualized
assessment based on the facts presented”) (citation and emphasis
omitted).
Here, the court reviewed Winbush’s criminal history,
the nature and circumstances of the offense, and the need to
prevent Winbush from further exploiting minors. We conclude
that the district court adequately explained its reasons for the
upward variance by providing an individualized assessment based
on the facts of Winbush’s offense and his criminal record.
Therefore, the district court did not abuse its discretion by
imposing a sentence of 168 months.
Accordingly, we affirm the district court’s judgment.
We dispense with oral argument because the facts and legal
7
contentions are adequately presented in the materials before the
Court and argument would not aid the decisional process.
AFFIRMED
8 | 01-03-2023 | 05-24-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/870081/ | Electronically Filed
Intermediate Court of Appeals
CAAP-12-0000261
07-JAN-2013
08:50 AM | 01-03-2023 | 05-24-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/375586/ | 616 F.2d 1143
UNITED STATES of America, Plaintiff-Appellee,v.Parviz BANAFSHE, Defendant-Appellant.
No. 78-2685.
United States Court of Appeals,Ninth Circuit.
April 10, 1980.
Carolyn M. Reynolds, Los Angeles, Cal., argued and on brief, for defendant-appellant.
Donald L. Ungar, Simmons & Ungar, San Francisco, Cal., argued and on brief, for plaintiff-appellee.
Appeal from the United States District Court for the Central District of California.
Before CHAMBERS and TANG, Circuit Judges, and CAMPBELL,* District Judge.
TANG, Circuit Judge:
1
Parviz Banafshe appeals the judgment of the district court revoking his naturalization as a citizen of the United States on the ground that, under 8 U.S.C. § 1451(a) and (d), he lacked the intent to reside permanently in the United States at the time he filed his petition for naturalization. Banafshe contends that the rebuttable presumption in § 1451(d) which presumes that persons who become permanent foreign residents within five years after naturalization lacked the intent to become permanent United States citizens at the time of their application, is unconstitutional. Banafshe further contends that, even if the presumption is constitutional, he produced sufficient evidence to rebut the presumption. We find that the presumption is not unconstitutional and was not rebutted by Banafshe, and affirm the judgment of the district court.
2
Banafshe, a native citizen of Iran, entered the United States as a visitor in 1963 when he was 21 years old. That same year, he married a United States citizen and adjusted his status to that of a permanent resident alien. The marriage ended by annulment within a year.
3
Banafshe continued to reside in the United States, and in 1969 filed a petition for naturalization. The petition was granted and Banafshe was admitted to citizenship in September 1969.
4
In June 1970, after giving up his apartment, selling his car, and terminating his job in the United States, Banafshe returned to Iran. He took up residence in Iran, married an Iranian citizen, acquired an interest in an apartment house, and established his own business.
5
In August 1976 the Government commenced proceedings to revoke Banafshe's naturalization on the ground that he obtained citizenship by concealing his intent to take up permanent residence in Iran, which is ground for revocation under 8 U.S.C. § 1451(a) and (d). At trial, the Government offered the affidavit of the American vice-consul in Tehran. The affidavit stated that Banafshe established a permanent residence in Iran in 1970. It further stated that:
6
He owns no property in the U.S. and maintains no permanent residence but has an established business in Tehran, Iran, and owns 1/3 of a house in Tehran. He has no family ties in the U.S. but his entire family, including wife, are Iranian nationals living in Iran. Mr. Banafshe has not renounced his Iranian nationality.
7
Banafshe and two other witnesses testified on Banafshe's behalf. Banafshe testified that he returned to Iran in June 1970 to help his father's business because his father was ill. After six or seven months his father was able to work again, and Banafshe continued to help his father on a part-time basis until 1973. Although he had intended to return to the United States when his father recovered, he remained in Iran because he was offered a job with an exporting firm. Banafshe accepted the offer and established his own export agency in Tehran.
8
Banafshe also testified that he had intended to return to the United States within a year or two, after he completed some business transactions and saved some money. During the period after his return to Iran, Banafshe visited the United States twice for two short business trips, unaccompanied by family members. Although he had talked with friends about a possible permanent return to the United States, no actual arrangements were ever made.
9
Sheryl Blatt, a former fiancee of Banafshe, testified that she went to Tehran in July 1969 to meet his family and announce their official engagement. They had planned to live in Los Angeles after their marriage. She attended Banafshe's naturalization, but shortly thereafter they decided to end their engagement. When Banafshe left for Iran, he told her that he was going because his father was ill. Banafshe did not tell her how long he would be gone and whether he intended to come back.
10
Victor Ceren, a friend of Banafshe, testified that Banafshe had left some personal belongings with him when he left for Iran. Banafshe did not tell Ceren why he was leaving nor how long he would stay there, but indicated that he intended to return. During Banafshe's stay in Iran, Ceren and Banafshe exchanged letters in which Banafshe generally stated that he would be back as soon as he could and that he hoped to start a business when he returned. Banafshe never told Ceren that he had any specific intent or any specific plans to return.
11
The district court issued an order revoking Banafshe's naturalization, finding that Banafshe had failed to present sufficient countervailing evidence to overcome the statutory presumption establishing his lack of his intention to reside permanently in the United States at the time he filed his naturalization petition.
12
* Under 8 U.S.C. § 1451(d):
13
(d) If a person who shall have been naturalized shall, within five years after such naturalization, return to the country of his nativity, or go to any other foreign country, and take permanent residence therein, it shall be considered prima facie evidence of a lack of intention on the part of such person to reside permanently in the United States at the time of filing his petition for naturalization, and, in the absence of countervailing evidence, it shall be sufficient in the proper proceeding to authorize the revocation and setting aside of the order admitting such person to citizenship and the cancellation of the certificate of naturalization as having been obtained by concealment of a material fact or by willful misrepresentation, and such revocation and setting aside of the order admitting such person to citizenship and such canceling of certificate of naturalization shall be effective as of the original date of the order and certificate, respectively. The diplomatic and consular officers of the United States in foreign countries shall from time to time, through the Department of State, furnish the Department of Justice with statements of the names of those persons within their respective jurisdictions who have been so naturalized and who have taken permanent residence in the country of their nativity, or in any other foreign country, and such statements, duly certified, shall be admissible in evidence in all courts in proceedings to revoke and set aside the order admitting to citizenship and to cancel the certificate of naturalization.
14
By introducing the affidavit of the vice-consul in Iran, the Government established that Banafshe became a permanent resident of Iran.1 Having established this basic fact, it relied on the statutory presumption for prima facie evidence of Banafshe's lack of intent to become a permanent citizen when he applied for naturalization. Under the operation of the statute, Banafshe was then required to produce sufficient countervailing evidence to rebut this presumption. Banafshe contends that the statutory presumption is unconstitutional because it eliminates the Government's burden to prove its case by "clear, unequivocal and convincing evidence," citing Schneiderman v. United States, 320 U.S. 118, 63 S.Ct. 1333, 87 L.Ed. 1796 (1943), and shifts the burden of proof upon him. We conclude, however, that § 1451(d) is a valid exercise of Congress' authority to enact rules of evidence and procedure.
15
In Luria v. United States, 231 U.S. 9, 34 S.Ct. 10, 58 L.Ed. 101 (1913), the Supreme Court upheld the constitutionality of a predecessor statute that contained the rebuttable presumption now found in § 1451(d). The Court ruled that the provision prescribed a rule of evidence, not a substantive right. The provision did not prohibit the defendant from proving that his actual intention was to reside permanently in the United States, a matter of which the defendant possesses special knowledge. The court also indicated that the strength of the presumption varied depending on the length of the interval between naturalization and the commencement of permanent foreign residence. When the interval was short, the presumption yields a substantial and convincing explanation; when it approaches five years the presumption weakens to require only "slight" countervailing evidence. Id. at 27, 34 S.Ct. at 15.
16
We have found only one reported appellate case involving the § 1451(d) presumption. In United States v. Delmendo, 503 F.2d 98 (9th Cir. 1974), a defendant, whose naturalization was revoked, challenged the constitutionality of § 1451. Because the court found that the evidence was insufficient to prove that the defendant had become a permanent foreign resident, it did not have to reach the constitutional issue. In dicta, however, the court noted that the continuity vitality of Luria was dubious in light of Leary v. United States, 395 U.S. 6, 89 S.Ct. 1532, 23 L.Ed.2d 57 (1969). Delmendo, 503 F.2d at 100 n.3.
17
The analysis employed by the Supreme Court in Vance v. Terrazas, --- U.S. ----, 100 S.Ct. 540, 62 L.Ed.2d 461 (1980), however, eliminated any doubt about the validity of § 1451. Terrazas involved an interpretation of § 1481. Under § 1481(a)(2), a person who is a national of the United States shall lose his nationality by making an oath of allegiance to a foreign state. As construed by the Court, § 1481 required the Government to prove by the preponderance of the evidence, both a specific intent to renounce United States citizenship, and, aided by the statutory presumption, the voluntary commission of one of the expatriating acts described in § 1481(a).
18
Like Banafshe, Terrazas argued that the standard of proof should be the clear and convincing evidence standard employed by the court in earlier case, not a preponderance of the evidence standard. The Court held, however, that even though it had previously held that proof of a voluntary expatriating act should be by clear and convincing evidence, Congress remained free to supplant the Court's evidentiary standards because those standards were judge-made rules that were not rooted in the Constitution. As for Terrazas' contention that the use of the presumption was impermissible, the Court held Congress' use of a rebuttable presumption to establish the voluntariness of the expatriating act was a rational rule that balances the interest of the citizen in retaining citizenship and the interest of the Government in proving expatriating conduct.
19
In light of this, Banafshe errs in contending that Congress cannot supplant the evidentiary standard contained in § 1451 for the "clear and convincing" standard announced in Schneiderman v. United States, 320 U.S. 118, 63 S.Ct. 1333, 87 L.Ed. 1796 (1943). The court expressly noted in Terrazas that Schneiderman was an expression of the Court's own preference for the appropriate standard of proof, and that Congress did not exceed its powers by substituting its own judgment about the proper standard. Terrazas, --- U.S. at ----, 100 S.Ct. at 548.
20
Likewise, Congress' decision to shift the burden on the defendant to produce countervailing evidence of an intent to reside permanently in the United States is rational. The presumption comes into play only after the Government has proven that the defendant established a permanent foreign residence within five years after naturalization. At that point, it is appropriate to require the defendant to produce evidence about his intent at the time of his naturalization petition, since proof of permanent foreign residence is itself substantial evidence of a fraudulent intent and the best source of the defendant's actual intent is the defendant himself. Luria, 231 U.S. at 25, 34 S.Ct. at 14. Any danger that the presumption is too broad is eliminated by Luria 's requirement that the strength of the presumption vary with length of time elapsed between naturalization and the establishment of foreign residence. We conclude that § 1451(d) is a rational exercise of Congressional judgment.
21
Banafshe contends that, even if § 1451(d) is constitutional, he presented sufficient countervailing evidence to overcome its presumption. We cannot agree. Because Banafshe commenced permanent residence in Iran nine months after his naturalization, the presumption remains strong. The countervailing evidence presented by Banafshe, as perceived by the district court, was slight and not convincing. The district court was particularly disturbed by Banafshe's reliance on hearsay testimony and the absence of documents supporting Banafshe's stay. Banafshe presented no documentation about his father's illness, and did not produce any letters between him and Ceren in which Banafshe purportedly expressed a desire to eventually return to the United States.
22
Even assuming that Banafshe initially returned to Iran to help his father,2 Banafshe's explanation for his continued residence was unsatisfactory. All of Banafshe's activities in Iran starting a family, getting a new job, purchasing an apartment were entirely consistent with an intent to remain there permanently. Banafshe's reliance on Blatt's testimony to establish his state of mind when he left the United States was almost entirely discounted by the district court. Indeed, the district court drew the inference that Blatt had broken off her engagement with Banafshe because she did not want to live in Iran as a place of permanent residence. In short, a review of the evidence presented by Banafshe was inadequate to show that the finding of the district court that he failed to rebut the presumption in § 1451(d) is clearly erroneous.
23
The judgment of the district court is affirmed.
*
Honorable William J. Campbell, Senior United States District Judge for the Northern District of Illinois, sitting by designation
1
Banafshe does not challenge the district court's finding that he established permanent residency in Iran
2
Upon cross-examination, Banafshe testified that he had two brothers and sisters already in Iran, and that his father had two business partners | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/375551/ | 616 F.2d 951
24 Wage & Hour Cas. (BN 560
UNITED STATES of America, Plaintiff-Appellee,v.PENN CENTRAL TRANSPORTATION COMPANY, Defendant-Appellant.
No. 78-3036.
United States Court of Appeals,Sixth Circuit.
Argued Jan. 30, 1980.Decided March 3, 1980.
Michael E. McGill, Doyle, Lewis & Warner, Toledo, Ohio, for defendant-appellant.
James R. Williams, U. S. Atty., Toledo, Ohio, Barbara Betsock, Thomas C. Barbour, Federal Railroad Administration, Washington, D. C., for plaintiff-appellee.
Before EDWARDS, Chief Judge, KEITH, Circuit Judge, and WISEMAN,* District Judge.
PER CURIAM.
1
This appeal by appellant Penn Central Transportation Co. claims that the District Court which heard this civil action brought by the United States for recovery of penalties under the Hours of Service Act, 45 U.S.C. §§ 61-64b (1976), misconstrued the applicable statute and thus erred in entering judgment for $500 against the railroad.
2
As stipulated by the parties, the issue is: "whether defendant's engineer and employee, Ben K. Tracey, continuously remained on duty for a time period in excess of twelve hours so as to bring into play the applicable penalties under the Hours of Service Act, Title 45, U.S.Code §§ 61-64b."
3
The facts in the case are stipulated as follows:
4
1. Mr. B. K. Tracey is employed by defendant, Penn Central Transportation Company as a locomotive engineer.
5
2. Mr. Tracey resides at Rural Delivery No. 1, Huntsville, Ohio. He normally reports for duty at Bellefontaine, Ohio.
6
3. On July 27, 1973, Mr. Tracey was assigned to an extra list of engineers known as the Bellefontaine Extra Board. Engineers listed on the extra board are subject to call as needed for extra service or for the filling of vacancies in regular engineer assignments in and around Bellefontaine, Ohio. Among the outlying points at which engineers off the extra board are used from Bellefontaine, Ohio, are Kenton, Carey and Sandusky, Ohio.
7
4. On July 27, 1973, Mr. Tracey was called by the crew dispatcher at Bellefontaine and ordered to report at Carey, Ohio, an outlying duty station, to fill a vacancy which had occurred on the position of engineer on a local freight assignment designated as CCK-1 and CCK-2. The regularly assigned engineer was absent on that date and subsequent dates. Said assignment was a regular assignment with a fixed reporting time and place, namely 8:00 a. m. daily except (Saturday and) Sunday at the Carey, Ohio freight station.
8
5. The Carey, Ohio freight station is approximately 48.6 miles from the Bellefontaine crew dispatcher's office and approximately 45.2 miles from Huntsville, Ohio, Mr. Tracey's residence.
9
6. Tracey was not ordered nor required to report to the office of the crew dispatcher at Bellefontaine. His instructions were to arrive at Carey in advance of the 8:00 a. m. starting time to perform service on CCK-1 and CCK-2. The driving time from Bellefontaine to Carey is approximately one hour and six minutes, driving at speeds of 50 miles per hour or less.
10
7. Tracey left home at approximately 6:15 a. m. Although not required to do so, he drove to Bellefontaine, his normal reporting station, and stopped at the crew dispatcher's office. He left Bellefontaine at approximately 6:30 a. m. and arrived at Carey in time to fulfill the assignment as engineer on CCK-1 and CCK-2.
11
8. No transportation is provided by the company between Bellefontaine and Carey. Extra board engineers called for positions at outlying points who are unable to reach the reporting point are "marked down" on the extra board list.
12
The statute at issue in this case in applicable part provides:
13
(b) For the purposes of sections 61 to 64b of this title
14
(3) Time on duty shall commence when an employee reports for duty and terminate when the employee is finally released from duty, and shall include:
15
(C) Time spent in deadhead transportation by an employee to a duty assignment: Provided, That time spent in deadhead transportation by an employee from duty to his point of final release shall not be counted in computing time off duty; . . . .
16
45 U.S.C. § 61(b)(3)(C) (1976).
17
The problem is that "deadheading" is not defined in the Act. Like the District Judge, we have reviewed the legislative history and find it inconclusive. As a consequence, we must, as the District Judge did, turn to statutory construction and administrative interpretation in order to resolve what has clearly been a long continuing dispute.
18
On consideration of this whole record, we adopt the reasoning and decision of the District Judge in his opinion granting judgment to the United States:
19
On January 9, 1973, the FRA issued an information memorandum with regard to the agency's interpretation of the Act following the 1969 amendments. The memorandum provides in pertinent part:
20
The phrase "deadhead transportation by an employee to a duty assignment" is intended to mean that time spent traveling by the employee calculated from the time he reports for duty until he reaches his duty assignment. It does not include transit time to and from the employee's residence to the reporting or duty point except as covered in paragraph (1) below.
21
(1) If an employee utilizes automobile transportation from his home to point of duty assignment in lieu of deadhead transportation provided by the carrier, such travel time is considered as deadheading time and is on-duty time. This means actual travel time. . . .
22
The agency continued to follow this interpretation of the Act. 40 Fed.Reg. 42692 (1976).
23
It cannot be disputed that the Hours of Service Act is remedial in nature and is entitled to a liberal construction to serve the humane purposes for which it was adopted. E. g., Atchison, Topeka & Santa Fe Ry. v. United States, 244 U.S. 336, 343, 37 S.Ct. 635, 637, 61 L.Ed. 1175 (1917); Jopek v. New York Central R.R., 353 F.2d 778, 781 (3d Cir. 1965). Furthermore, the interpretation given a statute by the agency entrusted with its administration and enforcement is entitled to deference. Udall v. Tallman, 380 U.S. 1, 85 S.Ct. 792, 13 L.Ed.2d 616, rehearing denied, 380 U.S. 989, 85 S.Ct. 1325, 14 L.Ed.2d 283 (1965). It is the opinion of this Court that both a liberal construction of the Act and proper deference to the interpretation of the statute by the FRA requires the rejection of the analysis of the defendant. Although where the carrier provides deadhead transportation the travel time between the employee's residence and the normal duty station would not constitute time on duty under the Act (such travel does not differ in nature from commuting to work), it is clear that the Congressional intent behind the amendment to include time spent in deadhead transportation to a duty assignment as time on duty under the Act would be defeated if the recently enacted remedial measure can be circumvented by the carrier's requiring the employee to travel directly to the assigned duty station by his own means without first reporting to his normal duty station. The cryptic note of the Senate Commerce Committee's Report cited by the defendant presupposes that the employee is required to report to his normal duty station prior to deadheading. The Court therefore concludes that where, as here, the employee is ordered to travel by his own means directly from his residence to the assigned point of duty other than his normal duty station, such travel is deadhead transportation under the Act and the time spent therein constitutes time on duty. Therefore the motion of plaintiff for summary judgment will be sustained.
24
United States v. Penn Central Transportation Co., 445 F.Supp. 561, 563-564 (N.D.Ohio 1977).
25
The judgment of the District Court is affirmed.
*
Honorable Thomas A. Wiseman, Jr., United States District Judge for the Middle District of Tennessee, sitting by designation | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/375552/ | 616 F.2d 954
UNITED STATES of America, Plaintiff-Appellee,v.Don COUCH, Defendant-Appellant.UNITED STATES of America, Plaintiff-Appellee,v.Larry COUCH, Defendant-Appellant.
Nos. 79-5213, 79-5214.
United States Court of Appeals,Sixth Circuit.
Argued Jan. 30, 1980.Decided March 3, 1980.Rehearing Denied April 22, 1980.Certiorari Denied April 21, 1980.See 100 S.Ct. 1843.
Eldon L. Webb, Lexington, Ky., for defendant-appellant in No. 79-5213.
Robert W. Willmott, Jr., Lexington, Ky. (Court Appointed CJA), for defendant-appellant in No. 79-5214.
Patrick H. Molloy, U. S. Atty., Marilyn S. Daniel, Joseph Famularo, Lexington, Ky., for plaintiff-appellee in both cases.
Before EDWARDS, Chief Judge, KEITH, Circuit Judge, and WISEMAN,* District Judge.
PER CURIAM.
1
This appeal concerns three brothers against whom, in separate counts, the United States brought charges of committing a burglary of a post office at Ned, Kentucky, and an armed robbery of a post office at Waddy, Kentucky. One of the brothers, Leon, pled guilty to both felonies and is not involved in this appeal, except that he gave exculpatory evidence at the joint trial of his brothers, Don and Larry, to the effect that neither had anything to do with either offense.
2
Larry Couch at trial was identified positively by the postmaster who was robbed at the Waddy holdup and was thoroughly inculpated by other evidence concerning the Waddy offense. As to him we find no abuse of judicial discretion in the District Judge's refusal of severance or in his rulings on admission of evidence.
3
As to Don Couch, the situation is somewhat different. He was charged only in the Waddy Post Office holdup, and only with aiding and abetting. The record clearly indicates that he was never in the post office during the holdup. There was, however, a considerable amount of evidence concerning his having in his possession after the event various items which had been taken in the Waddy holdup. More important, three witnesses testified to Don Couch's separate statements to each concerning his role as the driver of the car used by Larry and Leon Couch on the day of the Waddy holdup, both before and after the crime. The evidence presented was sufficient to warrant the District Judge's denying the motion for acquittal on behalf of Don Couch and to sustain the jury verdict.
4
Finding no reversible error, the judgments of conviction are affirmed.
*
Honorable Thomas A. Wiseman, Jr., United States District Judge for the Middle District of Tennessee, sitting by designation | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1554926/ | 36 So.3d 258 (2010)
Janice S. SULLIVAN
v.
Priscilla WALLACE, et al.
No. 2010-C-0388.
Supreme Court of Louisiana.
May 28, 2010.
Granted and docketed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/524134/ | 876 F.2d 17
George CLIPPER, Plaintiff-Appellee,v.TAKOMA PARK, MARYLAND, Defendant-Appellant,andNational Permanent Federal Savings & Loan Association, aNational Banking Association; Prince George'sCounty; Grant A. Starkey, Defendants.
No. 88-1011.
United States Court of Appeals,Fourth Circuit.
Argued Nov. 2, 1988.Decided May 30, 1989.Rehearing and Rehearing In Banc Denied July 28, 1989.
Douglas B. Schoettinger (Barry Bach, Melanie Stevens, Smith, Somerville & Case, on brief), for defendant-appellant.
Edward L. Genn (Gilbert J. Genn, Brown, Genn, Brown & Karp, on brief), for plaintiff-appellee.
Before MURNAGHAN, SPROUSE, and WILKINS, Circuit Judges.
SPROUSE, Circuit Judge:
1
The City of Takoma Park, Maryland, appeals the judgment of the district court entered after a jury verdict in favor of George Clipper on his claim under 42 U.S.C. Sec. 1983. The jury awarded Clipper $304,355 on his claim that Takoma Park, through its police officers, had denied him due process of law by arresting him without probable cause and jailing him after he was misidentified as a bank robber. The jury found against Clipper on his 42 U.S.C. sections 1981 and 1985 claims; he does not appeal that verdict.
2
We, of course, view the evidence in a light most favorable to Clipper. McElveen v. County of Prince William, 725 F.2d 954, 958 (4th Cir.), cert. denied, 469 U.S. 819, 105 S.Ct. 88, 83 L.Ed.2d 35 (1984). So viewed, the evidence revealed that at 1:12 p.m. on May 14, 1971, two armed men held up a branch of the National Permanent Federal Savings & Loan in Takoma Park, Maryland. A bank employee set off a silent alarm, and several Takoma Park police officers responded. The first, Officer Henry Wortman, arrived just as the two robbers left the bank to join an accomplice, later identified as Garland Lathan, Clipper's son-in-law, who was waiting with a 1970 Ford Mustang. A gunfight ensued, during which Lathan was shot in the back by one of his accomplices. When the smoke cleared, Wortman captured Lathan and the other young robber, but the oldest one had escaped by commandeering a bystander's car.
3
Other officers of the Takoma Park Police Department, including Lieutenant W.W. Dalrymple, head of the detective bureau, and Captain Robert Porter, acting Chief of Police, as well as FBI agents, were soon on the scene and interviewed bank employees to obtain a description of the escaped robber. Vincent Mohler, the bank manager, gave the police a detailed description including his observation that he was a dark-complexioned black male, approximately fifty-five years old with graying, curly hair. He gave an approximation of the man's height and weight and also stated that he appeared intoxicated. At the request of the Takoma Park Police Department, Mohler gave the film from the bank's surveillance camera to the FBI for developing.
4
The police determined that the 1970 Mustang, captured along with two of the robbers, was registered to George Clipper. FBI agents interviewed Clipper that afternoon, and he informed them that he had been home all day working around his home. At 6:00 p.m. that evening, Corporal Grant Starkey, the junior member of Takoma Park's two-man detective bureau, came on duty and continued the investigation. Later that evening, Clipper came to the station to inquire about the Mustang and was referred to Starkey. Starkey's suspicions were aroused because Clipper roughly matched the description of the escaped robber and because he denied knowing Lathan, whom Starkey knew was Clipper's son-in-law. After talking with Starkey for a while, Clipper explained that he had only met Lathan once and that the car was a gift to his daughter. Starkey contacted Officer Wortman (the only officer who had seen the robber), but Wortman was unable to make a positive identification. Starkey then took several photographs of Clipper. At trial, Clipper testified that he had provided the names of at least two neighbors, including a police officer, who would have verified that he was with them at the time of the robbery.
5
The next day Starkey discussed the case with the involved FBI Special Agent and with his superior, Lieutenant Dalrymple. The FBI agent expressed his opinion that there was probable cause to arrest Clipper. Starkey then took Clipper's--and only Clipper's--photograph to the bank for identification. Mohler and another bank employee identified Clipper, and several other employees told Starkey that he resembled the robber. Starkey next obtained an arrest warrant and, with the cooperation of Montgomery County Police, arrested Clipper on May 15, 1971. Following his arrest, Clipper spent six days in the Prince George's County Jail and was not released until May 21, 1971. Mohler, the bank manager, later stated that Clipper was not the robber, and all charges against Clipper were dismissed in July 1971.
6
Takoma Park, on appeal, argues that Starkey had probable cause to arrest Clipper and stresses that he had no duty to pursue exculpatory evidence. It also contends that there was insufficient evidence of policy or custom or of a causal link between such a custom and Clipper's injury and that certain jury instructions, especially with regard to determining the responsible policymaking officials, were fatally flawed. We find no merit to Takoma Park's argument concerning the jury instructions, and in our view the evidence adequately supports the verdict on the other issues that Takoma Park raises.
7
The authority of a state officer to make an arrest is, of course, to be determined according to state law, consistent with constitutional requirements. United States v. Gearhart, 326 F.2d 412, 414 n. 4 (4th Cir.1964); see also United States v. Lyles, 488 F.2d 290, 292 n. 4 (5th Cir.), cert. denied, 419 U.S. 851, 95 S.Ct. 92, 42 L.Ed.2d 82 (1974). A section 1983 action, however, is not predicated on the legality or illegality of an act under state law, but on whether that act deprives an individual of "rights, privileges, or immunities secured by the [federal] Constitution and laws." 42 U.S.C. Sec. 1983; see Fisher v. Washington Metropolitan Area Transit Authority, 690 F.2d 1133, 1138 (4th Cir.1982); Street v. Surdyka, 492 F.2d 368, 371-72 (4th Cir.1974). Under the fourth amendment, probable cause for arrest "exists where the facts and circumstances within [the officer's] knowledge and of which [he] had reasonably trustworthy information are sufficient in themselves to warrant a man of reasonable caution in the belief that an offense has been or is being committed by the person to be arrested." Dunaway v. New York, 442 U.S. 200, 208 n. 9, 99 S.Ct. 2248, 2254 n. 9, 60 L.Ed.2d 824 (1979) (citations, quotation marks, and original brackets omitted); see also Beck v. Ohio, 379 U.S. 89, 91, 85 S.Ct. 223, 225-26, 13 L.Ed.2d 142 (1964).
8
Viewing the probable cause evidence according to this principle and under the appropriate evidentiary review standard,* we conclude that ample evidence exists to support the verdict. The jury considered evidence that neither Corporal Starkey nor other Takoma Park officers pursued evidence they might have obtained from individuals who would have told them that Clipper could not have robbed the bank because he was at another place at the time of the robbery. Starkey testified that Officer Wortman, the officer on the scene of the robbery, told him that although Clipper looked like the robber, he was not sure that Clipper was the man. Further, prints from the bank surveillance film were available from the FBI by the evening of May 14. It is not clear whether anyone in the Takoma Park Police Department had obtained copies of the bank surveillance photographs prior to Clipper's arrest or while he was incarcerated, and the evidence relating to that factual issue is conflicting. Clipper contends, however, that, if viewed, the photographs would have conclusively established that he was not the missing robber. The photographs were introduced at trial, and again we must view that evidence in a light favorable to Clipper.
9
We would not suggest that Starkey's failure to investigate the leads that Clipper provided was, in itself, sufficient to negate probable cause. In our view, however, the evidence of that omission, see BeVier v. Hucal, 806 F.2d 123, 127-28 (7th Cir.1986), cited with approval in Sevigny v. Dicksey, 846 F.2d 953, 957 n. 5 (4th Cir.1988), the evidence of Wortman's statement to Starkey, and the speculative nature of the other information and investigative instincts upon which Starkey relied in making the arrest form a sufficient evidentiary base to sustain the verdict upon post-trial motions and on appeal.
10
Similarly, sufficient evidence exists from which the jury reasonably could have concluded that Clipper's arrest was made pursuant to a policy or a custom of Takoma Park, and the jury was properly instructed on the law governing its consideration of that issue. Starkey testified that the pre-arrest events were coordinated and known by Lieutenant Dalrymple, his supervisor who was also the head of the detective bureau and the department's training coordinator. Starkey stated that he had received no training materials giving typical examples of arrests properly based on probable cause and that he applied the practices and policies in Clipper's case that were "applied ... to every case that I worked on." At trial, he also related his experience and explained his reasons for arresting Clipper. In deposition evidence introduced at trial in response to the question, "Whatever you did at that particular time, you felt you were doing pursuant to instructions given you by the Takoma Park Police Department?", he responded, "I felt I was doing what I thought was right, and what I learned in school."
11
In Wellington v. Daniels, 717 F.2d 932 (4th Cir.1983), we declined to adopt the gross negligence standard employed by some appellate courts for judging municipal liability and held:
12
It is true that an official policy can be inferred from a municipality's omissions as well as from its acts. Nevertheless, such omissions [such as failure to train or to supervise] are actionable only if they constitute "tacit authorization" of or "deliberate indifference" to constitutional injuries.
13
Id. at 935-36 (citations omitted). In Spell v. McDaniel, 824 F.2d 1380 (1987), decided after the trial of the case sub judice, we reiterated our Wellington holding in a case specifically involving police training, stating:
14
Only those deficiencies in police training policies that result from policymaker fault of at least the degree of deliberate indifference to or reckless disregard to the constitutional rights of persons within police force jurisdiction can give rise to municipal liability.
15
Id. at 1390. In a recent decision, City of Canton v. Harris, 489 U.S. ----, ----, 109 S.Ct. 1197, 1204-05, 103 L.Ed.2d 412, 426 (1989), the Supreme Court adopted the "deliberate indifference" standard for determining when a municipality may be held liable in "failure to train" cases.
16
The district court in the case we now consider carefully instructed the jury that:
17
The city cannot be held liable for the wrongful acts of its employees merely by reason of the employer[-]employee relationship. Liability of the city can only be imposed upon the basis of the city's own policy, practices or customs. Such a policy, practice or custom may arise in either of 2 ways.
18
One, by an affirmative policy of unconstitutional conduct promulgated by policy making officials of the city:
19
Or, 2, by acts or omissions of the city through its highest authorized officials which constitutes either a tacit authorization of or a deliberate indifference to constitutional injuries.
20
The district court repeated its recognition of and application of the Wellington standard in rejecting Takoma Park's motion for judgment n.o.v.:
21
Under all of the circumstances of this case, including, particularly, the unique circumstances of the small size of the police force involved here and the reasonable inferences to be drawn by the jury from the facts as presented, the principles established ... in Wellington v. Daniels, 717 F.2d 932 (4th Cir.1983), do not mandate setting aside the verdict in this case.
22
In our view, the Supreme Court's opinion in City of Canton does not require a change in the standard of review we adopted in Wellington and Spell, and the district court appropriately instructed the jury on the close factual issue using that standard. We perceive no reason to disturb the jury's verdict.
23
In view of the above, the judgment of the district court is affirmed.
24
AFFIRMED.
*
"Fact-finding by a jury will be set aside only where the evidence, viewed in the light most favorable to the parties supporting the jury's verdict, is so clear that reasonable persons could reach no other conclusion than that asserted on appeal." McElveen, 725 F.2d at 958 | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2584120/ | 172 P.3d 1285 (2007)
2007-NMCERT-010
STATE
v.
TORRE.
No. 30,647 (COA 27,508).
Supreme Court of New Mexico.
October 22, 2007.
Denials of Certiorari. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858023/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-90-269-CR
JOHNNIE WALKER,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 299TH JUDICIAL DISTRICT
NO. 83,075, HONORABLE JON N. WISSER, JUDGE PRESIDING
PER CURIAM
On July 30, 1986, appellant was convicted by a jury of forgery by possession. (1)
The jury assessed punishment, enhanced, at sixty years' confinement. The trial court sentenced
appellant accordingly. On June 15, 1988, this court affirmed the conviction. On September 21,
1988, we granted appellant's motion for rehearing, withdrew our original opinion and judgment,
affirmed the judgment of conviction as to guilt, reversed the judgment as to punishment, and
remanded the cause for a new trial in accordance with 1987 Tex. Gen. Laws, ch. 179, § 1, at
1387 (Tex. Code Crim. Proc. Ann. art. 44.29(b), since amended). On September 14, 1990, a jury found the enhancement allegations true and assessed appellant's punishment at fifty years'
confinement. The trial court rendered judgment accordingly. This appeal followed. We will
affirm the judgment of conviction.
I. DISCUSSION & AUTHORITIES
Appellant brings one point of error asserting that the trial court overstepped its
boundaries of impartiality when the judge: (1) advised the prosecutor how to cure the defects in
the pen-packet evidence; and (2) called a recess to allow the prosecutor to cure the defects.
A. Standard of Review
The atmosphere essential to the preservation of a fair trial must be maintained at
all costs. Estes v. Texas, 381 U.S. 532, 540 (1965); Taylor v. State, 420 S.W.2d 601, 607 (Tex.
Crim. App. 1967). It is the duty of the trial court to conduct itself so as to ensure that the accused
receives a fair trial. Tex. Code Crim. Proc. Ann. art. 2.03(b) (1977); see also Supreme Court
of Texas, Code of Judicial Conduct, Canon 2, pt. A (1988). In an appeal of this nature, it is the
fundamental purpose of this court to ascertain whether the convicted defendant received a fair trial
in the court below. Bethany v. State, 814 S.W.2d 455, 456 (Tex. App. 1991, no pet). In making
this determination, any indication of prejudice or opinion of guilt on the part of the trial judge
requires close scrutiny of his actions. Id.
B. Background
The conduct complained of occurred when the State offered into evidence its
exhibits 6, 7, 8, and 9. The exhibits are pen-packet evidence of appellant's prior convictions,
offered for the purpose of enhancement. Appellant's trial counsel informed the court that he had
extensive objections to the pen-packet evidence. Outside the presence of the jury, the court heard
appellant's objections. Appellant asserts that in the course of this hearing: (1) the trial court's
actions and rulings aided the State in proving up the prior convictions; (2) the trial court's rulings
caused the prosecutor to realize that she needed to obtain further documentation in order to cure
the defects in the pen packets; and (3) the trial court's action of delaying the trial gave the State
sufficient time to remedy the defects which had been pointed out by defense counsel in his
objections.
C. Point of Error Not Properly Raised
At the outset we note that a point of error must direct the attention of the appellate
court to the error about which complaint is made. Tex. R. App. P. Ann. 74(d) (Supp. 1991).
In his brief, appellant cites to an eighteen-page excerpt in the record to support his allegation of
judicial impropriety. Appellant does not identify the specific rulings or actions alleged to
constitute error. Mere reference to pages in the record does not sufficiently identify the
complained of actions or rulings of the court and does not constitute a point of error. Thiel v.
State, 676 S.W.2d 593, 595 (Tex. Crim. App. 1984).
D. Error Waived As To Trial Court's Improper Remarks
Nevertheless, we have reviewed the lengthy excerpt of the hearing. It is true that,
outside the presence of the jury, the trial judge told the prosecutor how to cure defects in one of
the pen packets. Appellant's trial counsel had objected to State's exhibit 8, which contained
judgments and sentences for convictions in Travis County cause numbers 66,863 and 61,303.
Appellant objected to the lack of certification of these documents. (2) The court responded: "These
are Travis County. You can run right over there and get them signed right now by the clerk."
Later, in response to a comment by appellant that "They [the documents] weren't certified the first
time. How can they certify them now?", the court responded, "We just need to get them
certified." (Emphasis added.)
Appellant failed to object to these comments or to any other comments made by the
trial judge during the hearing. Nothing is presented for review. Tex. R. App. P. Ann. 52(a)
(Supp. 1991).
E. No Showing of Harm As A Result of Trial Court's
Improper Remarks
If the trial court's remarks were improper, there is no evidence that the remarks
harmed appellant. Tex. R. App. P. 81(b)(2) (Supp. 1991). The judge's statements were made
outside the presence of the jury.
Additionally, appellant's attorney, not the trial court, alerted the prosecutor to the
pen-packet certification defects. One reason for requiring a specific objection at trial is to allow
opposing counsel an opportunity to remove the defect or supply additional testimony. Zillender
v. State, 557 S.W.2d 515, 517 (Tex. Crim. App. 1977). Consequently, a ruling sustaining
appellant's Dingler objection to the State's exhibit 8 is not harmful simply because it caused the
prosecutor to realize that she needed to obtain further documentation in order to cure the defects.
F. Trial Court's Decision To Recess Was Not Error
Appellant also asserts that the trial court overstepped the boundaries of impartiality
when it recessed the trial so that the prosecutor could cure the defects in the pen- packets. After
hearing appellant's objections to the pen-packet exhibits, the trial court informed the State it did
not have to proffer its exhibits until the next day. The State withdrew its proffer of the exhibits.
The trial court then refused to rule on their admissibility. There was no objection to the court's
actions. The jury was then called back to the courtroom. The State put on four reputation
witnesses. During a bench conference that followed, both sides indicated they had no further
evidence to put on that day. In response to appellant's request that they finish the trial that day,
the trial court responded that it was not possible to finish the trial that day because the charge
would require several hours to prepare. The trial court elected to recess to begin preparing the
charge and to postpone reconsideration of the pen-packet evidence until the next day. Appellant
failed to object to the recess and error, if any, was waived. Tex. R. App. P. Ann. 52(a) (Supp.
1991).
Furthermore, that the State benefited from the court's decision to postpone further
consideration of the pen-packet exhibits and to recess is of no moment. The power to regulate
and control the order in which evidence is introduced is within the discretion of the trial court,
as is the granting of a recess. Laws v. State, 549 S.W.2d 738, 741 (Tex. Crim. App. 1977),
Williams v. State, 481 S.W.2d 119, 123 (Tex. Crim. App. 1972). We find no evidence in the
record that the trial court abused its discretion. Appellant's point of error is overruled.
The judgment of conviction is affirmed.
[Before Justices Powers, Jones and Kidd]
Affirmed
Filed: February 5, 1992
[Do Not Publish]
1. 1 Tex. Penal Code Ann. § 32.21(a)(1)(C) (1989).
2. 2 See Dingler v. State, 768 S.W.2d 305 (Tex. Crim. App. 1989) (pen-packet judgment
certified by Texas Department of Corrections records clerk must also reflect that original copies
of judgment received by TDC were certified by court clerk). Dingler has since been overruled
in Reed v. State, 811 S.W.2d 582, 584 (Tex. Crim. App. 1991) (Texas Department of Criminal
Justice, Institutional Division record clerk's certification of pen-packet copies of the judgment and
sentence now constitutes proper authentication). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2857993/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-90-206-CV
EARL WHITE,
APPELLANT
vs.
EGGHEAD ENTERPRISES, INC., RONALD CRAIG McGUIRE,
INDIVIDUALLY AND FIRST CITY NATIONAL BANK OF
SAN ANGELO, AS TRUSTEE OF THE RONALD CRAIG
McGUIRE TRUST,
APPELLEES
FROM THE DISTRICT COURT OF TOM GREEN COUNTY, 51ST JUDICIAL DISTRICT
NO. CV87-0593-A, HONORABLE JOHN E. SUTTON, JUDGE
Earl White sued Egghead Enterprises, Inc. (a corporation organized and formerly
existing under the laws of the State of Texas), Ronald Craig McGuire, and First City National
Bank of San Angelo (in the bank's capacity as trustee of the Ronald Craig McGuire Trust),
praying for a declaratory judgment that Earl owned eighteen percent of the outstanding shares of
stock in Egghead. (1) Following a bench trial, the court below rendered judgment that Earl and his
wife, Linda White, owned jointly 5.37% of the outstanding shares. Earl appeals. We will affirm
the judgment.
THE CONTROVERSY
On May 20, 1982, Craig and his father, Troy McGuire, obtained from the
Secretary of State the articles of incorporation for Egghead Enterprises, Inc., a close corporation.
The articles provided that Egghead would be managed by the shareholders rather than the
directors. On June 15, 1982, Troy, Craig, and Craig's sister held the organizational meeting,
elected themselves directors and officers of the corporation, and adopted bylaws. (2) While the
minutes do not reflect any act by anyone that authorized the issuance of shares, a share certificate
was issued to Craig or perhaps to Troy evidencing ownership of 5,000 shares of Egghead capital
stock. (3)
At about the same time, Craig and Troy sought from Earl White, Troy's brother-in-law, advice about investing funds Craig had received on a personal-injury recovery. As a result,
Earl found in Dallas County a seven-acre tract of land that Egghead subsequently purchased. The
record does not reveal how the corporation acquired the money necessary to make the purchase.
Craig may have lent the money or the corporation may have obtained it by Craig's payment for
the 5000 shares mentioned above.
Thereafter, the following transactions occurred in connection with the capital stock
of the corporation:
Affirmation of Craig's 5000 shares. In late June 1982, Troy, Craig, and Earl met
with Charles Carruth, a Dallas attorney recommended by Earl. They wished to make sure that
Egghead's organizational meeting was properly "documented." Troy and Craig told Carruth that
the corporation had previously issued 5000 shares to Craig or Troy. They could not find the share
certificate, they told Carruth, but the corporation actually "belonged" to Craig because his money
capitalized Egghead. Carruth prepared a new set of bylaws and other documents, including the
minutes of an organizational meeting. (4) The new minutes declared that Craig was the sole director,
officer, and shareholder, and that he had authorized the corporation to issue to himself 5000
shares of stock in consideration of one dollar per share. While the minutes formally authorized
for the first time the issuance of any shares of capital stock and their sale to Craig, the latter
transaction was not evidenced by a share certificate, apparently on the theory that the previously
issued certificate was sufficient. In August or September 1982, however, Carruth wrote
"certificate void" on the blank stock-register stub that corresponded to the missing stock certificate
evidencing Craig's 5000 shares. This action may have been taken at Craig's direction. The
record does not indicate any underlying basis for the action, such as Craig's transfer of the 5000
shares to someone else or the corporation's acquisition of his 5000 shares.
Acquisition of 970 shares by the Ronald Craig McGuire Trust. In late 1982 or
early 1983, Craig created for his benefit (with Carruth's assistance) the "Ronald Craig McGuire
Trust." The trust instrument assigned to the co-trustees, Carruth and the North Dallas Bank &
Trust, "discretion and complete power to administer" the trust as well as "all powers conferred
on trustees by the Texas Trust Act." On August 25, 1983, the co-trustees received from the
corporation a certificate for 970 shares. The record does not reveal the character of these 970
shares as being: (1) shares newly issued by the corporation in addition to the 5000 shares issued
earlier to Craig; or (2) shares included within the 5000 shares issued to Craig, which he then
transferred to the trust, the certificate being issued to reflect the trust's new ownership of the
shares. Because the record is silent regarding any corporate act suggesting the issuance of any
new shares, in addition to the 5000 shares, one must conclude that the second proposition is the
only logical one.
Acquisition of 270 shares by Earl and Linda White. In the same meeting in late
1982 or early 1983, Craig and Carruth decided to create a compensation scheme for Earl, who
had been managing Egghead's business and supervising the construction of buildings on the seven-acre tract. Earl's pay for the work had been meager because Egghead lacked the cash to pay him
more. On August 25, 1983, Earl and Egghead entered into a written contract under which Earl
would receive a quantity of the corporation's stock, equal in value to $18,000, as payment for
work he had previously done. The contract also provided that Earl would receive for his future
work an annual salary of $25,000 and fifteen percent of the corporation's profits. On August 25,
1983, Craig, the sole director of Egghead, held a special meeting of the board of directors. The
minutes of the meeting declare a resolution "that the corporation issue 30 shares of EGGHEAD
ENTERPRISES, INC. to Earl White, who has been an employee of the corporation since
January." This is the only instance in which the directors formally authorized the issuance of any
capital stock, in addition to the 5000 shares authorized to be issued and sold to Craig in the
beginning.
In October 1983, the corporation purportedly issued to Earl and Linda a certificate
for 225 shares, and in August 1984 the corporation purportedly issued to them a certificate for
an additional fifteen shares. (5) The record contains no showing, however, that the board of
directors authorized the issuance of any new shares in addition to the 5030 previously issued from
the 100,000 total shares authorized by the articles of incorporation. Moreover, neither Craig nor
either of the trustees signed the stock certificates.
THE TRIAL-COURT PROCEEDINGS
In 1986, the corporation dissolved and all its assets were sold. In 1987, Earl sued
Egghead, Craig, and the trust. Earl alleged three causes of action. He sued on his contract and
in quantum meruit to recover sums due him for his work in behalf of the corporation. He joined
to these a cause of action to obtain a declaratory judgment that he owned eighteen percent of the
outstanding shares of Egghead capital stock. Only the declaratory judgment action is before us
on appeal. Earl did not sue for an accounting of any kind or for the value of the shares he
believed he owned; he did not assail the bona fides of Egghead's corporate existence or allege that
it was the alter ego of Craig; he did not attack the creation of the trust or its terms.
The trial court determined after trial that Earl and Linda jointly owned 270 shares,
or 5.37% of the total of 5030 shares that the corporation had issued from the 100,000 shares
authorized by its articles of incorporation. The trial-court findings of fact and conclusions of law
indicate the trial court's reasoning:
1. By formal resolution of the board of directors, Egghead authorized the issuance
of 5030 shares, being the total of the 5000 shares authorized in June 1982 for sale to Craig and
the thirty shares authorized August 25, 1983 for delivery to Earl in consideration of services
previously performed by him.
2. All 5030 shares were outstanding at the time of trial because none had ever been
canceled for any reason. At the time of trial the 5030 shares were owned as follows:
3. Craig owned 3790 shares, being the remainder of his 5000 shares after
deducting his transfer of 970 shares to the trust and his transfer of 240 shares to Earl and Linda
as a gift, as evidenced by the share certificates issued August 25, 1983.
4. Earl and Linda owned 270 shares, being the total of the thirty shares authorized
by the board of directors on August 25, 1983 and the 240 shares they acquired by gift and transfer
from Craig, as evidenced by the share certificates issued in October 1983 (225 shares) and August
1984 (fifteen shares).
The trial court rendered judgment accordingly. Earl appeals on two points of error.
POINTS OF ERROR
In his first point of error, Earl assails the foundation of the trial court's reasoning --
that 5030 shares were outstanding at the time of trial. He contends he proved as a matter of law
that there were 1000 shares outstanding on August 25, 1983. He points first to the fact that the
phrase "certificate void" was marked on the stub opposite the certificate for Craig's 5000 shares,
arguing that these shares were not "canceled" but simply reacquired by the corporation as treasury
stock. (6) Earl contends that from August 1982, when Carruth wrote "certificate void" on the
certificate stub, there were no shares outstanding until August 25, 1983, when the parties' actions
resulted in the issuance of 1000 newly issued and outstanding shares. This is the total of the 970
shares transferred to the trust on August 25, 1983, as evidenced by a share certificate of that date,
together with the thirty shares that the board of directors authorized for issuance to Earl on the
same date. By these transactions, Earl concludes, he acquired on August 25, 1983, three percent
of the 1000 shares that were outstanding. We note that under this theory Craig was no longer a
shareholder after August 25, 1983, although the trust owned and held 970 shares for his benefit.
In his second point of error, Earl contends he proved as a matter of law, or by the
great weight and preponderance of the evidence, the following transactions that resulted in his
owning eighteen percent of the outstanding shares at the time of trial:
1. After August 25, 1983, the board of directors authorized the issuance of 500
new shares in addition to the 1000 shares mentioned above.
2. Earl acquired 240 of these shares by issuance of the share certificates issued in
October 1983 (225 shares) and August 1984 (fifteen shares).
3. The trust acquired 260 of the newly issued shares at some unspecified time after
August 25, 1983, even though that proposition was not evidenced by any resolution of the board
of directors or by any share certificate.
4. As a result, there were outstanding at the time of trial only 1500 shares, of
which Earl owned eighteen percent or 270 shares (thirty acquired before August 25, 1983, and
240 shares acquired thereafter).
DISCUSSION AND HOLDINGS
We have examined carefully Earl's argument in light of all the evidence. Much
of the argument equates the issuance of a share certificate with the issuance of new shares from
among the 100,000 shares authorized by the articles of incorporation. The issuance of a share
certificate may also evidence, however, a recording on the corporate books of the transfer of
shares previously issued and then outstanding. For purposes of discussion, however, we will
accept Earl's assumption that the certificates involved in the present case all represented newly
issued shares. Much of Earl's argument also equates an intention to act with the act itself. We
will also accept for purposes of discussion this very doubtful assumption. Finally, Earl's entire
theory on appeal depends upon the legal rule that the acts of a sole shareholder may be tantamount
to the acts of the corporation itself. See Sutton v. Reagan & Gee, 405 S.W.2d 828, 836 (Tex.
Civ. App. 1966, writ ref'd n.r.e.); see also Caldwell v. Kingsbery, 451 S.W.2d 247, 251 (Tex.
Civ. App. 1970, writ ref'd n.r.e.) ("Where directors are the stockholders, they are the corporation
itself."). (7) We may take that rule only as far as its terms allow, however, and it cannot extend in
the present case so far as Earl would take it.
Earl's claim to own eighteen percent of 1500 outstanding shares requires a
determination that the corporation acquired as treasury shares the 5000 shares issued previously
to Craig, and a determination that the corporation thereafter issued 1500 new shares: 970 shares
issued to the trust; 270 shares issued to Earl; and 260 shares issued to Craig. (8) These actions, so
far as the evidence indicates, may have been inferred only from Craig's "intentions" in various
particulars under the rule that imputes to a corporation the informal actions of its sole shareholder.
Nevertheless, under Earl's own theory of the evidence, Craig was no longer a shareholder at all
after the corporation acquired as treasury stock the 5000 shares previously issued to Craig; under
Earl's theory, only the trust and Earl owned shares in Egghead. Thereafter, there could be no
application of the rule that would permit one to impute to Egghead any of Craig's informal actions
as a shareholder. Craig remained the only director, of course, but he might act in that capacity
only by formal resolution to the effect that the corporation: (1) acquired as treasury stock the
5000 shares previously issued to Craig; (2) issued 970 shares to the trust; (3) issued 240 shares
to Earl; and (4) issued 260 shares to Craig in consideration of something of value. There is no
evidence of any such resolutions by the board. Consequently, any issuance of 240 new shares to
Earl would be a nullity because Craig, as an individual, had no power to approve the issuance,
and as a director he could act only by a formal resolution which the evidence did not show. This
accounts for the trial court's theory that Craig transferred the 240 shares as a gift to Earl, the
certificate issued to Earl being only evidence of Craig's gift from among his 5000 shares.
The foregoing is not changed by the fact that Craig was the beneficiary of the trust.
Under the terms of the trust, only the trustee, the North Dallas Bank & Trust, and the co-trustee,
Charles Carruth, had the power to act on behalf of the trust, (9) and, of course, Craig had no power
to issue an additional 240 shares to Earl merely by virtue of his position as beneficiary of the
trust. (10)
The trial court determined that Earl and Linda owned jointly 5.37% of the
outstanding 5030 shares. If carried to the scope permitted by its terms, Earl's theory, based solely
upon the rule which imputes to a corporation the acts of its sole shareholder, would result in Earl
and Linda owning only thirty of 1000 outstanding shares, or three percent of those shares -- a
quantity less than that awarded by the trial court. Therefore, we need not consider whether the
trial court erred in any particular urged by Earl. It is apparent that any such error was harmless
and cannot require a reversal of the judgment below. Tex. R. App. P. Ann. 81(b) (Pamph. 1992).
We hold accordingly. We overrule both points of error and affirm the judgment.
John Powers, Justice
[Before Justices Powers, Jones and B. A. Smith]
Affirmed
Filed: February 26, 1992
[Do Not Publish]
1. Egghead Enterprises, Inc. is now dissolved. White sued, however, within three years of
the dissolution, a period during which the corporation continued its corporate existence for the
purpose of defending or prosecuting actions on claims existing, or any liability incurred, before
dissolution. See Tex. Rev. Civ. Stat. Ann. art. 1302-2.07 (1980) (since repealed by 1987 Tex.
Gen. Laws, ch. 93, § 48(b), at 230).
2. Although the articles of incorporation stated that Egghead was a close corporation and
allowed it to be managed by shareholders rather than by a board of directors, the parties
invariably treated the corporation as a director-managed corporation. Moreover, they did not
prepare a shareholder agreement to provide for shareholder management. See Tex. Bus. Corp.
Act Ann. art. 12.34 cmt (Supp. 1992) (stating that inclusion of a statement in the articles of
incorporation that a corporation is a close corporation does not authorize the corporation to
operate as a close corporation, but only authorizes the shareholders to enter into an agreement
providing for shareholders' management). We will analyze the issues as though this was an
ordinary corporation, and not a close corporation, although this distinction actually has no bearing
on the result reached by our analysis.
3. The fledgling corporation did not have the benefit of legal advice in preparing these
documents. Craig or Troy obtained a form book for corporations, and proceeded according to
the directions and forms in that book.
4. The documents prepared by Carruth are dated May 20, 1982. Apparently Carruth or one
of the parties backdated these documents because May 20 precedes the June 15 date reflected on
the minutes and bylaws taken from the form book. There would have been no need to sign the
form documents had Carruth already prepared other documents.
5. It is not clear whether the parties considered these shares to be compensation for Earl's
work on Egghead's behalf, or whether they were gifts from Craig to Earl and Linda. Craig, who
was partially paralyzed, lived with Earl and Linda and depended on them for transportation, care,
and companionship. In his testimony, Earl referred to the shares as a gift, although he also
implied by his testimony that he considered the shares compensation for services he and Linda had
performed for Craig.
6. Carruth testified that he "canceled" the shares by marking "certificate void" on the stock
register stub. Earl apparently concedes, however, that the corporation did not redeem and cancel
the shares according to the procedures set out in the relevant statutes. See Tex. Bus. Corp. Act
Ann. arts. 4.08, 4.10 and 4.11 (1980 & Supp. 1992) (outlining steps for redemption and
cancellation of shares). Earl argues instead that Carruth and others used the term "cancellation"
loosely to mean some character of reacquisition of the shares by the corporation, which created
5000 treasury shares and left no shares owned by anyone except the corporation itself.
7. Many other courts and commentators subscribe to this rule as well. See, e.g., Myhre v.
Myhre, 544 P.2d 276, 282 (Mont. 1976) (when directors of a corporation are its only
shareholders, they may act for the corporation without formal meetings); see also 18B Am.Jur.2d
Corporations § 1449 (1985) ("Action taken by directors who are sole shareholders without a
formal meeting is corporate action, and any corporate obligation so created is binding on the
corporation."); 2 William M. Fletcher, Fletcher Cyclopedia of the Law of Private Corporations
§§ 394, 394.1, 395, at 271-76 (Charles R. P. Keating, Charity R. Miller, and Timothy P. Bjur
eds., rev. ed. 1990).
8. We doubt whether this sequence of events posited by Earl could legally occur. The
corporation's acquisition of the 5000 shares, without compensation paid to Craig, means that he
must have made a gift to Egghead of his shares, and thereafter owned none of the corporation.
From August 1982 to August 1983, then, the corporation would have owned itself, because all
of its shares would have been treasury shares. We question the legality of this result.
Moreover, a year later the corporation would had to have made a gift of 970 shares to the
trust, because the trust gave no consideration for the shares. This would not be valid. See Tex.
Bus. Corp. Act Ann. art. 2.16 (1980) (since amended by 1983 Tex. Gen. Laws, ch. 540, § 4, at
3150). In fact, under this theory, Earl would own all of the Egghead shares, since only he
provided consideration in the form of labor performed for his thirty shares. We cannot conclude
Craig intended this result.
9. Even though Carruth was a co-trustee and was involved in the events Earl complains of,
there is no evidence, and no party has suggested, that Carruth was acting in his capacity as a
trustee when he assisted Craig in these purported transactions. Even if Carruth was acting in his
capacity as trustee, he could not transfer the corporation's assets to Earl without the knowledge
and acquiescence of North Dallas Bank & Trust. See Brown v. Donald, 216 S.W.2d 679, 683
(Tex. Civ. App. 1949, no writ) (stating that when the trust instrument names more than one
trustee, the trustees must act jointly unless express authority is given to the contrary because
action taken by a trustee separately is not binding on the trust).
10. The trust instrument signed by Craig stated, "I grant to all my fiduciaries discretion and
complete power to administer my estate and I grant to all my fiduciaries all powers conferred on
trustees by the Texas Trust Act on fiduciaries." At the time Craig executed the trust instrument,
the Texas Trust Act gave trustees with legal title to securities the power, "except as limited by the
. . . trust instrument, [to] have and exercise all powers of an absolute owner in respect of such
securities." Tex. Rev. Civ. Stat. Ann. art. 7425b-25(F) (1960) (since repealed and codified as
amended at Tex. Prop. Code Ann. § 113.016 (1984)). The trust instrument imposed no
restrictions on the trustees' power to administer the securities. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2857999/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-026-CR
MARK PHILLIP QUAM,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF WILLIAMSON COUNTY, 26TH JUDICIAL DISTRICT
NO. 90-222-K26, HONORABLE WILLIAM S. LOTT, JUDGE PRESIDING
Appellant entered a negotiated plea of guilty to the offense of aggravated possession
with intent to deliver cocaine. See Texas Controlled Substances Act, Tex. Health & Safety Code
Ann. § 481.112(d)(2) (Pamph. 1992). The court assessed punishment in conformity with the plea
bargain agreement at fifteen-years' confinement and a fine of five thousand dollars.
In a single point of error, appellant contends that the court erred in overruling his
motion to suppress evidence. While appellant's motion was in writing and ruled on before trial,
appellant's notice of appeal does not so state. Texas R. App. P. Ann. 40(b)(1) (Pamph. 1992)
provides in pertinent part:
Notice of appeal shall be given in writing filed with the clerk of the trial court.
Such notice shall be sufficient if it shows the desire of the defendant to appeal from
the judgment or other appealable order; but if the judgment was rendered upon his
plea of guilty or nolo contendere pursuant to Article 1.15, Code of Criminal
Procedure, and the punishment assessed does not exceed the punishment
recommended by the prosecutor and agreed to by the defendant and his attorney,
in order to prosecute an appeal for a nonjurisdictional defect or error that occurred
prior to entry of the plea the notice shall state that the trial court granted
permission to appeal or shall specify that those matters were raised by written
motion and ruled on before trial.
In order for appellant to prosecute his point of error complaining of the overruling
of his pretrial motion to suppress, it was necessary for appellant to comply with the notice of
appeal requirements set forth in Rule 40(b)(1). Otherwise, the point of error is not preserved for
review. Berger v. State, 780 S.W.2d 321, 323 (Tex. App. 1989, no pet.).
In Jones v. State, 796 S.W.2d 183 (Tex. Crim. App. 1990), a similar case, the
court stated that Rule 40(b)(1) is a restrictive rule. If a defendant wishes to appeal a matter that
is nonjurisdictional and occurred prior to the entry of his plea, then he must conform to the
requirements of the statute "and include within his notice what the grounds of appeal are and that
he received permission of the trial court to appeal." Jones, 796 S.W.2d at 186. (1) We find that
appellant's point of error was not preserved for review.
The judgment is affirmed.
Tom G. Davis, Justice
[Before Chief Justice Carroll, Justices B. A. Smith and Davis*]
Affirmed
Filed: February 19, 1992
[Do Not Publish]
* Before Tom G. Davis, Judge (retired), Court of Criminal Appeals, sitting by assignment.
See Tex. Gov't Code Ann. § 74.003(b) (1988).
1. Unlike Riley v. State, Nos. 000.1-91 and 00002-91 (Tex. Crim. App., January 29, 1992),
the record in the instant cause does not contain an order of the court reflecting that appellant was
assessed punishment in accordance with a plea bargain, that the trial court allowed appeal, and
that a motion to suppress was raised before trial. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/852936/ | 805 N.E.2d 795 (2004)
Alphonso WASHINGTON, Appellant (Defendant below),
v.
STATE of Indiana, Appellee (Plaintiff below).
No. 45S03-0403-PC-114.
Supreme Court of Indiana.
March 10, 2004.
Alphonso Washington, Appellant Pro Se.
Stephen Carter, Office of Attorney General, Indianapolis, IN, Attorney for Appellee.
DICKSON, Justice.
The defendant, Alphonso Washington, seeks transfer from the order of the Court of Appeals granting the State's motion to dismiss the appeal before the filing of the appellant's brief. The dismissal was based upon the appellant's case summary which stated that the defendant was appealing from the denial of a motion to correct sentence that was filed with authorization after prior post-conviction proceedings. The Court of Appeals dismissed the appeal on grounds that the defendant failed to comply with Indiana Post-Conviction Rule 1(12), which permits the filing of such successive petitions only upon prior authorization by the court. We grant transfer and affirm the judgment of the trial court.
*796 As we hold today in Robinson v. State, 805 N.E.2d 783 (Ind.2004), a motion to correct sentence pursuant to Indiana Code § 35-38-1-1 asserting a claim that is susceptible to determination from the face of the sentencing judgment is not in the nature of a post-conviction proceeding and is not subject to the requirement for prior authorization in P-C R. 1(2). Id. at 787-88. The defendant's appeal is not subject to dismissal on this grounds.
While the defendant's case summary identifies the appeal as challenging the denial of his motion to correct sentence, the defendant has not yet filed his appellant's brief, and we thus do not know whether he is challenging the abstract of judgment or the actual sentencing judgment of the trial court. Delaying this matter to permit further briefing is unnecessary because the abstract of judgment is not subject to attack by a motion to correct sentence, Robinson, 805 N.E.2d at 794, and the sentencing judgment here is adequate to designate pre-sentence credit time. Upon our examination of the trial court's order of judgment, however, we note that the trial court sentencing judgment states: "The defendant is given credit for 140 days pretrial confinement time." (emphasis added). While identifying confinement time, the judgment does not separately designate the amount of credit time earned thereby. In Robinson, we hold today that "[s]entencing judgments that report only days spent in pre-sentence confinement and fail to expressly designate credit time earned shall be understood by courts and by the Department of Correction automatically to award the number of credit time days equal to the number of pre-sentence confinement days." Id. at 791-92. Applying this presumption, the defendant's sentencing judgment establishes that he is entitled to 140 days credit for time spent in pre-trial confinement plus 140 days of credit time.
If the defendant wishes to contest the accuracy of the sentencing judgment's declaration regarding the number of days in pretrial confinement, such a claim would be outside the face of the sentencing judgment. The motion to correct sentence may not be used to present such a claim. Id. at 786-87.
Regardless of whether the defendant's appeal from the denial of his motion to correct sentence seeks to challenge the abstract of judgment or the sentencing judgment itself, the result is the same. The judgment of the trial court is affirmed.
SHEPARD, C.J., and SULLIVAN, BOEHM, and RUCKER, JJ., concur. | 01-03-2023 | 03-02-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/773271/ | 250 F.3d 244 (4th Cir. 2001)
UNITED STATES OF AMERICA, Plaintiff-Appellee,v.ROSANNA SUE NICHOLS FULCHER, a/k/a Rose Nichols, a/k/a Sue Nichols, a/k/a R. S. Nichols, a/k/a Rosanna Nichols, a/k/a Bo, Defendant-Appellant.UNITED STATES OF AMERICA, Plaintiff-Appellant,v.ROSANNA SUE NICHOLS FULCHER, a/k/a Rose Nichols, a/k/a Sue Nichols, a/k/a R. S. Nichols, a/k/a Rosanna Nichols, a/k/a Bo; MICHAEL EDWARD FULCHER, a/k/a Michael Ferguson; ETHEL VEST FULCHER, a/k/a Zelda Vest, a/k/a O.C. Vest, a/k/a Colin Vest, a/k/a Ann Smith, Defendants-Appellees.UNITED STATES OF AMERICA, Plaintiff-Appellee,v.MICHAEL EDWARD FULCHER, a/k/a Michael Ferguson, Defendant-Appellant.
No. 00-4167 No. 00-4200 No. 00-4219
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
Argued: March 1, 2001Decided: May 17, 2001
Appeals from the United States District Court for the Western District of Virginia, at Roanoke. Jackson L. Kiser, Senior District Judge. (CR-98-102)[Copyrighted Material Omitted]
COUNSEL ARGUED: Gerald Thomas Zerkin, GERALD T. ZERKIN & ASSOCIATES, Richmond, Virginia; Charles David Whaley, MORCHOWER, LUXTON & WHALEY, Richmond, Virginia, for Appellants. Joseph William Hooge Mott, Assistant United States Attorney, Roanoke, Virginia, for Appellee. ON BRIEF: David P. Baugh, Richmond, Virginia, for Appellant Ethel Fulcher. Robert P. Crouch, Jr., United States Attorney, Roanoke, Virginia, for Appellee.
Before NIEMEYER, LUTTIG, and WILLIAMS, Circuit Judges.
Affirmed by published opinion. Judge Luttig wrote the opinion, in which Judge Niemeyer and Judge Williams joined.
OPINION
LUTTIG, Circuit Judge:
1
Defendants Ethel, Michael, and Rosanna Fulcher were convicted by a jury of various money laundering and drug violations. Following trial, a government agent wrote an ex parte letter to the district court explaining that he may have led the defendants to believe that they were authorized to conduct the entire operation on behalf of the government. The district court granted a new trial to the defendants pursuant to Fed. R. Crim. P. 33, holding that the newly discovered evidence satisfied every requisite element for a new trial. For the reasons that follow, we affirm.
I.
2
This case arises out of the pervasive presence of drugs at Bland Correctional Center ("BCC"), an institution operated by the Virginia Department of Corrections. The network of drug distribution at BCC was extensive, involving inmates, prison officials, and even the relatives and girlfriends of inmates. The drug operation managed by Michael Fulcher ("Michael") was no exception.
3
Michael purchased his supply of marijuana from various prison officials, including prison guards and counselors. J.A. 413-14, 538, 554-55. He would then divide the drugs he received into smaller quantities -- most often teaspoon-sized servings-- for distribution to inmates at BCC. J.A. 265, 773. Since his customers were prohibited from using cash while incarcerated, inmates purchased the drugs with money orders written on their inmate trust accounts, remitting payment to a number of individuals located outside the prison, including Rosanna Fulcher ("Rosanna"), Michael's wife, and Ethel Fulcher ("Ethel"), Michael's mother. J.A. 266-67, 557, 783-84, 1078. The funds collected would then be used to purchase additional marijuana from prison officials, beginning the cycle anew.
4
The appellants, Michael and Rosanna, were charged in a 47-count indictment -- along with 22 other defendants -- with engaging in drug and money laundering conspiracies, as well as substantive counts of the same.1 The jury convicted Rosanna of a money laundering conspiracy and ten substantive counts of money laundering. J.A. 856-60. Michael was convicted of drug and money laundering conspiracies, a continuing criminal enterprise offense ("CCE"), and 17 substantive money laundering counts. J.A. 861-67.
5
On the eve of sentencing, the district court received an ex parte letter from Special Agent Donald O. Lincoln, Jr., of the Drug Enforcement Administration ("DEA"). J.A. 1074-79. In the letter, Lincoln explained that he rejected Michael's request to formally investigate the distribution of drugs at BCC for two reasons: (1) it would be impossible to ensure his safety from other inmates and prison guards while he was incarcerated; and (2) the amount of marijuana was "so minuscule that I advised him that there was no way that we could justify a Federal investigation on what would at best be misdemeanor level quantities." J.A. 1074.
6
Although Lincoln never formally granted permission for Michael to initiate a formal drug investigation, Lincoln nonetheless stated his concern that he, along with state law enforcement officers working with the DEA, may have provided Michael with the mistaken impression that he had tacit approval to investigate drug dealing at BCC. J.A. 1075. Specifically, Lincoln explained:
7
It has come to my attention that in my absence Mr. Fulcher would periodically talk to Deputy Kenny Parker of the Botetourt County Sheriff's Office, who was working in the DEA Office, serving as a DEA Task Force Officer at that time. In these conversations Mr. Fulcher told Deputy Parker what he was working on. Deputy Parker, believing that the operation had already been approved by me, discussed a number of options with Mr. Fulcher. One of these involved arranging for one or more of the guards who were involved to make an attempted pickup of marijuana from Deputy Parker, in an undercover capacity, in Botetourt County. Under those circumstances the case could have been taken to State Court in Botetourt or, if it developed into something interstate or substantial it could be brought to Federal Court. Deputy Parker discussed this potential operation with Sheriff Reed Kelly, and both of them recall the conversations. In addition Deputy Parker reminded me of a conversation he had with me concerning setting up a potential sting operation against a prison guard, to go down at a Botetourt County truck stop.
8
J.A. 1074-75. Lincoln also stated in the letter that during his numerous telephone conversations with Michael over a three-year period, [t]here were indeed times when I was in a hurry to get him off the phone due to other commitments. If I said anything in haste which led him to believe he was "covered" it may be the proximate cause of all of this. I honestly do not recall ever saying anything to that effect, but if Task Force Agent Parker and Sheriff Kelly also believe that I did, then I must lend credibility to the possibility. I don't know what if any consideration can be given to all that I have related here, your Honor, but I felt it incumbent on me to state the facts as I now know them.
9
J.A. 1079.
10
On the basis of the letter, appellants filed a motion (which Ethel joined), asserting that they were entitled to a new trial on the basis of newly discovered evidence pursuant to Fed. R. Crim. P. 33. The district court held an evidentiary hearing, in which both Lincoln and Deputy Parker testified. Lincoln stated that David Fulcher, Michael's father, told him that Michael and Parker had spoken on several occasions concerning a possible sting operation. J.A. 927, 933, 935-36. According to Lincoln, Parker told him that he had talked with Michael several times regarding a possible drug operation, and that Parker had discussed a number of options with Michael about how to set up a sting operation involving prison officials. J.A. 936-39. On redirect, Lincoln acknowledged that, since his testimony at the pretrial hearing, his opinion regarding whether the Fulchers may have believed that they were authorized to conduct the operation had changed:
11
Q All right. Now during your July testimony, June testimony [sic] in the courtroom, I asked you a question about, "Did you ever do anything that in your estimation could have been construed as permission to conduct this investigation?" And do you recollect your answer as being, "No"?
12
A I probably did say that, and I guess that's -- . . .
13
Q Are you now of the opinion that you could have been communicating to him and his mother that if the case was bigger it would be prosecuted and he could get his sentence reduced?
14
A I don't know, but, yes, that's my primary concern at this point.
15
Q Do you believe you might have?
16
A Yes. And if not me, then the fact that he talked to the other people in my office or to other people in my office [sic] and he felt that they somehow blessed it, then there is the very real possibility, especially from the part of Mrs. Fulcher.
17
J.A. 984-85, 990-91 (emphases added).
18
On the basis of the letter and the testimony adduced at the evidentiary hearing, the district court granted the motion for a new trial, holding that the newly discovered evidence was material because it was directly related to the public authority defense2 and to whether the defendants possessed the requisite mens rea for their crimes. J.A. 1054, 1056-57. The district court also denied appellants' motions for judgment of acquittal pursuant to Fed. R. Crim. P. 29. Appellants filed a timely notice of appeal challenging their convictions, and the government cross-appeals the district court's decision to grant a new trial.
II.
19
The government argues on appeal that the district court erred in granting a new trial to defendants on the basis of newly discovered evidence.
20
Under Fed. R. Crim. P. 33, "[o]n a defendant's motion, the court may grant a new trial to that defendant if the interests of justice so require." In determining whether a new trial should be granted under Rule 33 for newly discovered evidence, this court utilizes a five-part test:
21
(a) the evidence must be, in fact, newly discovered, i.e., discovered since the trial; (b) facts must be alleged from which the court may infer diligence on the part of the movant; (c) the evidence relied on must not be merely cumulative or impeaching; (d) it must be material to the issues involved; and (e) it must be such, and of such nature, as that, on a new trial, the newly discovered evidence would probably produce an acquittal.
22
United States v. Custis, 988 F.2d 1355, 1359 (4th Cir. 1989). Without ruling out the possibility that a rare example might exist, we have never allowed a new trial unless all five elements were established. See United States v. Singh, 54 F.3d 1182, 1190 (4th Cir. 1995).
23
The district court made extensive findings on each of the elements of the Custis test and, of course, we review for an abuse of discretion the district court's decision to grant a new trial based on those findings. Singh, 54 F.3d at 1190. Under the abuse of discretion standard, "this Court may not substitute its judgment for that of the district court; rather, we must determine whether the court's exercise of discretion, considering the law and the facts, was arbitrary or capricious." United States v. Mason, 52 F.3d 1286, 1289 (4th Cir. 1995). Since the government challenges the district court's application of each of the Custis elements to the facts of this case, we review each in turn.
A.
24
The first element of Custis is whether the evidence is, "in fact, newly discovered." 988 F.2d at 1359. The district court held that Lincoln's letter was "newly discovered" since it mentioned new facts that added a "dimension to Lincoln's testimony that was not known before." J.A. 1055. We agree.
25
For instance, during the pre-trial motions hearing, Lincoln unequivocally testified that he did not say or do anything that could have been construed by Michael as permission to conduct an investigation at BCC under any circumstances, primarily due to concerns about Michael's safety while incarcerated. J.A. 231-32, 248-49. In contrast, at the post-trial evidentiary hearing, Lincoln testified that he and other members of his office might have communicated to Michael that if the case were bigger and involved a larger amount of drugs, the government might be interested in pursuing it further. J.A. 990-91; see also J.A. 1051-52 ("[N]ew to Lincoln's testimony is his assertion that, when first discussing with Michael the investigative work he had completed on the BCC marijuana ring, Michael told him that he had been trying to collect evidence the DEA might be more interested in by finding interstate connections and by working his way up the prison's chain of command."). As the district court found, the latter testimony "indicate[d] that Lincoln made statements to Michael and Ethel that he failed to tell this court about before the trial." J.A. 1051.
26
It is undisputed that this new testimony was not within the defendants' possession prior to or during trial, and that it only came to light when Lincoln himself -- of his own accord -- decided to write an ex parte letter to the district court on the eve of sentencing. Because the evidence contained in the letter and presented at the post-trial hearing was not discovered until after the trial, the district court did not abuse its discretion in holding that it constituted "newly discovered evidence." Singh, 54 F.3d at 1190 (stating that "newly discovered evidence" means "evidence discovered since the trial").
B.
27
The second element of Custis is whether there are facts alleged "from which the court may infer diligence on the part of the movant." 988 F.2d at 1359. The district court specifically found that "based on the substance and style of Lincoln's pre-trial testimony, any more specific questioning on this matter by the defendants would not have produced the same helpful evidence now before the court." J.A. 1052.
28
The court reached that conclusion primarily because"Lincoln's pretrial testimony was particularly unfavorable to the Fulchers by insisting that there was nothing ambiguous about his refusal to allow Michael to investigate the matter." J.A. 1053. The district court's finding is amply supported by the record. The defendants engaged in a lengthy cross-examination of Lincoln during the pre-trial hearing, and as the district court correctly noted, there is simply no indication from the record that a more probing crossexamination would have elicited any of the facts that came to light following the trial. In fact, the record supports an inference to the contrary, since Lincoln stated in his letter that he"testified as truthfully and accurately as possible" at the pre-trial hearing and that any
29
change in his testimony could be attributed, at least in part, to facts "coming to [his] attention" through his conversations with Deputy Parker and David Fulcher in the months following the hearing. J.A. 1074.
30
Therefore, we cannot say that the district court abused its discretion in concluding that there were facts from which it could infer due diligence on the part of the defendants.
C.
31
The third element of Custis is whether the newly discovered evidence is "not [ ] merely cumulative or impeaching." 988 F.2d at 1359. The government contends that any newly discovered evidence is cumulative because the defendants could have testified regarding their own intent and, in particular, Michael could have testified about his conversations with Parker or Lincoln. We disagree for two reasons.
32
First, for evidence to be cumulative under Rule 33, it must be "additional evidence to that which was presented at trial as to a fact." United States v. White, 972 F.2d 16, 20 (2d Cir. 1992). The district court noted that "Michael and Ethel made a rational decision not to take the stand in part because they had no one to corroborate them on this issue of intent." J.A. 1054. Because the jury did not hear any evidence at trial relating to defendants' intent or the public authority defense, the newly discovered evidence is not cumulative.
33
Second, evidence is only cumulative "when it adds very little to the probative force of the other evidence in the case so that if it were admitted its contribution to the determination of truth would be outweighed by its contribution to the length of trial." United States v. Williams, 102 F.3d 320, 325 (7th Cir. 1996); see also Elwood v. Pina, 815 F.2d 173, 178 (1st Cir. 1994) ("Evidence is cumulative if repetitive, and if the small i ncrement of probability it adds may not warrant the time spent in introducing it.") (quoting 1 Weinstein's Evidence P 401[07] (1985)) (emphasis added). The district court, however, made a specific finding about the probative force of Lincoln's testimony -- namely, that its addition would paint a"significantly more persuasive picture than the one presented to the jury at trial." J.A. 1054. Lincoln's testimony is more persuasive not only because he is a disinterested witness, but also because of his status as a DEA agent who was involved to some extent in the prosecution of this case.
34
Therefore, the testimony of Agent Lincoln cannot be dismissed as cumulative since the probative force of his testimony at a new trial would be, according to the district court, significantly greater than the testimony of the defendants alone.
35
Thus, the district court did not abuse its discretion in holding that the newly discovered evidence is "not [ ] merely cumulative or impeaching."
D.
36
The fourth element of Custis is whether the newly discovered evidence is "material to the issues involved." 988 F.2d at 1359. The government's principal argument on appeal is that the district court misapplied the defenses of public authority and mistake of fact and, in doing so, granted a new trial when the newly discovered evidence is not material.
37
At the post-trial evidentiary hearing, the following colloquy took place between Lincoln and Assistant United States Attorney Mott regarding whether Lincoln had actual authority to authorize money laundering activities:
38
Q If you were conducting a money laundering investigation, would you expect to document where the money went?
39
A Yes. And first and foremost I would expect to have to get an attorney's general's exemption to do it.
40
Q And in a money laundering case you've got to go to the AG to get an exemption?
41
A You have to go to the AG. That's why I would never have authorized him to do that without permission.
42
J.A. 1000 (emphasis added). Lincoln further testified to the following when asked about his authority to authorize a drug operation of the type managed by Michael:
43
Q And kind of a paramount rule in drug investigations is that you don't let the drugs walk?
44
A Correct.
45
Q And that means you would never allow Mr. Fulcher to sell marijuana to someone without recovering it very shortly thereafter?
46
A That's correct.
47
Q You would never authorize him to conduct drug sales on behalf of the DEA?
48
A That's true, and he knows that.
49
J.A. 1000-01 (emphasis added).
50
On the basis of Lincoln's testimony, the government argues that Lincoln and his colleagues possessed, at most, apparent authority to approve the operation undertaken by the Fulchers, and that such authority was insufficient to either negate intent or to support the defense of public authority. Though we agree with the legal arguments advanced by the government, we nonetheless conclude that there is insufficient evidence in the record regarding the extent of Lincoln's authority (or that of his colleagues at the DEA). Thus, we ultimately hold that the district court did not abuse its discretion when it concluded that the newly discovered evidence was material.
1.
51
The defendants first seek to introduce Lincoln's testimony for the purpose of negating criminal intent. "The defendant may allege that he lacked criminal intent because he honestly believed he was performing the otherwise-criminal acts in cooperation with the government. Innocent intent is not a defense per se , but a defense strategy aimed at negating the mens rea for the crime, an essential element of the prosecution's case." United States v. Baptista-Rodriguez, 17 F.3d 1354, 1368 n.18 (11th Cir. 1994).
52
While an honest belief that a defendant is acting in cooperation with the government is a necessary element of establishing innocent intent, it is not alone sufficient. That is, evidence that defendants "honestly believed" that they acted in concert with a government official could abrogate the criminal intent necessary to prove the particular crimes with which the defendants were charged,3 but, as we have recognized previously, any such abrogation also depends upon the nature of that official's authority.
53
For instance, if a government official possessed actual authority to authorize the defendants' activity, then criminal intent certainly would be negated by the defendant's honest belief that he was cooperating with such an official. See, e.g. , Baptista-Rodriguez, 17 F.3d at 1368 n.18; United States v. Duggan, 743 F.2d 59, 83 (2d Cir. 1984). However, if the official possessed neither actual nor apparent authority to authorize the otherwise criminal activity, then criminal intent would not be negated. See United States v. Kelly, 718 F.2d 661, 665 (4th Cir. 1983).
54
The question most readily presented by Lincoln's testimony, and a question we have not heretofore addressed, is neither whether intent is negated when a defendant acts in concert with an official who does not possess either actual or apparent authority nor whether criminal intent is negated when a defendant acts in cooperation with an official with actual authority but, rather, whether the criminal intent for the crimes with which these defendants were charged is negated if they were acting in conjunction with an official who possesses only apparent authority. We hold, consistent with our sister circuits that have considered the question, that intent is not negated when a defendant cooperates with an official who possesses only apparent authority.
55
Essentially, defendants argue that, if they acted at the direction of an official who possessed apparent authority, they would lack the requisite mens rea for the crimes with which they were charged. According to defendants, under such a circumstance, they would have made only a mistake of fact -- a cognizable defense negating intent when the mens rea requirement for a crime is at least knowledge -- regarding whether DEA officials possessed actual authority to authorize their drug and money laundering activities. See United States v. Fuller, 162 F.3d 256, 262 (4th Cir. 1998) (stating that a mistake of fact is a cognizable defense to an offense requiring knowledge).
56
Any such defense is foreclosed, however, by our reasoning in Kelly. There, the defendant relied on a government informant who enlisted his help to assist in a government operation. 718 F.2d at 664. The defendant argued that if he acted at the invitation of the informant, he could not have possessed the requisite criminal intent for conspiracy to distribute drugs. See id. at 665. We disagreed, explaining that defendant's mistake arose not from "a mistake of fact as to the [informant's] status, but resulted from a misconception of the legal prerogatives attached to that status." Id. We thus held that if the defendant "indeed acted on the basis of a mistake. . . it was a mistake of law, not a mistake of fact." Id. Of course, since defendant's error was a mistake of law, his belief did not constitute a defense to his criminal act. See id. at 665; see also Fuller, 162 F.3d at 262 ("[A] mistake of law such as claimed by Fuller is no defense because the background presumption must be that `every citizen knows the law.'").
57
Though we did not address in Kelly whether a defendant's intent may be negated when he acts pursuant to an official's apparent authority, the reasoning of that case compels us to now answer that question in the negative. For, reliance on the apparent authority of a government official is nothing more than a mistake about "the legal prerogatives attached" to such status and thus constitutes a mistake of law. See United States v. Rosenthal, 793 F.2d 1214, 1235-36 (11th Cir. 1986) (stating that a "defendant may only be exonerated on the basis of his reliance on real and not merely apparent authority."); Duggan, 743 F.2d at 83 ("The mistake that defendants advance here as an excuse for their criminal activities -- their reliance on Hanratty's purported authority -- is an error based upon a mistaken view of legal requirements and therefore constitutes a mistake of law.").
58
Therefore, we hold that criminal intent is negated if two elements are met: (1) the defendant honestly believed that he was acting in cooperation with the government, and (2) the government official or officials upon whose authority the defendant relied possessed actual authority to authorize his otherwise criminal acts.
2.
59
Defendants also seek to introduce Lincoln's testimony to support their defense of public authority. The public authority defense allows "the defendant [to] seek[ ] exoneration based on the fact that he reasonably relied on the authority of a government official to engage him in a covert activity." Baptista-Rodriguez, 17 F.3d at 1368 n.18; see also United States v. Achter, 52 F.3d 753, 755 (8th Cir. 1995). Thus, in contrast to the innocent intent doctrine, this affirmative defense allows a defendant to seek exoneration based upon his objectively reasonable reliance on the authority of a government official.
60
We have never addressed the scope of the public authority defense, and, in particular, we have never explained whether such a defense entitles a defendant to rely on the apparent authority of a government official or whether actual authority is necessarily required. However, we again find Kelly persuasive in answering this question. As explained above, Kelly stands for the proposition that any mistake about "the legal prerogatives" attached to a person's status is not a defense to a criminal act. See supra at 14. Our recognition of an apparent public authority defense would contravene Kelly by creating an affirmative defense in precisely such circumstances.4
61
Accordingly, we adopt the unanimous view of our sister circuits that the defense of public authority requires reasonable reliance upon the actual authority of a government official to engage him in a covert activity.5 See United States v. Pitt, 193 F.3d 751, 758 (3d Cir. 1999) (stating that the public authority defense is limited "to those situations where the government agent in fact had the authority to empower the defendant to perform the acts in question"); United States v. MattaBallesteros, 71 F.3d 754, 770 n.12 (9th Cir. 1995) (stating that where "a CIA agent could not lawfully authorize the violation of the federal drug laws," the defense of public authority was not available); United States v. Holmquist, 36 F.3d 154, 161 nn.6-7 (1st Cir. 1994) ("The nonexistent defense of apparent public authority . .. must not be confused with the potentially viable defense of actual public authority which may come into play when a defendant undertakes certain acts, reasonably relying on the statements of a government agent cloaked with actual authority."); Baptista-Rodriguez , 17 F.3d at 1368 n.18 ("If the agent had no such power, then the defendant may not rest on the `public authority'; reliance on the apparent authority of a government official is not a defense in this circuit, because it is deemed a mistake of law, which generally does not excuse criminal conduct.").
3.
62
The government requests that we decide as a matter of law that the newly discovered evidence is not material despite the deferential standard of review we employ in reviewing a district court's decision to grant a new trial. We decline to reach that conclusion because neither party has been furnished with an opportunity to introduce any evidence regarding whether Lincoln or his colleagues at the DEA possessed actual authority to sanction defendants' money laundering and drug activities. Furthermore, while Lincoln's testimony certainly suggests that these officials did not possess such authority, his testimony does not conclusively establish that this is so, especially with regard to Michael's drug activities. J.A. 1000-01 (testifying that he would not authorize Michael to conduct drug sales on behalf of the DEA).
63
Therefore, if defendants can establish at a new trial that DEA officials authorized them to conduct the operation and that such officials had the actual authority to do so, defendants would be entitled to appropriate jury instructions on the defenses of public authority and innocent intent.6 Since the jury would then be entitled to acquit the defendants if it concluded that defendants' activities were legitimately authorized, we hold that the district court did not abuse its discretion in concluding that the newly discovered evidence is"material to the issues involved."
E.
64
The fifth element of Custis is whether the evidence is "such, and of such nature, as that, on a new trial, the newly discovered evidence would probably produce an acquittal." 988 F.2d at 1355. Much of our analysis on the third and fourth elements of Custis is equally applicable here. In particular, we again note that the persuasive value of Lincoln's testimony cannot be underestimated due to his status as a DEA agent who participated in the investigation of this case. Furthermore, as the district court observed, if the jury credits Lincoln's testimony that DEA officials may have led defendants to believe that they were acting pursuant to governmental authority, "it would certainly create[ ] a record more favorable for the Fulchers." J.A. 1055. Therefore, we cannot say that the district court abused its discretion in concluding that the newly discovered evidence "would probably produce an acquittal."
CONCLUSION
65
For the foregoing reasons, the district court's decision to grant a new trial to defendants is affirmed and the case is remanded for further proceedings consistent with this opinion.7
AFFIRMED
Notes:
1
Ethel -- who joins this case only to oppose the government's appeal of the district court's grant of a new trial -- was convicted of a money laundering conspiracy and nine substantive counts of money laundering.
2
Only Michael and Ethel filed the requisite notices under Fed. R. Crim. P. 12.3(a)(1) indicating that they would be relying on the public authority defense. J.A. 75, 113.
3
See, e.g., 18 U.S.C.S 1956(a)(1) (substantive money laundering counts; requiring the government to prove that the defendant "know[s] that the property involved in a financial transaction represents the proceeds of some form of illegal activity") (emphasis added); United States v. Burgos, 94 F.3d 849, 858 (4th Cir. 1996) (en banc) (conspiracy; requiring government to prove, inter alia, a defendant's connection to the conspiracy beyond a reasonable doubt including a knowledge element, which requires that a defendant at least have "join[ed] the conspiracy with an understanding of the unlawful nature thereof and willfully join[ed] in the plan on one occasion" (emphasis added)) (quoting United States v. Roberts, 881 F.2d 95, 101 (4th Cir. 1989)).
4
The view we adopt today is also faithful to the common law origin of the public authority defense. As the Third Circuit has pointed out, under the public authority defense at common law"illegal actions committed by a public official or an officer of the law in the course of his duties were not crimes." United States v. Pitt, 193 F.3d 751, 756 (3d Cir. 1999). Thus, requiring an official to possess actual authority is consonant with the common law requirement that actions be taken "under color of public authority" for invocation of the defense. United States v. ReyesVasquez, 905 F.2d 1497, 1500 n.5 (11th Cir. 1990); see generally Paul H. Robinson, Criminal Law Defenses S 142 (1984).
5
We recognize that Rule 12.3(a)(1) requires a defendant to provide notice to the government if he intends to claim either "a defense of actual or believed exercise of public authority on behalf of a law enforcement . . . agency at the time of the alleged offense." Fed. R. Crim. P. 12.3(a)(1) (emphasis added). Since Rule 12.3 is merely a notice provision and does not in any way alter the substantive legal standards with regard to the public authority defense, we agree with the Third Circuit's conclusion in Pitt "that the law in jurisdictions where actual authority was required was not altered" by the promulgation of Rule 12.3. 193 F.3d at 757.
6
Of course, as a result of our decision today, if the district court instructs the jury on innocent intent and the public authority defense at a new trial, it should also provide an appropriate instruction articulating that reliance on the apparent authority of a government official is not a viable defense.
7
In light of our conclusion that the district court properly granted a new trial, we need address only one additional issue on appeal. Michael contends that his indictment was defective because it failed to provide him with proper notice of the three drug-related violations underlying the continuing criminal enterprise count. His argument is without merit, however, because the CCE count in the indictment expressly incorporated by reference the predicate drug violations upon which the jury relied in convicting Michael. See United States v. Tipton, 90 F.3d 861, 863 (4th Cir. 1996) (holding that an indictment which incorporated by reference the predicate drug-related violations was sufficient to provide adequate notice for a CCE count). | 01-03-2023 | 04-18-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/781845/ | 328 F.3d 145
Alfred G. KING, Plaintiff-Appellant,v.Donald RUMSFELD, Secretary, United States Department of Defense, Defendant-Appellee.
No. 02-1313.
United States Court of Appeals, Fourth Circuit.
Argued: February 24, 2003.
Decided: May 8, 2003.
COPYRIGHT MATERIAL OMITTED ARGUED: Susan M. Andorfer, Susan M. Andorfer, L.T.D., Belleville, Illinois, for Appellant. Rachel Celia Ballow, Assistant United States Attorney, Alexandria, Virginia, for Appellee. ON BRIEF: Carolyn P. Carpenter, Carpenter Law Firm, Richmond, Virginia, for Appellant. Paul J. McNulty, United States Attorney, Alexandria, Virginia, for Appellee.
Before WILKINS, Chief Judge, and LUTTIG and GREGORY, Circuit Judges.
Affirmed by published opinion. Judge LUTTIG wrote the opinion, in which Chief Judge WILKINS joined. Judge GREGORY wrote an opinion concurring in part and dissenting in part.
OPINION
LUTTIG, Circuit Judge:
1
Appellant Alfred G. King appeals the district court's order granting summary judgment in favor of his former employer, the United States Secretary of Defense, on his race and sex discrimination and retaliation claims brought under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e to 2000e-17. Because King has not presented a prima facie case as to his race and sex discrimination claims and because he has not overcome his employer's asserted legitimate motive in terminating him with respect to his retaliation claims, we affirm.
I.
2
The relevant facts of this case are straightforward. In 1996, King, a black man, was hired as a teacher by the Department of Defense (DOD) Dependent Schools, subject to a two-year probationary period. During the time of his probationary employment, King was reprimanded and counseled on multiple occasions by different superiors for using profanity around the students and for belittling them. King's first supervisor, Thomas Whitaker, was the first to take notice of and to confront King about this behavior. When Whitaker took medical leave, his successor, Douglas Carlson, heard similar reports of King's unsuitable conduct and similarly reprimanded and counseled King.
3
Because King was a probationary teacher and because his conduct concerned Carlson, Carlson began to review other aspects of King's work, including his lesson planning. Ultimately, Carlson concluded that King's job performance was inadequate, as reflected by his lesson planning, among other factors.1 Carlson shared his conclusion with King and counseled him as to how he might improve his performance. Following a subsequent performance review — which this time culminated with Carlson telling King he could be terminated based upon his performance — Carlson received notice from the DOD Office of Complaint Investigations that King had filed an Equal Employment Opportunity (EEO) complaint against him.
4
Before Carlson took any definitive action with respect to King's employment, Whitaker returned from his medical leave. Upon returning, Whitaker met with Carlson to discuss King's performance. Whitaker reviewed the many notes Carlson kept of his conferences with King and of King's job performance. Whitaker then met with King on two occasions and asked King to explain his side of the events that occurred while Whitaker was away. Following these meetings, Whitaker decided to evaluate King himself before making a decision regarding his termination. Whitaker observed King's classes on several occasions and talked to several of King's students. Following his own review, Whitaker decided to terminate King prior to the end of his two-year probationary period.
5
King then brought this action alleging that he was terminated for discriminatory motives and that his termination was a retaliatory action against him for filing an EEO complaint. To support his claim, King proffered evidence (1) that another probationary teacher, a white man, whose conduct had generated complaints from students and parents was not fired;2 (2) that Carlson picked on him; (3) that a substitute teacher had been pressured by Carlson into providing a critical review of King after substituting for him; (4) that upon learning of King's EEO complaint Carlson said to him, "[t]hat's what you people always say when you screw up;" and most importantly, as will quickly become evident, (5) that other teachers at the school considered King's lesson plans not to be substantially different from their own plans.
6
Upon motion for summary judgment, the district court granted judgment to appellee. The court determined that King's proffer failed to establish a prima facie case of race or sex discrimination because it did not contain evidence that King's job performance was satisfactory at the time of his discharge. The court also determined that King failed to establish a prima facie retaliatory discharge claim.
II.
7
We review an award of summary judgment de novo. Higgins v. E.I. DuPont de Nemours & Co., 863 F.2d 1162, 1167 (4th Cir.1988). Summary judgment is appropriate only if there are no material facts in dispute and the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). We view the evidence in the light most favorable to the non-moving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
A.
8
To establish a prima facie case of discriminatory discharge, King must show: (1) that he is a member of a protected class; (2) that he suffered from an adverse employment action; (3) that at the time the employer took the adverse employment action he was performing at a level that met his employer's legitimate expectations; and (4) that the position was filled by a similarly qualified applicant outside the protected class. See Brinkley v. Harbour Recreation Club, 180 F.3d 598, 607 (4th Cir.1999). This case turns on King's inability to demonstrate the third factor — that at the time of his discharge he was performing at a level that met appellee's legitimate expectations.
9
Appellee offered substantial evidence that King was not in fact meeting legitimate job performance expectations, chronicling in detail King's poor performance and his supervisors' numerous concerns. King's response to appellee's evidence is limited to his own claim of satisfactory job performance and to testimony he elicited from his fellow teachers to the effect that his lesson plans were substantially comparable to their own. Neither testimony can sustain a challenge to appellee's proffer that King was not in fact meeting appellee's legitimate performance expectations.
10
King's own testimony, of course, cannot establish a genuine issue as to whether King was meeting appellee's expectations. See Evans v. Technologies Applications & Serv. Co., 80 F.3d 954, 960-61 (4th Cir.1996) ("It is the perception of the decision maker which is relevant, not the self-assessment of the plaintiff." (citations omitted)). Nor can the fact testimony of King's co-workers that his lesson plans were comparable to theirs establish this genuine issue. Proof that King's performance was comparable to his co-workers' is not proof that King's performance met appellee's legitimate job performance expectations. It is only proof that his work looked like that of his co-workers, a fact that, without more, does not bear on the critical inquiry.3 For this reason we have long rejected the relevance of such testimony and held it to be insufficient to establish the third required element of a prima facie discrimination case. See, e.g., Hawkins v. PepsiCo, Inc., 203 F.3d 274, 280 (4th Cir.2000) ("The alleged opinions of Hawkins' co-workers as to the quality of her work are [ ] close to irrelevant." (citation omitted)); Tinsley v. First Union Nat'l Bank, 155 F.3d 435, 444 (4th Cir.1998) ("[A]lthough the affidavits put forth by Tinsley document the fact that certain co-workers, Bank customers, and attorneys believed Tinsley was doing a good job, they fail to address whether management honestly believed that Tinsley was doing a good job." (emphasis added)).
11
The irrelevance of King's co-workers as fact witnesses does not, as King contends, foreclose employees like him from ever proving a prima facie case of race and sex discrimination. King argues that our rule only allows employees to satisfy the prima facie standard in the unique, and employer-controlled, circumstance where the employer either (1) concedes that the employee was performing satisfactorily at the time of discharge, or (2) has previously given the employee positive performance reviews that establish this third element. But such is not the case. For King to establish that his work met appellee's legitimate job performance expectations he had only to offer qualified expert opinion testimony as to (1) appellee's legitimate job performance expectations and (2) analysis and evaluation of King's performance in light of those expectations.
12
It is not inconceivable that a plaintiff's co-workers could qualify as expert witnesses to testify as to their employer's legitimate job performance expectations and as to their own analysis and evaluation of the plaintiff's performance in light of those expectations. But King never proffered his co-workers in this capacity. And, even had the co-workers been so proffered, their testimony never touched on either of these two critical inquiries. King's co-workers' testimony was limited to the fact observation that King's lesson plans looked like theirs, and, arguably, to the fact that they believed King's work met appellee's expectations. Since testimony as to the fact that King's work looked like that of his co-workers, or even as to the fact that they believed his work met appellee's expectations, does not establish what expectations appellee could legitimately have, it cannot begin to answer the first step of the inquiry. Nor, obviously, can it answer the second step of the inquiry — an evaluation of King's work under appellee's as-of-yet unidentified legitimate expectations. Failing to address what expectations of King appellee could legitimately maintain and failing to analyze King's work in light of such opined expectations, the co-workers' fact testimony cannot build a prima facie case for King.4
13
Because King cannot establish that his job performance satisfied appellee's legitimate expectations, and so cannot establish a prima facie case, his other allegations — that a similarly situated white, probationary teacher was not fired after complaints were raised about him, and that Carlson picked on him, asked a substitute to critique him, and ultimately told him "[t]hat's what you people always say when you screw up" — are irrelevant to the inquiry. These allegations, as King recognizes, go to the issue of whether appellee's explanation of King's discharge is pretextual. But, since King never established a prima facie case as to his discrimination claims, appellee is under no duty to supply an explanation for King's discharge. See Brinkley, 180 F.3d at 607 ("Once the prima facie case is established, the burden shifts to the employer to articulate a legitimate, nondiscriminatory reason for the adverse employment action." (emphasis added)). Because appellee is freed from having to justify the discharge (with respect to the discrimination claims), King's evidence-in-waiting, prepared to rebut any justification, is of no moment.
B.
14
The district court also concluded that King failed to make out a prima facie case of retaliatory discharge. We disagree. We conclude that King did indeed make out a prima facie case of retaliation. However, appellee offered a legitimate, non-retaliatory motive for King's termination, as to which proffer King has not offered evidence of pretext.
15
To make out a prima facie case of retaliation, King must show (1) that he engaged in a protected activity; (2) that his employer took an adverse employment action against him; and (3) that a causal connection existed between the protected activity and the asserted adverse action. See Williams v. Cerberonics, Inc., 871 F.2d 452, 457 (4th Cir.1989). Here, King's filing of the EEO complaint was protected activity, and his termination indisputably constituted adverse employment action. Moreover, that his termination came so close upon his filing of the complaint gives rise to a sufficient inference of causation to satisfy the prima facie requirement. See id. ("Appellant's proof of a causal connection between the protected activity and her discharge was that she was fired after her employer became aware that she had filed a discrimination charge. While this proof far from conclusively establishes the requisite causal connection, it certainly satisfies the less onerous burden of making a prima facie case of causality.").5
16
Appellee, however, proffered a legitimate, non-retaliatory discharge motive — that King was not meeting appellee's job performance expectations — after King shifted the burden to it by establishing his prima facie case. See id. ("Once this prima facie evidence [of retaliatory discharge] is established, it must be rebutted by legitimate nonretaliatory reasons[.]"). Appellee thus shifted the burden back to King with his proffer. See Womack v. Munson, 619 F.2d 1292, 1296 (8th Cir. 1980) (following the employer's proffer of a legitimate, non-retaliatory reason for an adverse employment action the burden of persuasion remains with the plaintiff to prove that the employer's reason is pretext, a cover-up for retaliation).
17
None of King's various allegations — that a similarly situated white, probationary teacher was not fired after complaints were raised about him, and that Carlson picked on him, asked a substitute to critique him, and ultimately told him "[t]hat's what you people always say when you screw up" — contradict appellee's proffered discharge motive.
18
Nor are they probative in the manner that the dissents suggests. For example, the dissent says:
19
[T]hat Whitaker was aware of reports of ongoing misconduct by Moore — post reprimand ... establishes a solid basis for the permissible inference ... that the administrators knew that Moore's misconduct continued beyond reprimand[.]
20
Post at 156. But, evidence that a parent wrote to the school to complain about this other teacher after that teacher was reprimanded cannot establish that King and that teacher were similarly situated. To establish that King and that teacher were similarly situated, King must proffer evidence that school administrators believed that the other teacher had, like King, continued his misconduct beyond reprimand. To prove this, either King must directly proffer evidence of the administrators' beliefs, or he must proffer evidence that the other teacher's misconduct did in fact continue beyond reprimand. Of course, the latter proof form is relevant only insofar as it might make possible the inference that despite the administrators' protestations to the contrary, they did in fact know about the misconduct.
21
King does not present the first form of proof here — testimony that the administrators believed the two teachers were similarly situated in the relevant respect. The administrators testified they believed the other teacher had ceased his misconduct. King proffered no evidence to contradict their testimony directly. The letter from the vexed parent that the dissent cites does not, and cannot, directly establish that the administrators thought as the parent thought. It establishes only that the administrators were informed as to the parent's thoughts. Indeed, that very letter reports that the administrators disagreed with its author and believed the other teacher had ceased his misconduct.
22
The second form of proof — proving by inference from the fact that the other teacher's misconduct had continued beyond reprimand that the administrators knew such to be the case — is not met here either. The only evidence King proffers on this score is the same letter as discussed above. King argues, in essence, that the letter proves two different facts: (1) that the teacher did in fact continue his misconduct beyond reprimand; and (2) that the administrators were given knowledge of this fact. It should be readily apparent that until evidence that can establish the fact of continuing misconduct is proffered, the letter cannot establish the second fact. For if there is no proof that the misconduct continued, the letter cannot establish that the administrators were given knowledge that it continued since the foundation of any such knowledge is the actual fact that the misconduct continued.
23
The letter, however, cannot establish that the misconduct in fact continued. As an initial matter, the letter-writer concedes he is a parent of a child who had not been inappropriately touched by the teacher following his reprimand. See J.A. at 333-34. Consequently, the aspect of the letter to which King, and the dissent, cling is the hearsay assertion by that parent that another parent's child had been inappropriately touched after the teacher's reprimand. The letter writer claimed to have "learned" of that alleged instance (and most importantly of the time it occurred) via a hearsay report from his son. He did not learn of the incident (and again, most importantly, of the time it occurred) from either the allegedly inappropriately touched child or from the parent of that child. Indeed, the letter-writer notes that in another hearsay conversation with the parent of the allegedly touched child, while the parent of that child confirmed his child had been "poked," he could not confirm that such had occurred after the teacher had been reprimanded. See J.A. at 333. Furthermore, and of greatest import, King proffered no evidence either from the student who was allegedly poked after the teacher's reprimand, or from that student's parent. And, we note as well, neither that student nor his parents filed a complaint with the school alleging that the student was inappropriately touched following Moore's reprimand. There is thus no reliable, proffered basis on which to conclude that the teacher's misconduct continued past reprimand.
24
Since the letter cannot establish the fact of continuing misconduct, and since no other evidence was presented to establish this fact, the letter cannot establish that it gave the administrators knowledge of such a fact. With no valid evidentiary basis on which to infer that the administrators knew, despite their denial, that the other teacher's misconduct continued, King cannot establish inferentially that he was similarly situated to that other teacher.
25
Likewise, the dissent places too much weight on the testimony by Donna Fontenot (a substitute teacher at the school) that Carlson asked her to be "critical" of, or make "derogatory comments" about, King's lesson plans in her post-substituting evaluation forms. See J.A. at 381. As an initial matter, that an employer asks, or even coerces, a subordinate to evaluate another's work critically is not sufficient on its own to establish evidence of pretext. Employers are entitled to demand that subordinates provide critical reviews of their employees when such are justified by sub-par work. And, even if Carlson's demand of Fontenot is the least bit probative that he harbored an unlawful motive for firing King and so desired that she provide a pretext under which he could fire him, the fact is that Carlson did not fire King. Whitaker fired King after conducting his own independent investigation of the matter, and after Carlson had left the school. No evidence links to Whitaker the motive King uses Fontenot's testimony to ascribe to Carlson. Since Carlson did not fire King, and since any motive Carlson had for pressuring Fontenot is not attributable to Whitaker, Fontenot's testimony could only be relevant if the record contained evidence that Fontenot provided reviews of King's work that falsely attributed sub-par performance to him and that King was fired at least partially on that basis. But, the record contains no suggestion at all that the reviews Fontenot provided were in any way inaccurate reviews of King's work.
26
The dissent also points to King's co-worker testimony as evidence that King was treated differently than similarly situated colleagues. But again, for similar reasons as governed our discussion in section II.A., cf. infra pp. 148-151, the opinion of King's colleagues that his work was equivalent to theirs is probative only of the fact that those co-workers believed their work was equivalent to his. It is not probative of whether King's work actually was equivalent to theirs, and thus of whether King actually was similarly situated to them. For King to prove that he was similarly situated to his colleagues in terms of his job performance would, in the absence of evidence to that effect from the employer or its job performance reviews, require an expert to form an opinion based on reasoned analysis as to how King and the other teachers were performing and as to how their performances measured against one another. Such is not the stuff of lay, fact testimony. Compare Fed. R.Evid. 701 (opinion testimony by lay witnesses allowed only where that opinion is "rationally based on the perception of the witness," and not where the opinion is based on "specialized knowledge"), with Fed.R.Evid. 702 (Testimony by Experts). Thus, just as it would take an expert witness to provide an opinion as to whether any given teacher had met legitimate job performance expectations, as the dissent agrees, see post at 154, 157, so too it would take an expert to provide an opinion as to whether any given teacher's work was equivalent to that of another teacher's.
27
Though the dissent would rely upon Conkwright v. Westinghouse Electric Corp., 933 F.2d 231 (4th Cir.1991), to reach the contrary conclusion, that case does not support the dissent. In Conkwright, we considered the employment discrimination claims of a worker who was laid off after his employer enacted firm-wide cutbacks by first rating all its employees, and then discharging those on the bottom of the ratings list. Conkwright's co-workers testified that they thought he did a good job, that he did not deserve his ratings, and that he did not deserve to get laid off. We concluded that this co-worker testimony was close to irrelevant, but in dicta in a footnote observed that: It is only close to irrelevant because if the ratings were wildly out of line with other indicia of an employee's performance then one may question whether the rating system has a bias in its implementation. But that is not the case here.
28
Id. at 235 n. 4.
29
As is readily apparent from the language of that footnote, we were there concerned with the relevance of "indicia of an employee's performance" in an inquiry as to pretext. We did not there address the reliability of co-worker testimony as a means of proving that an employee's work performance was either adequate or that it was equivalent to that of other workers.
30
Here, we accept that indicia of King's performance might be relevant to the pretext inquiry. But, as explained above, King has not proffered any reliable and admissible testimony as to such indicia, and King cannot qualify the testimony of his co-workers as a reliable assessment of the relative competence of him and his co-workers. The dissent's effort to backdoor the co-worker testimony into the case under Conkwright thus fails and King may not ground his proof of pretext on such testimony.
31
For all the reasons given above, none of the evidence King proffers is sufficiently demonstrative of retaliatory intent to establish that the unrebutted poor performance discharge motive is pretext. As a result, King's proffer is insufficient for his action to survive appellee's motion for summary judgment. And while the district court improperly found King not to have made out a prima facie case, it properly granted summary judgment for appellee.
CONCLUSION
32
For the reasons stated herein, the judgment of the district court is affirmed.
33
AFFIRMED.
Notes:
1
For example, in one particular instance, King left identical worksheets for three different classes at different grade levels when he had to be absent. Carlson concluded that the uniform worksheet for such disparate classes reflected inadequate preparation on King's part
2
The record, however, also discloses that this teacher, who had been asked not to tickle the students after two reported incidents of such, corrected his behavior following reprimand, unlike King
3
That King's co-workers thought his work substantially similar to their own is simply not the smoking gun King believes. By way of example, the co-worker's testimony, taken as fully accurate, might simply reflect that their job performance too was lacking
4
King's argument is really no more than an argument for the admissibility of expert opinion testimony from unqualified, non-expert witnesses. For, King's conclusion — that the fact that his co-workers thought he met appellee's expectations is probative of whether he did meet those expectations — necessarily relies on the implicit assumption that the co-workers' have reliable and admissible (i.e., expert) opinions as to what expectations appellee could legitimately maintain and as to whether analysis of King's work shows satisfactory performance under those expectations.
5
King's firing came two months and two weeks following Carlson's receipt of notice that King had filed an EEO complaint with DOD's Office of Complaint Investigations. This length of time between Carlson's notice of the complaint and the adverse employment action is sufficiently long so as to weaken significantly the inference of causation between the two events. Yet, in the context of this particular employment situation, this length of time does not undercut the inference of causation enough to render King's prima facie claim unsuccessful. Here, Carlson and Whitaker committed to ongoing reviews of King's performance that set the end of the academic school year as the natural decision point, thus making likely that any discharge, lawful or unlawful, would come at that time
34
GREGORY, Circuit Judge, concurring in part and dissenting in part:
35
I join the majority's opinion with respect to King's failure to establish a prima facie case of discriminatory discharge. As the majority finds, King has not adduced sufficient evidence of satisfactory performance vis-a-vis his employer's legitimate expectations to survive summary judgment. Additionally, I concur in the majority's reversal of the district court's conclusion that King failed to make out a prima facie case of retaliatory discharge. However, for the reasons that follow, I dissent from the majority's conclusion that King's allegations of discriminatory treatment are insufficient to create a genuine issue of material fact with respect to pretext.
36
The majority identifies King's allegations regarding differential and discriminatory treatment at the hands of his employer. The majority then posits that this treatment, even if assumed to be true, fails to contradict the Secretary's proffered discharge motive. To survive summary judgment, however, King need not squarely rebut his employer's explanation. Instead, King must cast sufficient doubt upon the genuineness of the explanation to warrant a jury's consideration of possible alternative and discriminatory motivations for the firing. As a basic proposition, it is not terribly difficult to imagine a workplace where, confronted with a group of underperforming employees, an employer who is improperly motivated by discriminatory and retaliatory animus, singles out the minority employee for firing after he files a complaint. Because he has made out a prima facie case, if King also has cast doubt upon the real motivations behind his unique treatment, he has adduced sufficient evidence to survive summary judgment.
37
In Hawkins v. PepsiCo, Inc., 203 F.3d 274, 280 (4th Cir.2000), a panel of this Court addressed the exact nature of the evidence necessary to establish pretext. Writing for the Court, Judge Wilkinson noted, "[I]nstead of producing evidence that shows [][the employer's] assessment of [][the employee's] performance was dishonest or not the real reason for her termination — as the law requires — [][the employee] disputes the merits of [][the] evaluations." Id. (emphasis added). In Hawkins, the employee simply took issue with the employer's assessment of her performance deficiencies. The Court required that the employee actually offer some evidence suggesting that an alternative reason existed for the termination. In Hawkins, beyond the employee's self-serving and conclusory allegations of racism, there was no such evidence. Hence, in reviewing for pretext at the summary judgment stage, we should assess whether the plaintiff has adduced evidence sufficient to create a genuine doubt in the mind of a reasonable jury regarding the veracity of the proffered justification. Our analysis must be limited to whether the evidence is competent and sufficient to create a genuine issue of material fact for the jury to resolve — as opposed to whether the evidence will overcome cross-examination and the rigors of trial to carry a jury. King maintains that he was treated differently than his similarly situated co-employees. To support this proposition, he offers several factual illustrations, which I find genuinely troubling and deserving of a jury's consideration.
38
In an age in which schools are acutely aware of the dire consequences that may follow from allegations of inappropriate touching of students by teachers, one would expect school administrators to respond rapidly and decisively to any such allegation. Yet, it is precisely in this highly charged context that we observe a case of laissezfaire and differential treatment by the school. Specifically, I am disturbed by the differential treatment of King's white co-worker, Richard Moore, who violated the school's policies by inappropriately poking and tickling students, yet was not terminated, nor even formally written-up for the incident.
39
The Secretary claims that Moore stopped his objectionable conduct once warned, yet King proffers evidence that undermines this defense. To wit, King offers the testimony of Robert Inaba, whose son Keith had been inappropriately touched by Moore throughout the year. See J.A. at 333-334. Inaba brought this conduct, along with other complaints regarding Moore, to the attention of Whitaker during a June 2, 1997 meeting. Id. Whitaker acknowledged that another parent had notified him of similar misconduct, and indicated that he had already counseled Moore regarding the inappropriate touching. During the same meeting, once Moore had left the room, Whitaker assured Inaba that, "[Moore] should not have touched any students within the last seven days." Id. When Inaba returned home and related Whitaker's assurance that the inappropriate touching would stop, his son informed him that Moore had touched another student, Damon Dukes, earlier that very day. On the morning of June 3, 1997, Inaba telephoned Whitaker and related his son's report of the ongoing touching, which clearly undermined his assurances. Id. Whitaker stated that he would investigate the matter. After follow-up conversations with Whitaker on June 4 and June 6, Inaba reported that Whitaker's investigation of the matter was limited to asking a third-party whether he too had observed the June 2 touching. Id. Whitaker did not ask the alleged victim of Moore's conduct about the incident. Finally, frustrated with Whitaker's apparent unwillingness to take his concern seriously, Inaba contacted Damon Dukes' father on June 9. During this conversation, Mr. Dukes confirmed that the touching had occurred sometime during the previous week, although he could not specify precisely when it occurred. Id.
40
The majority argues that to prove that King and Moore were similarly situated for purposes of discipline, King would have to show that Moore's misconduct continued beyond reprimand, which would permit the inference that the administration did in fact know of the continuing misconduct. Supra at 152. The majority turns to the Inaba incident discussed above and concludes that it does not demonstrate that the misconduct continued beyond the reprimand. Id. at 152. However, this conclusion simply does not follow from the relevant facts. The majority notes that Inaba learned of the incident on June 2 through his son, rather than from Damon Dukes or his father. The majority then acknowledges that Inaba spoke to Mr. Dukes, and confirmed that Damon had been touched. The majority places great emphasis upon its observation that Mr. Dukes did not indicate that the touching had "occurred after the teacher had been reprimanded." Id. Finally, the majority notes that neither the victim nor his parent filed a complaint alleging the touching. Hence, according to the majority, there is no basis upon which the inference of knowledge of continued touching may rest.
41
Indeed, Inaba's letter reports no express confirmation by Mr. Dukes that his son had been touched after the reprimand. However, Inaba's letter does not report that he requested such a confirmation. Indeed, Inaba relates that Mr. Dukes indicated that his son had been touched sometime during the previous week. See J.A. at 333. This conversation occurred on June 9, 1997. Hence, we can assume that the touching occurred sometime on or after June 2, 1997. However, on June 2, 1997, Whitaker had assured Inaba that he had already spoken to Moore regarding the touching, and that he should not have touched any student within the last seven days. It is hardly a great leap to infer from this that Whitaker was on notice regarding the reported touching by Moore during late May 1997. Therefore, Inaba's June 3, 1997 report to Whitaker regarding an incident alleged to have occurred on June 2, 1997, establishes that Whitaker was aware of reports of ongoing misconduct by Moore — post-reprimand.
42
This fact establishes a solid basis for the permissible inference, to adopt the majority's logical approach, that the administrators knew that Moore's misconduct continued beyond reprimand, yet failed to discipline him as they would ultimately discipline King. Hence, King has established a genuine issue of material fact warranting a jury's consideration of differential treatment. The majority validly observes that Inaba's testimony is indirect, that neither Damon Dukes nor his father filed a complaint, and we might well expect the Secretary to present just such a challenge to King's evidence at trial. However, we must limit our inquiry at present to whether King may survive summary judgment, not prognosticate whether his evidence will ultimately sway a jury. King's evidence of the differential treatment vis-a-vis his white colleague alone constitutes sufficient evidence of pretext to deny summary judgment.
43
However, King offers significant proof beyond the Moore incident from which we may infer that he was treated differently by his employer. For instance, King offers the testimony of Donna Fontenot, a substitute teacher at the school, who testified that she was coerced by Carlson to prepare reviews denigrating the quality of King's lesson plans. See J.A. at 381-83. Fontenot testified that she felt pressured, at the risk of losing future teaching assignments, to produce a negative evaluation of King's work. Id. The majority dismisses this testimony because it was Whitaker, rather than Carlson, who made the ultimate decision to discharge King. Thus, according to the majority, any unlawful motive that legitimately could be inferred from Carlson's coercive campaign to "paper" the record with negative reviews, cannot serve as a basis for pretext unless King proffers evidence that Fonteno's reviews were false and that he was fired, at least in part, on that basis. Supra at 153.
44
The majority seems to assume that Fontenot's reviews should be read independently of the circumstances under which they were produced. By insisting that King demonstrate that Fontenot's reviews "falsely attributed subpar performance to him," supra at 153, the majority returns again to its insistence that King demonstrate the merits of his performance. However, as noted above, King need not squarely rebut his employer's performance-based explanation. Instead, he must introduce evidence casting doubt upon the proffered explanation. It is to this end that Fontenot's testimony should be directed. That a teacher was coerced to denigrate the work of her colleague, contrary to her true impressions and beliefs, must at least raise genuine issues concerning the credibility of Carlson's putative meritocractic zeal. Although Carlson did not make the ultimate decision to fire King, these coerced reviews were part of King's teaching record. Of course, as the majority emphasizes, Whitaker asserts that he discharged King after conducting his own independent investigation of the case. However, a jury need not blindly accept this version of events, and may rightfully infer that Whitaker's decision may have been tainted by Carlson's misconduct — evidence of which abounds. The Fontenot testimony reveals differential treatment, whereupon a jury may legitimately discount the reviews as a pretext for the employer's true unlawful motive.
45
Finally, the majority dismisses King's proffer of co-worker testimony regarding the similarity of his work to their own. According to the Court, King may only establish the equivalence of his work by introducing expert testimony to this effect. Supra at 153. I agree with the majority that King would require expert testimony to establish that his work met the legitimate expectations of his supervisor; however, it hardly follows a fortiori that he must adduce expert testimony to demonstrate the similarity of his work product to that of his co-workers.
46
As we have recognized, "[A] lay witness in a federal court proceeding is permitted under Fed.R.Evid. 701 to offer an opinion on the basis of relevant historical or narrative facts that the witness has perceived." MCI Telecommunications Corp. v. Wanzer, 897 F.2d 703, 706 (4th Cir.1990)(quoting Teen-Ed, Inc. v. Kimball International, Inc., 620 F.2d 399, 403 (3d Cir.1980)). Although lay opinion testimony was once disfavored and presumed excludable, "The modern trend favors the admission of opinion testimony, provided that it is well-founded on personal knowledge [as distinguished from hypothetical facts] and susceptible to specific cross-examination." Id. (alteration in original) (quoting 3 J. Weinstein, Evidence ¶ 701[02] at 701-9 and 701-17 (1978)). However, the testimony of such a witness is limited to those opinions or inferences which are: 1) rationally based upon the perception of the witness; 2) helpful to a clear understanding of the testimony or the determination of a fact in issue; and 3) not based upon knowledge within the scope of Rule 702. Fed.R.Evid. 701. Additionally, we must be on guard to prevent lay opinion testimony when it involves "meaningless assertions which amount to little more than choosing up sides." Mattison v. Dallas Carrier Corp., 947 F.2d 95, 110-11 (4th Cir.1991) (quoting Fed.R.Evid. 701, Advisory Committee Note).
47
Although the contours of Rule 701 might upon first inspection appear straight-forward, considerable subtlety is often required to avoid the mischaracterization of competent lay opinion. See, e.g., MCI Telecommunications, 897 F.2d at 706 (citing district court's error in treating proper lay opinion as expert testimony where witness offered profit projections based upon her personal knowledge of company's books); Winant v. Bostic, 5 F.3d 767, 772 (4th Cir.1993) (noting that sometimes the characterization of testimony as opinion evidence may be misleading when the focus should be upon rational inferences drawn from facts of which the witness has personal knowledge). Accordingly, courts have admitted lay opinion testimony under Rule 701 that goes well beyond the classic confines of physical perception, and which requires the exercise of judgment solidly grounded in personal knowledge. See, e.g., United States v. Fowler, 932 F.2d 306, 312 (4th Cir.1991) (admitting lay opinion that defendant knew rules about treatment of classified documents, upon foundation that witnesses were familiar with the documents, their classification and reasons therefor, and the nature of the defendant's work); MCI Tele-communications, 897 F.2d at 706 (profit projections based upon personal knowledge of company's finances admissible under Rule 701); Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153 (3d Cir.1993) (upholding admission of lay opinion from plaintiff's owner as to damages, which was based upon personal knowledge and participation in affairs of business, even if witness relied in part upon report prepared by outside accountant in preparing opinion); United States v. Westbrook, 896 F.2d 330, 335-336 (8th Cir.1990) (permitting ex-users to testify as to the identity of a controlled substance based upon their past experience with same). What we may derive from these cases is that the opinion testimony is not admitted due to the "specialized knowledge," which should be reserved for experts under Rule 702, but because of the particularized knowledge of a witness by virtue of his personal experience in a field (legal or not).
48
The majority's treatment of the distinction between lay and expert opinion does not do justice to the subtleties of the problem. The majority oversimplifies this evidentiary issue when it asserts that King would require an expert witness to "form an opinion based on reasoned analysis as to how King and the other teachers were performing and as to how their performances measured against one another." Supra at 153. King has adduced substantial evidence from his fellow teachers to the effect that their lesson plans were similar. Each of these teachers and substitute teachers had ample personal knowledge of the subject matter. To allow one teacher to introduce the opinion that his or her colleague's lesson plan "looks similar," as so many of King's co-workers have testified, would hardly hazard setting Rule 701 adrift from its prudential moorings. If a business owner or bookkeeper, testifying as a lay opinant, may offer such seemingly "specialized" insights as profit projections and damage reports, surely an elementary school teacher can compare two lesson plans, of which he or she has personal knowledge, without qualifying as an expert. Likewise, if an amphetamine aficionado may offer lay opinion comparing powdery substances of unknown provenance, I do not see why a teacher must be treated as an expert to compare the appearance of similar lesson plans. Ultimately, King's proffer of comparative testimony goes not to the merits of the subject work-product, nor to the legitimate expectations of an elementary school supervisor, but simply seeks to establish the similarity of two items of evidence, both of which are personally familiar to the proposed opinant. Therefore, our analysis of pretext should proceed upon the premise that King has demonstrated a genuine factual question as to whether his work-product is comparable to that of his colleagues. The ultimate determination of equivalence, of course, should be reserved for the jury.
49
Finally, I would take this opportunity to comment upon this Circuit's precedent, which has been cited by the majority to emphasize our traditional reluctance to employ the testimony of co-workers to establish performance merit in unlawful discharge cases. Supra at 149. Indeed, as the majority correctly explained, an employee may not introduce the testimony of his co-workers to establish his satisfaction of his supervisor's legitimate performance expectations. See Hawkins, 203 F.3d at 280; Tinsley, 155 F.3d at 444. I joined the majority's opinion regarding King's discriminatory discharge claims precisely in light of such precedent. However, we are now forced to resolve a separate question altogether: does King's evidence of comparable work product demonstrate differential treatment by his employers?
50
The opinion testimony of King's peers establishes a genuine question of fact regarding the equivalence of his work product to that of his peers. This evidence does not establish that his work was meritorious, nor could it under our precedent. We have had occasion, in noting the narrow relevance of co-worker testimony regarding the quality of a plaintiff's work product, to allow for the admission of such opinion in order to demonstrate the possibility of implementation bias in an otherwise objectively designed review scheme. See Conkwright v. Westinghouse Electric Corp., 933 F.2d 231, 235 n. 4 (4th Cir. 1991). In Conkwright, we acknowledged that an "objective" employee rating system, might be manipulated to generate a neutral looking basis for discharge. In such a scenario, where co-workers testified that the employee did not deserve the ratings he received, we observed that their testimony could be relevant to an argument of pretext. The majority concedes that such "indicia of King's performance might be relevant to the pretext inquiry," supra at 154, but goes on to conclude that King failed to proffer admissible testimony as to such indicia. Obviously, in light of my discussion of Rule 701, I disagree with this assessment. King's co-workers' testimony is an indicator of the equivalence of his performance, and lays the foundation for the inference that by being singled out for discharge, he was treated differently on the basis of race, rather than performance.
51
Ultimately, we must recall that we are asked to assess whether King has raised a genuine issue of material fact on the question of pretext. On my review of the evidence, I cannot escape the conclusion that he has done so. I therefore respectfully dissent from the part of the majority's opinion affirming the district court's summary judgment on King's retaliatory discharge claim. | 01-03-2023 | 04-18-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/426175/ | 719 F.2d 667
33 Fair Empl.Prac.Cas. 13, 76 A.L.R.Fed. 341,32 Empl. Prac. Dec. P 33,859
James J. SULLIVANv.CROWN PAPER BOARD CO., INC., Appellant.
No. 83-1062.
United States Court of Appeals,Third Circuit.
Argued July 18, 1983.Decided Oct. 14, 1983.As Amended Oct. 20, 1983.
Alan M. Lerner (argued), Judah I. Labovitz, Cohen, Shapiro, Polisher, Shiekman & Cohen, Philadelphia, Pa., for appellant.
Walter M. Phillips, Jr. (argued), Nancy O'Mara Ezold, Phillips & Phelan, Philadelphia, Pa., for appellee.
Before ADAMS and HIGGINBOTHAM, Circuit Judges, and TEITELBAUM, District Judge*
OPINION OF THE COURT
ADAMS, Circuit Judge.
1
This appeal arises out of a successful claim brought under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Sec. 621 et seq. (1976). Following a jury verdict in favor of appellee James Sullivan, the district court awarded $116,000 in compensatory and liquidated damages and ordered that Sullivan be reinstated. The district court further awarded plaintiff's counsel $41,287 in attorney's fees under the procedure set forth in Lindy Bros. Builders, Inc. v. American Radiator and Standard Sanitary Corp., 487 F.2d 161 (3d Cir.1973). The issue before us is whether the district court erred in not considering a private contingency fee arrangement in fashioning the statutory fee award. Because this is an inappropriate case for a dual fee recovery, we vacate the district court's award and remand for reevaluation of a fee consistent with this opinion.
I.
2
The contingent nature of an attorney's fee recovery is a valid factor in the determination of court awarded fees. The legislative history of the Civil Rights Attorney's Fee Awards Act of 1976 specifically endorses the standard devised in Johnson v. Georgia Highway Express, 488 F.2d 714 (5th Cir.1974).1 S.Rep. No. 1011, 94th Cong., 2d Sess. 6 (1976), reprinted in 1976 U.S.Code Cong. & Ad.News 5908, 5913. Johnson focuses on whether the fee is fixed or contingent as one relevant factor, but contains the admonition that "[s]uch arrangements should not determine the court's decision." 488 F.2d at 718, quoting Clark v. American Marine Corp., 320 F.Supp. 709, 711 (E.D.La.1970), aff'd, 437 F.2d 959 (5th Cir.1971). Johnson immediately qualifies this statement:
3
In no event, however, should the litigant be awarded a fee greater than he is contractually bound to pay...."
4
488 F.2d at 718. This qualifying statement can be read as either fixing the maximum attorney's fee award at the contractual ceiling or cautioning against a plaintiff windfall by releasing more funds into his/her hands than he/she is required to pay. Nothing in the legislative history or the case law supports the former interpretation.2 In fact, limitation of fee awards to a contingency agreement would vitiate Congressional intent to make "fee awards ... an integral part of the remedies necessary to obtain ... compliance [with the appropriate statutes]" and to insure that fees "are adequate to attract competent counsel...." S.Rep. No. 1011, supra at 5, reprinted in 1976 U.S.Code Cong. & Ad.News at 5913. At its clearest, the legislative mandate would therefore have courts consider the existence of a contingency arrangement, while not allowing such consideration to thwart the enforcement of the substantive statutory rights that gave rise to the fee award provision.
II.
5
This Court has yet to determine the procedure by which district courts are to incorporate private fee arrangements into a statutory fee award. As a practical matter, in cases where the statutory fees exceed the private contingent fee arrangements, three distinct orders are possible:
6
(1) Defendant can be ordered to pay only the difference between the statutory award and the contingent fee the plaintiff had agreed to pay. This is an inequitable solution that would give a windfall to the defendant despite the finding of liability. Such a result would also frustrate the legislative policy objective that the fee itself serve as a disincentive to future discriminatory conduct.
7
(2) The statutory fee should be paid to plaintiff's attorney with any lesser contingency fee considered satisfied. This is the accepted formulation in most circuits that have addressed this question:
8
[W]e reiterate that a fee agreement is irrelevant to the issue of entitlement and should not enter into the determination of the amount of a reasonable fee.... The better route would be to order that the award reimburse the plaintiff, with any excess over the amount set by the fee agreement going to her counsel.
9
Sargeant v. Sharp, 579 F.2d 645, 649 (1st Cir.1978). The Second Circuit has similarly ruled that
10
to the extent counsel receives payment of the Section 1988 statutory award, his claim for services rendered under his contingency fee arrangement with his client shall be deemed paid and satisfied.
11
Wheatley v. Ford, 679 F.2d 1037, 1041 (2d Cir.1982). See also Sanchez v. Schwartz, 688 F.2d 503, 505 n. 8 (7th Cir.1982); Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575, 582-84 (5th Cir.1980).
12
(3) Plaintiff's attorney should recover both the statutory fee and the contingency fee. This position, advanced by plaintiff here, finds support in Zarcone v. Perry, 581 F.2d 1039 (2d Cir.1978), cert. denied, 439 U.S. 1072, 99 S.Ct. 843, 59 L.Ed.2d 38 (1979). The Zarcone court reasoned that
13
the prospect of an award supplementing the fee that the successful plaintiff might be able to pay would be essential to attract competent counsel.
14
Id. at 1044. See also Buxton v. Patel, 595 F.2d 1182, 1185 & n. 3 (9th Cir.1979) ("[t]he presence of a contingent fee arrangement is of course neither necessary nor sufficient to justify the denial of attorneys' fees").
15
Without rejecting the possibility of a proper dual fee recovery as a matter of law, we hold that the case at bar does not present an occasion for such an award. Zarcone itself allows for dual recovery only
16
when the claim involves civil rights of broad significance, prosecuted on behalf of a large class, and the prospective monetary award, if the suit is successful, would be modest in relation to the time, effort and skill required of counsel ....
17
581 F.2d at 1044. Since the present case involves a single plaintiff rather than a class, has limited significance beyond the immediate parties, and presents legal issues that are not novel or complicated, a dual fee recovery would appear to be inappropriate even under the Zarcone standard.3
III.
18
The record fails to indicate the precise terms of the plaintiff's contingency fee arrangement with counsel. On remand, the trial court should ascertain this amount and allow a recovery of the contingency fee amount or the statutory fee, whichever is greater. If the statutory fee is greater, plaintiff shall be entitled to his full damages award and his obligation to counsel shall be deemed settled in full. Should the contingency fee be greater, plaintiff should be directed to pay to counsel only the difference between the statutory award and the contingent fee.
19
The judgment of the district court will be vacated and the case remanded for action consistent with this opinion.
*
Hon. Hubert I. Teitelbaum, United States District Court for the Western District of Pennsylvania, sitting by designation
1
The fact that attorney's fees under the ADEA are governed by the Fair Labor Standards Act, 29 U.S.C. Sec. 216(b) (1976), rather than the principal fee award statute, 42 U.S.C. Sec. 1988 (1976), is of no consequence. Section 216(b) provides only that "reasonable" fees may be awarded. It has been the practice of federal courts to treat the various fee-shifting antidiscrimination statutes as governed by the same standards. Spagnuolo v. Whirlpool Corp., 641 F.2d 1109, 1115 (4th Cir.1981) (treating ADEA fee award under Title VII standards); Greene v. Whirlpool Corp., 538 F.Supp. 352, 356 (W.D.N.C.1982) (same). Moreover, the most recent revisions of the Model Rules of Professional Conduct define appropriate fees along the lines of Johnson and Lindy, including the consideration of "whether the fee is fixed or contingent." 52 L.W. 5 (Aug. 16, 1983)
2
Only one decision has held that the terms of a contingency fee set the upper limit of a statutory award. Cooper v. Singer, 689 F.2d 929 (10th Cir.1982), reh'g granted, Jan. 11, 1983. Defendant urges this Court to follow Cooper without any other support for this position. Significantly, contrary case law is available within the 10th Circuit itself. See Fleet Investment Co. v. Rogers, 620 F.2d 792 (10th Cir.1980)
3
Appellee's counsel indirectly challenges this point by claiming that "in those cases where a multiplier is not applied, as was the case here, plaintiff's counsel would be awarded nothing for undertaking the risk...." Appellee's Brief at 13. This claim correctly signals that any rule of law regarding double recoveries must be squared with this Court's endorsement of a multiplier of the lodestar to compensate counsel for the risks taken and the contingent nature of success. Lindy Bros. Builders v. American Radiator & Standard Sanitary (Lindy II), 540 F.2d 102, 117 (3d Cir.1976). As a general matter, the use of the multiplier has striking advantages over dual awards. The multiplier allows the trial court to control the extent to which the risks should be compensated, places the burden for the risk upon the discriminator, allows the victim full recovery and dispels any appearance of an attorney windfall | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1298635/ | 553 S.E.2d 679 (2001)
STATE of North Carolina
v.
Steven Murray GROVER, Sr.
No. 198A01.
Supreme Court of North Carolina.
November 9, 2001.
Roy A. Cooper, Attorney General, by Celia Grasty Lata, Assistant Attorney General, for the State-appellant.
Thomas L. Currin, Oxford, for defendant-appellee.
PER CURIAM.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555117/ | 36 So.3d 542 (2008)
Clifton DABBS, Joan Dabbs, and Shane Dabbs
v.
FOUR TEES, INC., d/b/a United True Value, and Terry Graves.
2070630 and 2070631 and 2070632.
Court of Civil Appeals of Alabama.
November 7, 2008.
Certiorari Denied (as to Graves) November 13, 2009 Alabama Supreme Court 1080240.
Certiorari Denied (as to appellant) November 13, 2009. Alabama Supreme Court 1080243.
*545 Lindsey Mussleman Davis of Holt, Mussleman, Kelley & Morgan, Florence, for appellants.
Rodney B. Slusher, Florence, for appellee Terry Graves.
MOORE, Judge.
Clifton Dabbs, his wife, Joan Dabbs, and their son, Shane Dabbs (sometimes hereinafter referred to collectively as "the Dabbses") contracted with Terry Graves to construct a building on their property for use as a costume store. The parties later experienced disagreements regarding the construction of the building, which resulted in the filing of a number of claims by the Dabbses, Graves, and certain other third parties. The Dabbses appeal from the Lauderdale Circuit Court's judgment denying the Dabbses their requested relief.[1]
Facts
The Dabbses owned a building in Lauderdale County in which they operated a costume store. In 2004, the Dabbses decided that they wanted to expand their business. Shane had plans drawn up for the project; his design for the building resembled a castle and included a store and an upper-level apartment. A friend of the Dabbses recommended Graves for the project, and Joan met with Graves to discuss *546 the plans therefor. According to Joan, Graves's estimate to complete the project according to the plans was too costly and they agreed not to build the apartment.
There was no written contract between Graves and the Dabbses for the construction of the building. It is undisputed that only Graves and Joan were present for the discussion of the terms of their agreement. Joan testified that Graves had told her that he was licensed and bonded as a contractor; however, he did not show her a license and he did not inform her that his license was limited to the City of Florence. Graves stated that he had told Joan that he was licensed only with the city. According to Graves, he had never possessed a county or state contracting license. The Dabbses' project was not located within the City of Florence.
Graves was to remove the roof from the existing building on the property and expand the building to include a second floor. Graves testified that he was responsible only for constructing the outside of the building and was not responsible for any construction on the inside. Joan testified, however, that Graves was responsible for certain elements to be constructed on the inside of the building, including doors, stairs, and posts. Graves testified that they had agreed that Graves was to be paid $12 per square foot to complete the project. Joan stated that she had not agreed to pay Graves $12 per square foot but that, instead, Graves had told her that they would save a lot of money if they paid him by the hour; Joan testified that she and Graves had never agreed on an hourly rate. Both Graves and Joan testified that the Dabbses had agreed to pay for the materials for the project.
On May 19, 2004, Joan wrote a check to Graves in the amount of $1,550. According to Joan, that amount was for Graves to get started on the project and was to be applied to Graves's labor costs. Graves testified that that money was payment for him to tear down the preexisting building on the site.[2] Also on May 19, 2004, Joan wrote a check to United True Value ("United"), a materials supplier, in the amount of $15,000 for materials for the project.[3] According to Joan, she had given that check to Graves for the purpose of starting an account in her name at United, and she had assumed that Graves had set up an account in her name. Graves testified that he had had an account with United long before he began the Dabbses' project and that he had had a small balance on that account before he began the Dabbses' project. According to Graves, all the materials from United that were for the Dabbses' project were billed to Graves under his account number and he did not open a separate account for the Dabbses' project. Graves stated that he had asked Joan for the $15,000 check for United so that he could order materials to get started on the project and that he had delivered that check to United for the Dabbses. Jim Terry, purportedly an owner of United, testified that he had first received an order for the Dabbses' project around May 20, *547 2004. At that time, according to Terry, Graves's account with United had a balance owing of $16,184.21, which was unrelated to the Dabbses' project, and the $15,000 check from the Dabbses had been applied to that balance.
Graves began working on the Dabbses' project in the first week of June 2004. Joan wrote a check for $1,733.10 to Blue Star Ready Mix USA, L.L.C., for concrete on June 4, 2004; Joan testified that Graves had begun the project approximately one day before that.[4] Graves hired Tommy Whitten, a carpenter, to work with him on the project. According to Whitten, he, Graves, and another worker, Scott, had worked on the Dabbses' project. Graves testified that his nephew and his daughter had worked on the project on and off, and there was testimony indicating that there was another employee who had worked on the project periodically. Graves testified that he had paid each of his workers in cash and that he had expended approximately $12,000 to $14,000 in paying his workers.
United delivered the majority of the materials for the project directly to the job site. Graves testified that he recalled having a discussion with Joan in which he had told her that her balance with United was $26,605.23, that she needed to pay that sum so that he could order more lumber from United, and that, on June 23, 2004, she had given him a check, made out to United, in the amount of $26,605.23, which he had then delivered to United. Joan testified that she thought that, at that time, all the materials for the project had been paid for. Also on June 23, 2004, Joan wrote a check to Graves in the amount of $8,000. According to Joan, Graves had told her that he needed that amount for his labor and to pay his workers; Graves stated that he had not asked Joan for any more money for his labor since that time.
At some point before Graves stopped working on the Dabbses' project, Whitten quit working for Graves. According to Whitten, he had learned that the Dabbses, rather than Graves, were paying for the materials; he had seen Graves removing materials that had been delivered to the Dabbses' site, and he did not want to be a part of anything illegal. Specifically, Whitten testified that he had seen Graves remove "Hardie" plank, or concrete board, plywood, and chip board from the Dabbses' site. Joan and Shane testified that, on one occasion, 50 pieces of Hardie plank that had been delivered in the morning were no longer at the site later that evening. Whitten stated that he knew of two other jobs from which Graves was taking materials. Graves testified, however, that he had not removed any materials from the Dabbses' site and that the other jobs that he was working on at that time required different materials than he was using on the Dabbses' project.
According to Joan, she and Graves had had an argument sometime in July during which she had expressed her concerns that Graves was not going to complete the project by the July 31 deadline that they had discussed. Graves left the job at the end of July. Joan testified that Graves had not completed the project at that time. According to Joan, Graves returned to the project two or three different times in August, but he did not perform any work on those occasions. Joan stated that, shortly after she and Graves had argued, Graves simply did not show up again to complete the project. Graves testified that, when he left the project at the end of *548 July, he had done everything he was supposed to do pursuant to his contract with the Dabbses.
On September 1, the Dabbses hired Whitten and his wife, Barbara Phares, to complete the project because, according to Joan, when Graves left the project, there were several things that needed to be completed or replaced in the building. The Dabbses paid Whitten and Phares $700 per week, and they finished the job around the second week of January 2005. Joan testified that Whitten and Phares had not done any work on the project that she had not contracted with Graves to do. Whitten and Phares testified that several things had to be finished or redone, including headers on the windows, the gutter system, bracing for the rafters, and framing and columns on the inside of the building.
Joan and Shane testified that they moved into the store in the second week of January 2005 and that they reopened the store on February 1, 2005. Whitten, Phares, Joan, and Shane each testified that there were still problems that needed to be repaired at the time of the trial. Jerry Tapscott II, a licensed contractor with the State of Alabama, visited the store at Shane's request after it reopened in February 2005; Tapscott identified several concerns with the construction of the store. Tapscott testified that, among other problems, some of the wood on the outside of the building was not properly treated, some of the trim was coming loose from the building, the second floor was not properly supported, and the Hardie plank had been improperly installed. Tapscott estimated that it would cost approximately $36,602.05 to fix the problems that existed with the construction of the store, although he admitted that that estimate was a guess because he could not accurately determine the cost of the project until he "tore into" it.
Procedural History
On September 24, 2004, in case number CV-04-475, Graves filed a complaint in Lauderdale Circuit Court against the Dabbses, alleging that the Dabbses owed him $48,484 plus interest for labor and services rendered pursuant to a contract for the construction of a commercial building and apartment; he also claimed a lien on the Dabbses' property at that time and asserted a claim for quantum meruit. Graves named American General Financial Services, Inc. ("American General"), to whom the Dabbses' property was mortgaged, as a defendant in his complaint. The Dabbses filed an answer on October 28, 2004, and, on December 29, 2004, the Dabbses filed a counterclaim against Graves, alleging that Graves had breached the contract to remodel their building, that Graves had misrepresented to the Dabbses that he was a licensed builder, that Graves had converted to his own use certain items that had been purchased by the Dabbses for the work to be done to their building, and that Graves had slandered the title to their property by wrongfully filing a lien against their property. American General also counterclaimed against Graves, asserting that Graves had wrongfully converted American General's interest in the property and seeking an amount of the diminution in the value of its interest in the Dabbses' property and any other relief to which it was entitled. Graves filed an answer to the Dabbses' counterclaim on January 5, 2005.
On January 19, 2005, United filed a lien against the Dabbses' property, asserting that the Dabbses owed it $24,234.82 for materials that had been delivered to the Dabbses' site for which United had not been paid. On January 31, 2005, the Dabbses filed an amended answer in which they asserted that the contract upon which *549 Graves sought recovery was void and unenforceable pursuant to Ala.Code 1975, § 34-8-1 et seq., and that Graves's claims were barred as a result of Graves's failure to comply with § 34-8-1 et seq.
On March 2, 2005, the Dabbses filed a motion to add Teresa Terry d/b/a United True Value[5] as a party because some, if not all, of the materials used by Graves in the construction of the store had been purchased at United, which, they asserted, is owned by Teresa Terry. On that same day, the Dabbses also filed a cross-claim against Teresa Terry d/b/a United True Value, alleging that Teresa Terry had slandered the title to their property by filing a wrongful materialman's lien against the same. The trial court entered an order adding Teresa Terry d/b/a United True Value as a party defendant on March 4, 2005.
On May 31, 2005, in case number CV-05-302, Four Tees, Inc., d/b/a United True Value[6] filed a complaint against Clifton Dabbs and Joan Dabbs, requesting a judgment against them in the amount of $24,234.82 for materials that they had received from United for which United had not been paid. That same day, in case number CV-05-303, United True Value filed a complaint against Graves, demanding a judgment in the amount of $24,234.82 with interest in satisfaction of the balance due on Graves's account with United. On June 27, 2005, the Dabbses filed a motion to dismiss the complaint in case number CV-05-302, asserting that the claim asserted in that complaint was in the nature of a compulsory counterclaim because Teresa Terry d/b/a United True Value had been added as a party defendant in the action between Graves and the Dabbses (case number CV-04-475). On September 9, 2005, the trial court entered an order consolidating the three cases involving Graves, the Dabbses, American General, Teresa Terry d/b/a United True Value, Four Tees, Inc., d/b/a United True Value, and United True Value for purposes of discovery and trial.
On September 15, 2005, Graves filed an amendment to his complaint, dismissing his quantum meruit claim against the Dabbses and substituting the amount of $40,000 for the $48,484 stated in the original complaint as the amount owed to him by the Dabbses. That same day, Graves also filed an answer to United True Value's complaint. After the trial was completed, the trial court entered an order on October 16, 2006, in which it found in favor of the Dabbses on the claim asserted by Four Tees, Inc., d/b/a United True Value; found in favor of Teresa Terry d/b/a United True Value on the Dabbses' counterclaim against Teresa Terry d/b/a United True Value alleging slander of title; found in favor of United True Value on its claim against Graves and awarded it $42,293.16 in damages; and found in favor of Graves against the Dabbses on Graves's breach-of-contract claim and awarded him $30,000 in damages. On October 25, 2006, the Dabbses filed a motion to alter, amend, or vacate the judgment or, in the alternative, for a new trial. Graves filed a response to that motion on December 19, 2006. On December 27, 2006, the trial court entered an order denying the Dabbses' postjudgment motion. The Dabbses filed a notice of appeal to the Alabama Supreme Court on February 6, 2007; that court transferred the appeal to this court, pursuant to Ala.Code 1975, § 12-2-7.
On November 6, 2007, this court dismissed the Dabbses' appeal as being from a nonfinal judgment because the Dabbses' *550 counterclaim against Graves and the counterclaim filed by American General against Graves had not been adjudicated.[7]See Dabbs v. Four Tees, Inc., 984 So.2d 454 (Ala.Civ.App.2007).
On January 17, 2008, the trial court entered an order denying the Dabbses' counterclaim against Graves and denying American General's counterclaim against Graves. The Dabbses filed a motion to alter, amend, or vacate the trial court's January 17, 2008, judgment or, in the alternative, for a new trial on January 23, 2008; the trial court denied that motion on February 8, 2008. The Dabbses appealed to the Alabama Supreme Court on March 6, 2008; that court subsequently transferred the appeals to this court, pursuant to § 12-2-7. The appeals have been consolidated.
Standard of Review
"`When ore tenus evidence is presented, a presumption of correctness exists as to the trial court's findings on issues of fact; its judgment based on these findings of fact will not be disturbed unless it is clearly erroneous, without supporting evidence, manifestly unjust, or against the great weight of the evidence. J & M Bail Bonding Co. v. Hayes, 748 So.2d 198 (Ala.1999); Gaston v. Ames, 514 So.2d 877 (Ala.1987). When the trial court in a nonjury case enters a judgment without making specific findings of fact, the appellate court "will assume that the trial judge made those findings necessary to support the judgment." Transamerica Commercial Fin. Corp. v. AmSouth Bank, 608 So.2d 375, 378 (Ala.1992). Moreover, "[u]nder the ore tenus rule, the trial court's judgment and all implicit findings necessary to support it carry a presumption of correctness." Transamerica, 608 So.2d at 378. However, when the trial court improperly applies the law to [the] facts, no presumption of correctness exists as to the trial court's judgment. Allstate Ins. Co. v. Skelton, 675 So.2d 377 (Ala. 1996); Marvin's, Inc. v. Robertson, 608 So.2d 391 (Ala.1992); Gaston, 514 So.2d at 878; Smith v. Style Advertising, Inc., 470 So.2d 1194 (Ala.1985); League v. McDonald, 355 So.2d 695 (Ala.1978). "Questions of law are not subject to the ore tenus standard of review." Reed v. Board of Trustees for Alabama State Univ., 778 So.2d 791, 793 n. 2 (Ala.2000). A trial court's conclusions on legal issues carry no presumption of correctness on appeal. Ex parte Cash, 624 So.2d 576, 577 (Ala.1993). This court reviews the application of law to facts de novo. Allstate, 675 So.2d at 379 ("[W]here the facts before the trial court are essentially undisputed and the controversy involves questions of law for the court to consider, the [trial] court's judgment carries no presumption of correctness.").'"
Farmers Ins. Co. v. Price-Williams Assocs., Inc., 873 So.2d 252, 254-55 (Ala.Civ. App.2003) (quoting City of Prattville v. Post, 831 So.2d 622, 627-28 (Ala.Civ.App. 2002)).
Discussion
The Dabbses first argue that the trial court erred in awarding $30,000 to *551 Graves on his breach-of-contract claim because, they say, Ala.Code 1975, § 34-8-1 et seq., precludes Graves from recovering a judgment against the Dabbses. Section 34-8-1(a) provides:
"For the purpose of this chapter, a `general contractor' is defined to be one who, for a fixed price, commission, fee, or wage undertakes to construct or superintend or engage in the construction, alteration, maintenance, repair, rehabilitation, remediation, reclamation, or demolition of any building, highway, sewer, structure, site work, grading, paving or project or any improvement in the State of Alabama where the cost of the undertaking is fifty thousand dollars ($50,000) or more, shall be deemed and held to have engaged in the business of general contracting in the State of Alabama."
"If any person performs work within [the definition of `general contractor' as set out in § 34-8-1(a), Ala.Code 1975,] and fails to obtain a general contractor's license, the contract must be declared null, void, and unenforceable." Herbert v. Birmingham-Jefferson Civic Ctr. Auth., 694 F.2d 240, 241 (11th Cir.1982). Graves testified that he was a licensed contractor with the City of Florence but that he had never had a county or state license. See Ala.Code 1975, § 34-8-2 (indicating that a state license is what is contemplated in § 34-8-1 et seq.). Joan testified that the project site was not located within the City of Florence.
The Dabbses argue that the cost of Graves's labor alone brings Graves within the ambit of § 34-8-1. It was undisputed at trial that the Dabbses had paid Graves $8,000 on June 23, 2004, for labor. The Dabbses maintain that the $1,550 check given to Graves on May 19, 2004, was for labor to get Graves started on their project. Graves, however, testified that the $8,000 payment was the only payment he had received for his labor. Graves testified that he and Joan had agreed that Graves would be paid $12 per square foot, that the project involved 3,816 square feet, and, thus, that his total labor costs were $45,792. After deducting the $8,000 that the Dabbses and Graves agreed had been paid to Graves for labor, Graves requested an additional $37,792 from the Dabbses for labor.
The Dabbses argue further that Graves received the benefit of overpayments made by the Dabbses to the suppliers, including $7,000[8] to Secondary Metals, Inc., and $2,718.14 to United, which, when combined with the amount that Graves claimed for his labor, would exceed $50,000. With regard to the payment to Secondary Metals, evidence was presented indicating that Graves presented a handwritten list to the Dabbses of certain materials purchased from Secondary Metals and the respective costs of those materials; the cost of the materials listed totaled $994.70.[9] An invoice from Secondary Metals dated June 25, 2004, however, was also presented; the June 25, 2004, invoice includes an additional line of items that Graves argues accounted for the remaining $7,000 that was paid to Secondary Metals.[10] Graves testified *552 that the materials listed on that invoice had been used for roofing on the Dabbses' project.
The trial court did not make specific findings of fact in the present case.
"[W]here a trial court's judgment in a nonjury case is based on ore tenus testimony, the court's findings of fact are presumed correct, and the judgment will not be disturbed unless it is clearly erroneous, without supporting evidence, manifestly unjust, or against the great weight of the evidence. McDonald v. Schwartz, 706 So.2d 1230 (Ala.Civ.App. 1997). Further, this court has stated that `[w]hen the trial court does not make specific findings of fact, this court will assume that the trial court made those findings necessary to support its judgment, unless such findings would be clearly erroneous. Etno, Inc. v. Rivers, 644 So.2d 3 (Ala.Civ.App.1994).' Simmons v. Woerner Bros. P'ship, 674 So.2d 588, 589 (Ala.Civ.App.1995)."
BSI Rentals, Inc. v. Wendt, 893 So.2d 1184, 1186 (Ala.Civ.App.2004). Because it appears that a finding that the Dabbses overpaid $7,000 to Secondary Metals would be against the great weight of the evidence, we decline to credit that amount toward the "cost of the undertaking" for purposes of the application of § 34-8-1. Because the $2,718.14 that the Dabbses argue they overpaid to United would not, when combined with the $45,792 cost of Graves's labor, bring the "cost of the undertaking" to $50,000 or more, we decline to address that issue.
Relying on Thomas Learning Center, Inc. v. McGuirk, 766 So.2d 161 (Ala.Civ. App.1998), the Dabbses further assert that the cost of materials from United, Secondary Metals, and Blue Star Ready Mix, which, the Dabbses argue, were charged on Graves's account and were ordered by Graves, are to be included in the "cost of the undertaking." In Thomas, this court determined that the "cost of the undertaking" for purposes of § 34-8-1 was within $20,000[11] when McGuirk, the builder, had told the Thomases that he had his own architect and then purported to execute one contract for building an addition to a day-care center in the amount of $19,610 and a separate contract for drawing services in the amount of $390. The contract for the project provided that the job consisted of a separate contract for drawing services and designated the $390 as a "drafting fee." In concluding that the builder was bound by § 34-8-1, this court stated, in pertinent part:
"The Alabama Supreme Court has not been presented with a case in which it has had to decide whether the `cost of the undertaking' includes only the sum that the contractor is to receive for his work, or whether it also includes amounts that others over whom the contractor exercises some degree of control are due to receive for their work. Courts in other jurisdictions have held that if the contractor retains control over subcontractors or over purchases passing through his accounts, then the owner's payments for those expenditures add to the `cost of the undertaking' and, if the payments meet the statutory threshold, they make the contractor subject to the general-contractor licensing requirements. See, e.g., Spears v. Walker, 75 N.C.App. 169, 330 S.E.2d 38 (1985); Fulton v. Rice, 12 N.C.App. 669, 184 S.E.2d 421 (1971).
*553 "In Spears, the North Carolina Court of Appeals, construing a statute virtually identical to § 34-8-1, held:
"`In interpreting [the general-contractor licensing statutes] and ascertaining the extent to which an undertaking and its cost should be attributed to a particular contractor, the courts in North Carolina have focused on the control exercised by the contractor over the project.'
"In Fulton, the North Carolina court rejected an owner's argument that additional payments it made to third parties, pursuant to agreements outside the scope of its agreement with the contractor, should be included to bring the `cost of the undertaking' up to the statutory threshold. The court explained that the cost of a contractor's undertaking is limited to those payments that he, or someone over whom he has control, receives.
"Applying the foregoing principles of law to the undisputed facts of this case, we think it is clear that the cost of McGuirk's undertaking was $20,000 rather than $19,610. McGuirk told the Thomases that he had `his own architect,' Bennie Freed of BAF Drafting, who would design the addition. The record does not disclose the contractual arrangements between McGuirk and Freed, but it is apparent that it was McGuirknot the Thomaseswho engaged Freed's services and negotiated his fee. Despite the fact that Freed's $390 fee was designated as a payment arising out of a `separate contract for drawing services,' it is evident that McGuirknot the Thomasesexercised control over the design phase of the contract. . . .
"Our supreme court has held that § 34-8-1 is not a law enacted solely for revenue purposes, but is, instead, regulatory legislation designed to protect the public against incompetent contractors and to assure properly built structures that are free from defects and dangers to the public.
"`In 1935, the legislature first enacted what is now codified at Code 1975, § 34-8-1 et seq., in order, primarily, "to protect the public against incompetent contractors for certain type structures, which [are] free from defects and dangers to the public." Cooper v. Johnston, 283 Ala. 565, 567, 219 So.2d 392, 394 (1969). Indeed, the Cooper Court, after studying the original act and the subsequent legislation amending the act, held that the act appearing at § 34-8-1 et seq. was enacted "for regulation and protection as distinguished from a law created solely for revenue purposes." Cooper, 283 Ala. at 567, 219 So.2d at 394.'
"J & M Industries, Inc. v. Huguley Oil Co., 546 So.2d [367] at 368 [(Ala.1989)].
"We conclude that the $390 `drafting fee' for Bennie Freed must be included in the `cost of [McGuirk's] undertaking' so as to bring McGuirk within the requirements of the general-contractor licensing statutes. A contrary holding would encourage unscrupulous contractors to avoid the requirements of the licensing statute by designating payments to subcontractors and suppliers as incident to `separate contracts.' Our supreme court has stated:
"`The importance of the regulatory nature of the statute, and the protection it affords the citizens of Alabama, cannot be avoided by unlicensed contractors who, through creative schemes, seek to circumvent the requirements of § 34-8-1 et seq.'
"Med Plus Properties v. Colcock Constr. Group, Inc., 628 So.2d 370, 374 (Ala. 1993)."
*554 Thomas, 766 So.2d at 168-70 (footnote omitted).
Graves argues that the Dabbses were to provide and pay for all materials used on their project, that the checks written for the materials used on the project were made out to the suppliers directly and not to Graves, and that there is no evidence indicating that Graves had any control over the suppliers of the materials in the present case. Thus, Graves argues that, based on the discussion of Fulton v. Rice, 12 N.C.App. 669, 184 S.E.2d 421 (1971), and Spears v. Walker, 75 N.C.App. 169, 330 S.E.2d 38 (1985), in Thomas, which focuses on the contractor's control over the project, the cost of the materials in the present case should not be included in the "cost of the undertaking." We disagree.
In Fulton, the landowner entered into a written contract with the builder to erect a precut log cabin; the contract stated that the owner would provide all materials, including the structure, but excluding miscellaneous materials that the builder was to provide. 12 N.C.App. at 669-70, 184 S.E.2d at 421. The court determined that, because the builder had "no control over the purchase of materials or other expenses which the owner might incur and no way of insuring that he did not exceed the statutory cost limitation and thus fall within the definition of a general contractor," he was not within that definition. 12 N.C.App. at 672, 184 S.E.2d at 423. In Spears, the court determined that, unlike in Fulton, the builder retained control over the purchase of materials through his bank account and accounts with the suppliers, that the builder "exercised a substantial degree of control by his supervision of construction, his purchase of materials and his selection of material suppliers," and it affirmed the trial court's determination that the builder fell within the definition of a general contractor. 75 N.C.App. at 172, 330 S.E.2d at 40.
In the present case, as in Spears,[12] Graves selected the suppliers and the materials to be used in the project, he maintained the accounts with the suppliers in his own name, and he remained in control of the purchases of materials. Both Graves and Joan testified that Graves ordered materials and would later approach the Dabbses requesting a check for the amounts due for the materials and that Joan would write a check to the suppliers, which Graves would then deliver to the suppliers. Graves and Jim Terry both testified that the account for the project with United was in Graves's name. The Dabbses did not receive invoices for the materials from Graves and did not see the invoices until Joan and Graves began having disagreements about the project and she contacted United for copies of the receipts for their materials. Unlike in Fulton, the Dabbses did not select or order the materials to be used in the project; Graves was in full control of the materials. Although the Dabbses agreed to pay for the materials for the project, the attempt to categorize the purchase of the materials as a separate transaction from Graves's contract to build the Dabbses' project, like the attempt to separate the "design fee" from the building contract in Thomas, cannot succeed. We conclude, based on Thomas, that Graves cannot circumvent the requirements of § 34-8-1 by virtue of the fact that the Dabbses' checks were made directly to the material suppliers although he retained control of the purchase *555 of materials. As a result, the amounts paid for materials to the suppliers by the Dabbses, including $7,994.70 to Secondary Metals, approximately $41,605.23 to United, and $1,733.10 to Blue Star Ready Mix, are to be included in the "cost of the undertaking" for purposes of § 34-8-1. The addition of those amounts to that requested by Graves for his labor brings the cost of the undertaking to an amount well above $50,000, and, therefore, we conclude that Graves was performing the work of a general contractor within § 34-8-1. Because Graves was not a licensed contractor at the time that he performed the work for the Dabbses, their oral contract for the construction of the project is unenforceable. As a result, we reverse that portion of the trial court's judgment finding in favor of Graves on his breach-of-contract claim against the Dabbses.[13]
The Dabbses next argue that the trial court erred in failing to award damages to the Dabbses for breach of the contract by Graves. The Dabbses argue that the testimony by Whitten, Phares, and Tapscott, in addition to other evidence supporting their assertion that Graves's work was substandard, which they say Graves did not refute with expert testimony, supports a finding that Graves's actions constituted a breach of contract for which the Dabbses should be awarded the reasonable value of the extra work necessary to correct the defects in Graves's work.
It was undisputed at trial that only Graves and Joan were present when the stipulations of the contract were discussed and that there was no written agreement. Both Graves and Joan stated that, pursuant to their agreement, Graves was supposed to pour the concrete that was to be added to the front of the existing building to make the towers and that he was supposed to add a second floor and install a new roof on the existing building. Joan testified that Graves was also supposed to build a front door and a back door, to build stairs to the second floor of the building, to place posts and a bannister on the stairs, and to cut a doorway out of the concrete blocks that separated the apartment portion of the building from the store portion. According to Graves, he and Joan had agreed that Graves was to construct the outside of the building and that he was not responsible for any construction on the inside of the building.
Evidence was presented at trial regarding a number of problems with Graves's construction. According to Whitten, when he took over the job, he reinstalled the headers for the windows and the bracing for the rafters because Graves had improperly constructed those items. Graves testified that the entire building was "a foot out of square," that the Dabbses were aware of that problem, and that they had told him to do the best that he could to make it work. Graves stated that the whole building was uneven and that he had "shimmed it up" everywhere to make it work. Graves stated that the floor was three or four inches out of level because it was set on a grade but that he had raised the window level.
Tapscott testified that a girder, which was supporting the main upstairs floor, and the attached floor joists had been improperly installed, which was causing the main upstairs floor to sag. When asked if *556 he was aware that the Dabbses had had to "jack up" support for the top floor because it was sagging and was not properly supported, Graves stated that it had been correctly done when he had left the job and that, if it was sagging, that was an indication that the concrete slab the Dabbses had wanted to build on had not been done correctly and that he had had no part in installing that concrete slab.
The testimony of Whitten, Phares, Joan, and Shane indicated that Graves had installed a PVC pipe as a gutter and that, as a result, water had leaked into the building, damaging the sheet rock and the paint, and that Joan had purchased the materials for Whitten to replace the PVC pipe with a "proper gutter system." Graves, however, testified that he had replaced the PVC pipe he had originally installed with a larger PVC pipe and that it had been draining properly and was not leaking when he left the project.
Whitten also testified that Graves had improperly installed the Hardie plank, or concrete board, by putting a space between the planks with a nail and trying to caulk the spaces when the planks should have been butted together with caulk between the planks; as a result, according to Whitten, the Hardie plank was cracking apart and pulling up. Tapscott also testified that he had observed Hardie plank that had been improperly installed because it was overlapping where it should have been attached with a small seam of caulk. Graves testified that an employee of United, where he had purchased the materials, had instructed him that there was supposed to be a one-eighth-inch space between the boards, that he had sealed those boards, and that the Dabbses had been responsible for painting over them to seal them further. Joan testified that Graves had told them that they could either paint the Hardie plank or leave it natural.
Phares testified that Graves had improperly framed the upstairs portion of the project and that she and Whitten had had to take the headers down and had had to rework the columns on the inside to make the repairs. Graves testified that he had installed the columns inside the building and had divided off all of the rooms at the Dabbses' request and that he had completed both of those projects as the Dabbses had requested. Joan testified that Whitten had had to replace the window casings that Graves had installed because she had wanted a post instead. Joan also testified that Graves had built stairs to the second floor inside the building but that they had not been properly supported and had had to be replaced.
At trial, Joan testified that Graves had essentially done the things that he was supposed to do pursuant to their contract but that he had performed the job poorly and that much of his work had had to be replaced. She stated that she had paid Whitten and Phares approximately $12,124 to complete the project and that they had not done any work that she had not contracted with Graves to do. The Dabbses opened the store in February 2005 after Whitten and Phares had completed their work on the project. Tapscott, who visited the store after it had been reopened, testified that he had observed several other problems with the construction of the building, including loose trim and improper truss installation. Tapscott estimated that it would cost approximately $36,602.05 to repair all the problems with the building, although he admitted that that estimate was a guess because he would not know what needed to be done until he "tore in" to the project.
The Dabbses also assert on appeal that Graves removed materials from their *557 project that the Dabbses had paid for.[14] Whitten and Phares both testified that they had seen materials removed from the Dabbses' project by Graves, including wood, chip board, and Hardie plank. Joan and Shane also testified that Graves had removed approximately 50 panels of Hardie plank from the site. Evidence was presented indicating that, at the time he was working on the Dabbses' project, Graves was on "suspended work release" as a result of having received stolen property in 2000. Graves testified, however, that he had not taken any materials from the Dabbses' job site. Whitten, Phares, Joan, and Shane each admitted that they were not sure whether Graves had returned with the materials that he had allegedly removed.
Graves testified that, during the time he was working on the Dabbses' project, the Dabbses had never complained to him about the way he was constructing the building and that, after he left in August, they had not contacted him about any complaints they had with the construction. According to Joan, in July 2004, while Graves was still working on the project, she had hired Graves to install a deck around a swimming pool at her residence. Graves testified that, at the time he left the Dabbses' project, he had completed everything that he was supposed to under the terms of the contract. Jim Terry testified that he had been to the Dabbses' site in August 2004, after Graves had left the job, and that the outside of the building "was pretty well completed."
The determination of the terms of an oral contract is for the trier of fact. Black Diamond Dev., Inc. v. Thompson, 979 So.2d 47, 52 (Ala.2007). "Whether a party has substantially performed a promise under a contract is a question of fact to be determined from the circumstances of each case." Cobbs v. Fred Burgos Constr. Co., 477 So.2d 335, 338 (Ala. 1985).
"The ore tenus rule recognizes that the trial judge is better able than is the appellate court to determine the credibility of the witnesses. The trial judge has the discretion of accepting or rejecting testimony of a witness and of giving appropriate weight to testimony because he or she is in a better position to consider the demeanor of the witness and that witness's candor and/or evasion. If the judge has determined that a witness has lied or is lying under oath, he or she can take that fact into consideration when weighing other evidence presented by that witness. See James v. James, 532 So.2d 1031 (Ala.Civ.App. 1988)."
DiIorio v. Long, 839 So.2d 650, 654 (Ala. Civ.App.2001).
In the present case, there was competing evidence presented regarding both the terms of the contract between Graves and the Dabbses and Graves's performance under that contract; the determination of both was in the trial court's discretion. Although the trial court did *558 not make written findings of fact, we must assume that the trial court made those findings necessary to support its judgment, and we must view the evidence in a light most favorable to the prevailing party. Pattans Ventures, Inc. v. Williams, 959 So.2d 115, 120 (Ala.Civ.App.2006). "`Even if this court may have decided differently, it is not [this court's] function to reweigh the evidence or to substitute its judgment for that of the trial court. James v. James, 582 So.2d 560 (Ala.Civ. App.1991).'" McIver v. Bondy's Ford, Inc., 963 So.2d 136, 141 (Ala.Civ.App.2007) (quoting Dees v. Dees, 628 So.2d 945, 947 (Ala.Civ.App.1993)). Because the trial court could have determined that Graves had performed his obligations according to the oral contract with the Dabbses, we must affirm the trial court's decision not to award damages to the Dabbses for breach of contract.
The Dabbses last argue that the trial court erred in finding no slander of title by Teresa Terry d/b/a United True Value or by Graves. The cause of action for slander of title is grounded in Ala.Code 1975, § 6-5-211, which provides that "[t]he owner of any estate in lands may commence an action for libelous or slanderous words falsely and maliciously impugning his title."
"`The elements of a slander of title action are:
"`"(1) Ownership of the property by plaintiff; (2) falsity of the words published; (3) malice of defendant in publishing the false statements; (4) publication to some person other than the owner; (5) the publication must be in disparagement of plaintiff's property or the title thereof; and (6) that special damages were the proximate result of such publication (setting them out in detail)."'
"Merchants Nat'l Bank of Mobile v. Steiner, 404 So.2d 14, 21 (Ala.1981) (quoting Womack v. McDonald, 219 Ala. 75, 76-77, 121 So. 57, 59 (1929))."
Folmar v. Empire Fire & Marine Ins. Co., 856 So.2d 807, 809 (Ala.2003). "The act against which a slander-of-title action is taken must have been false and malicious when it was performed." Folmar, 856 So.2d at 809.
"Malice does not equate with negligence. Alabama Power Co. v. Laney, 428 So.2d 21 (Ala.1983). Malice requires `proof that [the defendant] intentionally disparaged [the] plaintiff's title to the property slandered or recklessly disparaged [it] without information sufficient to support a bona fide belief' in the veracity of the disparaging statement. Harrison v. Mitchell, 391 So.2d 1038, 1041 (Ala.Civ.App.1980) (emphasis added). In other words, `if the defendant had probable cause for believing the statement, there can in law be no malice.' [Merchants Nat'l Bank of Mobile v.] Steiner, 404 So.2d [14] at 21 [(Ala. 1981)] (emphasis added)."
Roden v. Wright, 646 So.2d 605, 611 (Ala. 1994). The Dabbses have not presented an argument on appeal, and we can find no evidence in the record, to support an assertion that either Graves or Teresa Terry d/b/a United True Value maliciously filed their respective liens on the Dabbses' property. On the contrary, Jim Terry testified that United had not received payment for materials that United had delivered to the Dabbses' project. After learning at trial that the Dabbses had paid for the majority of those materials, United released its lien on the Dabbses' property, further indicating the absence of malice in initially filing that lien. Graves also maintained throughout the trial in the present case that the Dabbses owed him for his labor in completing the building, and he *559 presented evidence in support of that claim, evidencing his belief that the lien was legitimate and that he did not file for the lien with malice. Because the Dabbses have failed to present any evidence tending to show that either Teresa Terry d/b/a United True Value or Graves acted with malice in filing their respective liens, we conclude that the trial court did not err in resolving the Dabbses' slander-of-title claims against the Dabbses.
Based on the above-stated reasoning, we affirm those portions of the trial court's judgment finding in favor of Graves on the Dabbses' counterclaim for breach of contract and finding in favor of Graves and Teresa Terry d/b/a United True Value on the Dabbses' slander-of-title claims. We reverse that portion of the trial court's judgment finding in favor of Graves on his breach-of-contract claim against the Dabbses and awarding him damages, and we remand the cause for the entry of a judgment consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
THOMPSON, P.J., and PITTMAN, BRYAN, and THOMAS, JJ., concur.
NOTES
[1] Initially, there were three separate actions in the trial court (case no. CV-04-475, case no. CV-05-302, and case no. CV-05-303); the trial court consolidated those actions. The trial court entered one judgment, and the Dabbses filed a single notice of appeal; three different appeal numbers were assigned to correspond to the three separate case numbers in the trial court (appeal no. 2070630 case no. CV-04-475; appeal no. 2070631 case no. CV-05-302; and appeal no. 2070632case no. CV-05-303). The style of these appeals reflects the parties, and the alignment of the parties, as listed on the Dabbses' notice of appeal.
[2] Graves later testified that he had constructed the store from an existing building and that he had removed the roof from that building but had not torn down the existing building.
[3] Several filings in this case name Teresa Terry d/b/a United True Value, United True Value, and Four Tees, Inc., d/b/a United True Value as parties. It is unclear from the record what the relationship is between those entities; however, for the remainder of this opinion, the party names have been listed in full as they appear on the pleadings and any reference to "United" alone refers to the business from which the materials for the Dabbses' project were purchased.
[4] It appears from Graves's and Joan's testimony that Graves began the project by removing the roof from the existing building and that he then began pouring concrete in the front of the building to create the "towers" for the castle.
[5] See note 3, supra.
[6] See note 3, supra.
[7] This court had remanded the case to the trial court for the trial court to enter an order either certifying its October 16, 2006, order as a final judgment in compliance with Rule 54(b), Ala. R. Civ. P., or adjudicating the remaining claims in the case. Following the remand of the case, Graves had filed a motion to dismiss American General "as party defendant," which was granted by the trial court. This court, however, determined that that dismissal of American General as a "party defendant" did not dispose of American General's counterclaim against Graves. See Dabbs v. Four Tees, Inc., 984 So.2d 454, 456 (Ala.Civ. App.2007).
[8] Although the Dabbses argue in their brief to this court that the alleged overpayment to Secondary Metals was in the amount of $4,000, which amount they arrived at by subtracting $994 from $4,994, the evidence adduced at the trial reveals that the check to Secondary Metals was in the amount of $7,994, and that the alleged discrepancy was for $7,000 rather than $4,000.
[9] Although the actual total of the materials listed is $994.70, the document itself reflects a handwritten total of $7,994.70.
[10] The additional line of items appears at the top of the Secondary Metals invoice. Furthermore, there is a small mark above the first of the materials listed on the handwritten list Graves provided to the Dabbses that suggests that there was an additional line of writing on that list that was not photocopied.
[11] At the time Thomas was decided, the "cost of the undertaking" limitation in § 34-8-1 was $20,000 rather than $50,000.
[12] Although we recognize that the holdings in these North Carolina cases are not binding precedent in Alabama courts, they are discussed alongside Thomas to further develop the analysis in Thomas and to address the arguments raised by Graves on appeal regarding the relation of their holdings to the present case.
[13] Because we are reversing the trial court's judgment in favor of Graves on his breach-of-contract claim against the Dabbses, we decline to address the Dabbses' arguments that Graves engaged in being a "residential home builder" under Ala.Code 1975, § 34-14A-5, and that the trial court erred in awarding Graves a judgment for $30,000 "where the damages, at best, were speculative."
[14] The Dabbses had filed claims against, and sought damages from, Graves for both breach of contract and conversion. On appeal, the Dabbses do not posit the denial of their conversion claim against Graves as a separate issue, but they have cited Graves's removal of materials delivered to their job site as a problem with Graves's construction alongside other problems that, they say, amounted to a breach of contract by Graves. Because the Dabbses do not argue on appeal that the trial court erred in adjudicating their conversion claim in favor of Graves, they have waived any argument relating to that claim, and we decline to address the issue of conversion by Graves. See Rule 28(a), Ala. R.App. P. Any discussion of Graves's alleged removal of materials from the Dabbses' site is in an effort to thoroughly address the Dabbses' arguments that Graves was in breach of the contract. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/456579/ | 770 F.2d 161
Ramseyv.Kendall
85-6161
United States Court of Appeals,Fourth Circuit.
8/14/85
1
D.Md.
AFFIRMED | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1555121/ | 46 F.Supp. 939 (1942)
WALLING, Administrator of Wage and Hour Division, United States Department of Labor,
v.
MUTUAL WHOLESALE FOOD & SUPPLY CO. et al.
No. 548.
District Court, D. Minnesota, Fourth Division.
August 25, 1942.
*940 *941 *942 Donald M. Murtha and James M. Miller, both of Minneapolis, Minn., and Roy C. Frank, of Washington, D. C. (Warner W. Gardner, Irving J. Levy, Mortimer B. Wolf, and Edward J. Fruchtman, all of Washington, D. C., of counsel), for plaintiff.
R. H. Fryberger, of Minneapolis, Minn. (George M. Burditt, of Chicago, Ill., of counsel), for defendants.
NORDBYE, District Judge.
While the facts are not particularly involved, a detailed summary seems necessary. Some years ago, a so-called chain stores operation under the name of C. Thomas Stores Sales System, Inc., was organized. Shortly prior to the commencement of this action, the corporate name was changed by amendment to C. Thomas Stores, Inc., and at the trial hereof, it was agreed that the pleadings might be amended accordingly. Therefore, the title herein has been changed to comply with the amendment agreed upon by the parties. During the early years of its existence, the company did its own wholesale buying. However, on or about January 1, 1935, the Mutual Wholesale Food and Supply Company (hereinafter referred to as Mutual) was organized to take care of the buying and distributing of merchandise handled by the Thomas Stores. It appears from the evidence that the primary purpose of organizing Mutual was to better the buying facilities of the Thomas Stores, in that some manufacturers were hesitant about selling direct to a chain system. At the time Mutual was organized, the C. Thomas Stores was operating its wholesale department at 311 Fifth Avenue North in Minneapolis. When Mutual was organized, it took over this wholesale space, and later purchased the adjoining building at 401 North Third *943 Street. Briefly, it may be stated that Mutual's business is primarily devoted to the purchase of merchandise which in turn is sold to the Thomas Stores, some fifty-seven in number, all located in Minnesota. Mutual handles a general line of staple foods and groceries. About 90% of the goods handled is distributed to the C. Thomas Stores, the balance is distributed to other retail stores in the State. In 1941, Mutual's gross sales approximated four million dollars, and it has some 50 employees, including warehouse men, truck drivers, and office employees. Mutual is divided into two departments dry groceries and produce the former representing approximately 75% and the latter 25% of the total volume of business. Shipments arrive at the warehouse by interstate rail and truck carriers. Some shipments arrive in pool cars consigned to the Merchandise Terminal Warehouse, Inc., the dock and unloading facilities of Mutual being used when the Merchandise Terminal is the consignee. Under such circumstances, the portion of the pool car belonging to Mutual is unloaded and moved directly into Mutual's part of the warehouse. Where pool cars are spotted at railroad team tracks, or the tracks of another wholesaler or broker, Mutual's truck drivers, or at times independent trucks, transport Mutual's portion to the warehouse. Goods coming directly to Mutual's warehouse by freight cars or trucks are generally unloaded by Mutual's employees, the merchandise placed on flats or warehouse trucks and moved into the warehouse. Records of incoming goods are kept by the receiving clerk.
Merchandise Terminal Warehouse, Inc. (hereinafter referred to as Merchandise Terminal), is a licensed warehouse company and has space in Mutual's warehouse. It pays rent for the space so occupied. The service it performs consists largely of the storage of sugar and other staple commodities, and for such services on behalf of Mutual it charges a certain stipulated warehouse rate. It also repackages goods for Mutual in its "Cello" department; that is, where goods are received by Mutual in units or packages too large for sale by the retail stores, the employees of Merchandise Terminal repackage and relabel the same in smaller units. They are then turned over to Mutual for distribution to local stores in the customary manner. As a public warehouse, Merchandise Terminal receives one or two pool car shipments per week. At least half of the pool cars contain goods billed to Mutual. The goods thus billed to Mutual are unloaded and stored in Mutual's warehouse, and the goods billed to other Minneapolis wholesalers are placed in the space allotted to the Merchandise Terminal until picked up by such wholesaler. The unloading of such shipments is generally taken care of by Mutual's employees. At times, Merchandise Terminal makes shipments to points outside of the State on orders from those who have stored goods or merchandise in its warehouse.
C. Thomas Stores, Inc. (hereinafter referred to as C. Thomas), employs some 12 people in the space occupied by it in Mutual's warehouse building. All requisitions from the retail stores are received by this central office so that they are informed as to the goods which the various retail stores desire to have Mutual send to them. These employees of C. Thomas make up the payroll for the employees of Mutual, Merchandise Terminal, Lawrence Warehouse, and of their own staff. Furthermore, the clerical work necessary to the keeping of records and accounts as between C. Thomas and Mutual is performed by C. Thomas' employees. The local stores from time to time do considerable local advertising, and all such advertising is handled through C. Thomas. Such advertising refers to products of manufacturers from both within and outside the State.
Lawrence Warehouse Company (hereinafter referred to as Lawrence) is a national concern engaged in so-called "field warehousing," a system devised to facilitate bank borrowings by wholesalers. Under this system, a three-party contract is entered into among and between Mutual, Lawrence, and a Minneapolis bank. Mutual is the pledgor and the bank is the pledgee. Lawrence is the pledge holder for the bank, taking physical possession of the pledged merchandise in a space or bay in Mutual's warehouse allocated to Lawrence. Goods valued not less than 133% of the loan received by Mutual from the bank are required to remain in Lawrence's possession. Additions and withdrawals are made as the loan increases or decreases. About 60% of all of the goods handled by Mutual is pledged and stored in Lawrence's bay. When goods are not available for filling requisitions of the local stores from Mutual's stock, the orders are filled from any available goods in Lawrence's stock. Under these circumstances, however, other *944 goods must be substituted for the goods withdrawn so that the merchandise which Lawrence holds will not be less than 133% of the outstanding loan. Lawrence receives a certain monthly remuneration for its services, and in addition Mutual reimburses Lawrence for all its labor costs and expenses. There are some five or six employees on Lawrence's payroll. They are principally engaged in checking the goods moving in and out of Lawrence's bay. They handle such merchandise as may from time to time be necessary and keep the clerical records. In that all such labor costs are paid by Mutual, a practice has grown up whereby the employees on Lawrence's payroll are frequently used to perform work for Mutual under the direction of Mutual's warehouse foreman.
The Bailey Food Merchandise Company (hereinafter referred to as Bailey Food) furnishes management service to the Mutual, C. Thomas, and Merchandise Terminal. It has no employees on its payrolls other than its officers and directors.
The Boards of Directors of the defendants Mutual, C. Thomas, Merchandise Terminal and Bailey Food are closely interlocked. L. W. Bailey holds the stock control of Bailey Food Merchandise Company; Bailey Food in turn controls Mutual, Merchandise Terminal, and C. Thomas.
In order to facilitate the movement of merchandise ordered by the local stores, each store manager is provided with a catalog and requisition sheets covering each item of goods handled by Mutual. These orders or requisitions are routed or handled through the office of C. Thomas, and then delivered to Mutual. When the necessary clerical work has been performed, the warehousemen are given the requisition lists and orders are filled from the stock in the so-called "line-up." The merchandise to be sent out is placed on flats or trucks and moved to the loading platform where it is loaded on Mutual trucks and moved by Mutual truck drivers to the local stores. Orders are sent in from the local stores, one to three times a week and the merchandise is usually sent out the following day. Ofttimes there are so-called "back-orders", that is, orders which have remained unfilled because of the absence of the required items of merchandise. At times, these back orders may be filled out of the incoming freight car or truck, or from the flats on to which goods have been recently unloaded. Where there are perishable items to be sent to the stores, it is not uncommon to load the trucks with the required items out of the incoming cars and trucks. It fairly appears that it is Mutual's policy to keep a supply of merchandise on hand to comply with needs of the local stores for approximately ten days. A relatively rapid turn-over is sought. The average turn-over for groceries is about fifteen times annually and for produce items about forty-five times annually.
The parties are in accord that the primary question presented is whether employees engaged in unloading and warehousing goods arriving from points outside the State and in the distribution of such goods to retail stores throughout the State of Minnesota are engaged in commerce within the purview of the Fair Labor Standards Act, 29 U.S.C.A. § 201 et seq. The Act applies to all employees "engaged in commerce". At the outset, therefore, it becomes necessary to determine the proper test to be adopted in ascertaining the coverage of the Act. Plaintiff assumes to support the position that all of the employees of these defendants facilitate the flow of goods moving in the stream of commerce, and therefore are engaged in commerce within the purview of the Act. It is urged that the Mutual's warehouse must be viewed as an "economic sluice for goods moving in commerce," similar to stockyards Stafford v. Wallace, 258 U.S. 495, 42 S.Ct. 397, 66 L.Ed. 735, 23 A.L.R. 229; tobacco warehouses Mulford v. Smith, 307 U.S. 38, 59 S.Ct. 648, 83 L.Ed. 1092; or grain trading markets Board of Trade of City of Chicago v. Olsen, 262 U.S. 1, 43 S.Ct. 470, 67 L.Ed. 839. It is earnestly contended that the business of Mutual and the associated defendants is that of distribution and not storage, and that such business involves a continuous flow of extrastate goods through the warehouse to the stores by reason of the anticipated demands of the local stores. Plaintiff urges, therefore, that a practical concept of the term "commerce" should be adopted "attuned to the realities of business intercourse."
However intriguing the suggested analysis of commerce may be, the majority of the courts which have construed the Fair Labor Standards Act have refused to apply the "stream of commerce" test to analogous situations. While Congress undoubtedly has authority to regulate or control local activity which adversely affects interstate commerce, it did not use any language *945 in this Act which indicates that it enacted this legislation with that concept of commerce in mind. It is significant that it expressly limited the application of the Act to employment in commerce, or where goods are produced for commerce, or sold with knowledge that shipment in interstate commerce was intended. In Jewel Tea Company v. Williams, 10 Cir., 118 F.2d 202, the Act was held not applicable to certain route salesmen who were engaged in intrastate distribution of products originating outside the State, reversing the trial court which had found the salesmen to be engaged in interstate commerce because there was an uninterrupted stream of commerce moving from outside the State through a local warehouse and through these salesmen to the customer. The court stated (page 207 of 118 F.2d):
"Where goods are ordered and shipped in interstate commerce to meet the anticipated demands of customers without a specific order therefor from the customer and the goods come to rest in a warehouse, the interstate commerce ceases when the goods come to rest in the state. It does not continue until the demand eventuates in the form of an order and the merchandise is delivered to the retailer."
In Walling v. Goldblatt Bros., Inc., 7 Cir., 128 F.2d 778, the plaintiff presented the same theory of commerce as urged herein, and the factual situation is quite analogous hereto. In response to the suggestion that the stream of commerce test should be applied, the court stated (page 782 of 128 F.2d):
"Plaintiff insists, however, that those who move goods from the platform into the warehouse, those who store them in the proper places, those who take care of them there, those who deliver them to the Illinois stores, and those who do the clerical work involved in such storage and delivery are within the Act. Plaintiff argues that all these activities are merely part of the `stream of commerce' from the place of origin to the retail stores. But we are not dealing with a typical `current of commerce' case. The `current of commerce' test arises in differently phrased statutes involving a wide flow of goods from one state to another through a throat or vent. United States v. Wrightwood Dairy Co., 315 U.S. 110, 62 S.Ct. 523, 86 L.Ed. ___; Stafford v. Wallace, 258 U.S. 495, 42 S.Ct. 397, 66 L.Ed. 735, 23 A.L.R. 229; Swift & Co. v. United States, 196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518; Board of Trade of City of Chicago v. Olsen, 262 U.S. 1, 43 S.Ct. 470, 67 L.Ed. 839; Currin v. Wallace, 306 U.S. 1, 59 S.Ct. 379, 83 L.Ed. 441; Krueger v. Acme Fruit Co., 5 Cir., 75 F.2d 67. Here the language is different; the test is whether employees are `in commerce.'"
In Jax Beer Co. v. Redfern, 5 Cir., 124 F.2d 172, 174, it was urged that the "stream of commerce" test should apply, and the Wage and Hour Division in its brief as amicus curiae stressed the language used in decisions under the National Labor Relations Act, 29 U.S.C.A. § 151, et seq. The court stated, however, that these decisions were not applicable for, as pointed out by the Supreme Court, "the `critical words' of the National Labor Relations Act are `affecting commerce'", and that the Fair Labor Standards Act does not employ the critical words "affecting commerce," but that it applies to employees "engaged in commerce."
This conclusion was reached by the same court in Swift & Co. v. Wilkerson, 5 Cir., 124 F.2d 176, and Fleming v. Jacksonville Paper Co., 5 Cir., 128 F.2d 395. The "stream of commerce" test has been rejected in Rauhoff v. Henry Gramling & Co., D.C.Ark.1941, 42 F.Supp. 754; Moses v. McKesson & Robbins, Inc., D.C.Tex. 1942, 43 F.Supp. 528; Brown v. Bailey, 177 Tenn. 185, 147 S.W.2d 105; Isbell v. Wood & Co. (Ala. Intermediate Civil Ct. of Birmingham, 1941), 4 Lab.Cas. 60,723.
While in the following cases the "stream of commerce" theory was not discussed, the courts did not apply the test, holding the Fair Labor Standards Act was not applicable to the intrastate distribution of goods originating without the State. Veazey Drug Co. v. Fleming, D.C.Okla.1941, 42 F. Supp. 689; Drake v. Hirsch, D.C.Ga.1941, 40 F.Supp. 290; Klotz v. Ippolito, D.C. Tex. 1941, 40 F.Supp. 422; Serio v. Dee Cigar & Candy Co., Inc., (Ala.Cir.Ct.1941) 4 Lab.Cas. 60,734; Jehs v. Singer Sewing Mach. Co., D.C.Okl.1941[1]; Higgins v. Carr Bros. Co., Me.1942, 25 A.2d 214; Gibson v. Glasgow, Tenn.Sup.1942, 157 S.W. 2d 814. See, also, Fleming v. American Stores Co., D.C.Pa.1941, 42 F.Supp. 511, where there was an alternative holding that the local distribution was within the retail store exemption; Gerdert v. Certified Poultry & Egg Co., D.C.Fla.1941, 38 F.Supp. *946 964; Eddings v. Southern Dairies, D.C.S. C.1942, 42 F.Supp. 664.
Plaintiff relies upon Fleming v. Alterman, D.C.Ga.1941, 38 F.Supp. 94, and Gavril v. Kraft Cheese Co., D.C.Ill.1941, 42 F. Supp. 702. In the Alterman case, the court relied heavily upon cases which interpret other statutes, such as the National Labor Relations Act, 29 U.S.C.A. § 151 et seq., the Agricultural Adjustment Act of 1938, 7 U.S.C.A. § 1281 et seq., and the Tobacco Inspection Act, 7 U.S.C.A. § 511 et seq., without alluding in any particular to the difference in the wording and the evident scope of these statutes. In the Gavril case, the court relied upon an interpretation by the Federal Trade Commission of the Clayton Act, 15 U.S.C.A. § 12 et seq. and the Robinson-Patman Amendment thereto, 15 U.S.C.A. § 13(a), in concluding that a continuous, uninterrupted flow and current of commerce was the test of commerce under the Fair Labor Standards Act. However, this court likewise makes no mention of any differences in the wording of the acts compared. In addition, plaintiff asserts the applicability of the "stream of commerce" test used in the interpretation of the Natural Gas Act, 15 U.S.C.A. §§ 717-717w Illinois Nat. Gas Co. v. Central Illinois Public Service Co., 314 U.S. 498, 62 S.Ct. 384, 86 L.Ed. 371; and the interpretation of interstate commerce in decisions construing anti-trust statutes Swift & Co. v. United States, 196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518; Binderup v. Pathé Exchange, Inc., 263 U.S. 291, 44 S.Ct. 96, 68 L.Ed. 308; United States v. General Motors Corporation, 7 Cir., 121 F.2d 376. However, all of these cases were considered by the Circuit Court of the Seventh Circuit in Walling v. Goldblatt Bros., supra, and they were distinguished from the statute that Congress enacted herein. In regard to the General Motors Case, supra, which was decided by the Seventh Circuit, the court dismissed the alleged analogy of that holding in the interpretation of the present statute by stating (page 783 of 128 F.2d):
"* * * The General Motors case had to do with `restraint of commerce.' We held merely that what occurred prior to delivery to the consumer was properly considered in determining whether there had been, `restraint of commerce,' not that employees of the dealer were in commerce."
In view, therefore, of the manifest weight of authority which rejects the "stream of commerce" test in similar situations, we pass to consider when interstate commerce ceases in the activities carried on by the defendant companies whose employees may at times be engaged in such commerce.
When extra-state goods are shipped to Mutual and Merchandise Terminal, it is evident that the destination intended by the parties is the warehouse. It is there these shipments come to rest. That is the end of the journey across the state line. Certainly, any other destination was not known or contemplated when the shipment was delivered to the carrier at the point of origin. The other handling of the merchandise, therefore, would be a local transaction. There is no evidence or contention that the ordering of goods by Mutual and Merchandise Terminal was in response to any particular previous requisition therefor, or that any certain extra-state shipments were to be destined to any other destination except the warehouse. Anticipation of demands of the local stores herein do not differ from the comparable moving of goods from any wholesale warehouse or wholesale house to its customers. The corporate set-ups of Mutual, Merchandise Terminal, C. Thomas, and Bailey Food are bona fide and were undoubtedly devised to facilitate and improve the handling of the business and operations of the concerns named. The plan of handling the business, the management, the financial arrangements, and all other details were in existence before the adoption of the Fair Labor Standards Act, and it is not suggested that the system of doing business in the use of various corporations in facilitation thereof was set up or devised in order to evade the Act. C. Thomas is not only a separate corporation, but it does not have the same stockholders as Mutual, nor do the parties hold stock in them in the same proportions. Its business is primarily the sale of merchandise at retail to customers in the State of Minnesota. It pays a separate income tax, maintains separate payrolls, reports separately on its social security taxes, and is in every way a separate and distinct institution.
In giving a practical and realistic construction to the language used by Congress in this Act, it seems evident that interstate commerce must end at some time. Otherwise, it would be just as logical to urge that interstate commerce continues until the merchandise reaches the consumer because, forsooth, the goods never came to rest in the retail stream on account of *947 the rapid turn-over between the delivery to the local stores from the warehouse and the ultimate delivery to the consumer. In determining when interstate commerce ends, we have the views of three Circuit Courts of Appeal which have recently expressed their views thereon.
In the Fifth Circuit, in Fleming v. Jacksonville Paper Co., supra, page 398 of 128 F.2d, the court stated:
"Without reviewing the multitude of decided cases as to when interstate transportation ends, we are justified in holding that after imported goods are delivered to and received by the importer, and become part of his property held within the State subject to his disposition, whether in the original containers or not, the subsequent sale and delivery of them within the State is intrastate commerce. The typical case is a stock of goods in a warehouse awaiting sales. It does not matter that the goods were imported with a view to selling them afterwards to particular customers, or that according to past experience they would likely be sold to them, or would surely be sold to someone very soon. If they come to rest in the hands of the importer, they have ceased to be in interstate commerce because of their importation, and his employees thereafter engaging solely in selling them within the State are not employed in interstate commerce."
In the Seventh Circuit, in Walling v. Goldblatt Bros., supra, the defendant owned and operated three warehouses in Chicago, at which it received merchandise from some 45 states and from which it thereafter distributed goods to some seven department stores which it owned in the City of Chicago. These department stores sell at retail and the warehouses were necessary "implements of defendant's business in buying, receiving, storing and distributing goods." Further, it appeared that merchandise was received at the warehouses daily and shipped from day to day to the retail stores. In determining when interstate commerce ceased so as to ascertain which employees were under the Fair Labor Standards Act, the court arrived at the following conclusion (page 782 of 128 F. 2d):
"Where orders are solicited within a state and the goods are shipped from without the state directly to the customer or to an agent for delivery to the customer the transactions are a part of interstate commerce until the goods reach the customer. Jewel Tea Co. v. Williams, 10 Cir., 118 F. 2d 202, 206, and cases there cited; Binderup v. Pathé Exchange, Inc., 263 U.S. 291, 44 S.Ct. 96, 68 L.Ed. 308; Federal Trade Commission v. Pacific States Paper Trade Ass'n, 273 U.S. 52, 47 S.Ct. 255, 71 L.Ed. 534. But here there were no such prior orders. Defendant knew in advance from its records, in a general way, the needs of the retail stores and acted accordingly. But defendant was not relying on existing orders from its stores or customers. The goods arrived at the warehouses and came to rest. They were not destined for any specific customer or store. The mere fact that an anticipated local transaction causes movement in interstate commerce is not sufficient to constitute the wholly local transaction after arrival a part of commerce. Jewel Tea Co. v. Williams, 10 Cir., 118 F.2d 202, 207, and cases there cited; Lipson v. Socony Vacuum Corp., 1 Cir., 87 F.2d 265, 267. Where goods are delivered to the buyer to be sold later and delivered to intrastate buyers subsequent acts are not commerce. Jax Beer Co. v. Redfern, 5 Cir., 124 F.2d 172, 174; Swift & Co. v. Wilkerson, 5 Cir., 124 F.2d 176; Jewel Tea Co. v. Williams, 10 Cir., 118 F. 2d 202; Gerdert v. Certified Poultry & Egg Co., D.C., 38 F.Supp. 964; Veazey Drug Co. v. Fleming, D.C., 42 F.Supp. 689; Klotz v. Ippolito, D.C., 40 F.Supp. 422; Foster v. National Biscuit Co. [D.C.], 31 F.Supp. 552; Lipson v. Socony Vacuum [Corp.], 1 Cir., 87 F.2d 265; Atlantic Coastline R. [Co.], v. Standard Oil, 275 U.S. 257, 48 S. Ct. 107, 72 L.Ed. 270; Winslow v. Federal Trade Commission, 4 Cir., 277 F. 206; Fleming v. Arsenal Bldg. Corp., D.C., 38 F.Supp. 207; Rauhoff v. Henry Gramling & Co., D.C., 42 F.Supp. 754."
See, also, Jewel Tea Co. v. Williams, supra.
Undoubtedly, there are certain employees of some of these defendants who are engaged in interstate commerce and others in intrastate business. It seems quite elementary that the unloading and checking in of merchandise received through the channels of interstate commerce by a wholesale house is work in commerce within the purview of the Act. Fleming v. Jacksonville Paper Co., 5 Cir., 128 F.2d 395; Fleming v. American Stores Co., D.C.Pa.1941, 42 F.Supp. 511; Jax Beer Co. v. Redfern, 5 Cir., 124 F.2d 172; Walling v. Goldblatt Bros., 7 Cir., 128 F.2d 778; Gibson v. Glasgow, Tenn.Sup.1942, 157 S. *948 W.2d 814; Klotz v. Ippolito, D.C.Tex., 40 F.Supp. 422.
But the work of employees engaged in the warehousing or storing and the intrastate distribution of merchandise at one time received through the channels of interstate commerce is not work in commerce within the legislative intent. Fleming v. Jacksonville Paper Co., supra; Walling v. Goldblatt Bros., supra; Jewel Tea Co. v. Williams, supra; Moses v. McKesson & Robbins, Inc., supra; Drake v. Hirsch, supra; Eddings v. Southern Dairies, Inc., supra; Higgins v. Carr Bros. Co., supra; Isbell v. Wood & Co., supra. In that Mutual receives merchandise in many different ways, it becomes necessary to examine and determine which ways are in interstate commerce. The defendants have introduced a series of charts marked Defendants' Exhibits PP through WW, inclusive, in which are classified the merchandise of all classes which Mutual receives. The various categories may be stated as follows, the numbering and lettering conforming to that of the charts:
1-A (w). Merchandise produced and delivered within the State. Since this merchandise never left the State, it is clear that the receipt thereof could not be in commerce.
1-A (x). Merchandise delivered from manufacturers' local warehouse stock. There has been no showing that Mutual was the intended destination of this merchandise when it was shipped in interstate commerce. Moreover, there is no testimony that such shipments did not "come to rest" in the manufacturers' local warehouse. These deliveries, therefore, to Mutual would be intrastate in character.
1-A (y) Drop shipments originating in the State. By its very terms, this class includes only such merchandise which was not intended for delivery to Mutual until it was already in the State, if perchance it ever was without the State. The movement is not in interstate commerce.
1-A (z). Purchases from Minnesota farmers or producers by or for Mutual's account. This merchandise never crossed State lines and is not in interstate commerce.
1-B. Carload shipment consigned to others delivered to Mutual after arrival in State: 1-C. Pool cars consigned to others, purchase made and billed from within the State; 1-D. Pool car consigned to others, purchased from within the State, billed from without the State. These three classes will be considered together. It is quite impossible to tell from the chart or the testimony whether delivery was intended to Mutual in all instances when the merchandise may have been shipped in interstate commerce. It may be argued that because of the fact that the car was consigned to others than Mutual, delivery to Mutual therefore was not intended. But this assumption, of course, is not conclusive. It does appear from the testimony that at times carloads of groceries would be purchased by Mutual after arrival in the State and then would be spotted at Mutual's warehouse. Then, again, merchandise might be shipped to others than Mutual where the shipment was not in response to an order from Mutual. An instance of this type would arise where the consignee refused the shipment, and then, after arrival, arrangements were made with Mutual for its purchase. It would seem that if the shipment had "come to rest," the interstate character of the shipment had probably ceased. However, types of shipments in the categories just discussed were relatively few. There is testimony that there would be purchases of produce where orders would be placed with a broker or producer, and that in response to those orders produce would be shipped into the State consigned to the jobber or producer. Mutual would be notified, and after inspection, it would accept or reject the shipment. Delivery to Mutual being intended when the merchandise was shipped in interstate commerce, this shipment obviously would be in commerce until it was unloaded at Mutual's warehouse. The right of rejection would be immaterial, and whether the billing was from within or without the State would be immaterial, in so far as its effect upon the character of the shipment was concerned.
1-E. Pool cars consigned to Mutual. Here, it is apparent that it was intended that the goods should be delivered to Mutual when the goods were shipped from outside the State. The merchandise, therefore, was in interstate commerce when delivered to Mutual, and the employees engaged in unloading such cars and checking the merchandise were therefore engaged in interstate commerce.
1-F. Full or split cars, sight draft, bill of lading. It is assumed that Mutual was the destination intended when merchandise under this classification was *949 shipped. The fact that it was shipped on a sight draft bill of lading is immaterial for the purpose of determining whether it was in interstate commerce at time of arrival. Shipments received in this manner by Mutual would be in interstate commerce.
2. Merchandise originating outside of the State, unloaded into warehouse by truck carrier, express, railroad store door delivery. Since this merchandise is unloaded into the warehouse or on to the docks of Mutual by employees of the carrier, it must be assumed that this was the destination intended at the time the merchandise was shipped in interstate commerce, and therefore its interstate character ceased upon its delivery. Any subsequent handling of this merchandise is not in interstate commerce.
3. Railroad shipments originating out of the State f.o.b. Minneapolis. Mutual's warehouse is apparently the destination intended when this merchandise is shipped, and therefore it is still in interstate commerce when received at the warehouse. The question of who pays the freight is immaterial.
4. Rail shipments originating out of the State f.o.b. shipping point. These shipments are clearly in interstate commerce when received by Mutual at its warehouse.
5. Drop shipments from out of the State. Testimony on this item was to the effect that drop shipments were made direct to the retail stores and not through the warehouse of Mutual. Since none of Mutual's employees handles these shipments, they are immaterial in this action. It is not contended that the employees at the retail stores who may have handled these shipments are engaged in interstate commerce.
To summarize, therefore, it may be stated that categories 1-E, 1-F, 3 and 4 are classes in which merchandise arrived at Mutual's warehouse in interstate commerce and that a portion of the merchandise arriving in classes 1-B, 1-C and 1-D may have been in interstate commerce when it arrived, but the exact amount of interstate commerce in these classes has not been proved with definiteness. Taking the percentage given on Defendants' Exhibit UU, in so far as it refers to classes 1-E, 1-F, 3 and 4, it would appear that at least 17.96% of the merchandise coming into Mutual's warehouse is in interstate commerce at the time it is handled by the employees in unloading. While this percentage may be relatively small as compared to the total shipments, it is not so insignificant that the Court should apply the de minimis doctrine. Muldowney v. Seaberg Elev. Co., D.C.,N.Y.1941, 39 F. Supp. 275; Nelson v. Southern Ice Co., Inc., (D.C.Tex.1941).[1]
Reference has been made to the filling of back-orders and the occasional practice of unloading some merchandise from incoming cars on to the trucks for transportation to the local stores. The proportion of such instances is indefinite, and whether any particular shipment was in interstate commerce when it was spotted at the Mutual loading platform is likewise uncertain. However, the back-orders must be entered upon the perpetual inventory machine before merchandise involved is moved to the local stores. All additions and withdrawals are reflected on the perpetual inventory and some form of an order sheet or invoice necessarily accompanies the goods going to the local stores. It is fair to find, therefore, that many of the shipments figuring in such transactions came to rest in interstate commerce before any transportation to the stores began. When perishable goods are unloaded on to waiting trucks from railway cars, the merchandise must likewise be entered upon Mutual's perpetual inventory, and substantially the same book routine is followed as pertains to the goods moved from the warehouse stock. Consequently, the observations made with reference to the filling of back-orders are pertinent and applicable to such occurrences. While, strictly speaking, there may be times when the unloading from cars directly on to the trucks may be classed as work in interstate commerce, the instances are comparatively infrequent and such activities alone should not place an employee in interstate commerce if the rest of his work is all of an intrastate character. That is, the evidence discloses that there are occasions when the loaders of outgoing trucks may take a small portion of the load directly from a car which is being unloaded on to Mutual's loading platform. A loading of isolated items of merchandise under such circumstances, in light of the character of the *950 evidence herein, would not place such employees in interstate commerce.
It is apparently well recognized that some employees of an employer may be subject to the Act, while others are not. Manifestly, it will be difficult on the evidence submitted to determine with exactness the precise status of the daily activities of the various employees of these defendants in so far as their activities being in or outside of interstate commerce are concerned. In Interpretative Bulletin #5, the Administrator has ruled that "in determining the applicability of the Act, the work week is to be taken as the standard." Apparently, therefore, it is the Administrator's view that if any employee during any week is engaged in interstate commerce to any extent, he is entitled to the benefits of the Act. According to this interpretation, it would be immaterial that, during some part of that week, he was engaged in work not in interstate commerce. Presumably, it would be possible for an employee to be under the Act one week and outside its benefits the next, and the burden would rest on the employer to properly segregate the activities of any employee so that violation of the Act would not occur. Recognizing that some practical standards must be used to facilitate the task of the employer in this regard, the rulings and interpretation of the Administrator are approved as fair and reasonable and are adopted herein.
In order that the views reflected herein may be applied to the factual situation and thus assist the parties in determining the applicability of the Act to the various employees of the defendants who may be under the Act, the following observations may be made:
Office employees. Warehousing, storage, and intrastate shipments of merchandise thereafter, are not in interstate commerce, hence employees who keep inventories, records, payrolls, etc., are not engaged in interstate commerce. Drake v. Hirsch, D.C.Ga.1941, 40 F.Supp. 290; Swift & Co. v. Wilkerson, 5 Cir., 124 F.2d 176; Serio v. Dee Cigar & Candy Co., Inc., Ala. Cir.Ct.1941, 4 Lab.Cas. 60,734. See, also, Abadie v. Cudahy Packing Co. of Louisiana, D.C.La.1941, 37 F.Supp. 164. In regard to the status of these employees, it may be pointed out that there is maintained a perpetual inventory of Mutual's stock on hand by use of a machine system in keeping the books, records and writing up of orders. Any records, therefore, maintained and kept in the office are primarily in relation to the merchandise in the warehouse and to record the withdrawals and additions so as to reflect the merchandise on hand and to aid in determining whether requisition orders from the local stores may be filled. Generally speaking, these records do not concern any item of merchandise until the interstate character of any shipment has come to rest. Certain office employees may handle telephone calls which cross State lines and mail from out of the State, but, generally speaking, their work has reference to local business and the Act does not encompass such activities. Any other view would unduly expand our present concepts of interstate commerce as used in the Act.
Employees who order goods for shipment in interstate commerce. The following cases are authority for the holding that the ordering of goods from a State to be transported and introduced into another State is a part of interstate commerce and is within the Act. Eddings v. Southern Dairies, supra, Walling v. Goldblatt Bros., supra; Fleming v. Jacksonville Paper Co., supra; Fleming v. American Stores Co., supra. It seems reasonably clear that the services rendered by such employees concern the movements of merchandise in interstate commerce as fully as those who aid in its transportation and movement by physical handling.
Night watchmen and maintenance men. Plaintiff cites many cases holding that watchmen and maintenance men are covered by the Act. However, an examination of these authorities indicates that they primarily deal with situations wherein the employer was engaged in shipping merchandise in interstate commerce or producing goods for interstate commerce. In such cases, the courts bottom their conclusions upon the fact that such occupations were necessary to the production of goods for commerce. However, herein the goods in the warehouse are not in commerce. In the main, the services performed by these employees concern merchandise where the interstate commerce feature has ceased. It follows that they are not engaged in commerce under the Act. There is testimony, however, that Merchandise Terminal has at times shipped merchandise in interstate commerce. However, Merchandise Terminal has, except for the employees in the Cello department, only *951 one employee. Such employee, in so far as he unloads interstate shipments, or performs services in connection with the shipping out of merchandise in interstate shipments, is engaged in interstate commerce. While the testimony is somewhat indefinite as to the present remuneration received by such employee, it did appear at one time, at least, that such employee received less than $30 per week and performed more than 20% of his work in services similar to that performed by non-exempt employees. Under these circumstances, he would not be an executive, and hence in so far as his work pertains to interstate commerce, he would be subject to the Act.
Truck drivers. Since it has been determined that the intrastate distribution of merchandise which comes to Mutual's warehouse through the channels of interstate commerce is not "in commerce" within the meaning of the Fair Labor Standards Act, it follows that the drivers of the trucks hauling the merchandise in the intrastate distribution are not engaged "in commerce." This conclusion is further supported by the decision of the Interstate Commerce Commission in Ex Parte No. M.C.-3 (1941) 23 M.C.C. 1, where it stated:
"A merchant such as a wholesale grocer frequently has merchandise transported by rail from points in other states. This transportation is, of course, interstate in character. When the goods, however, are received by the wholesaler, the interstate transportation ordinarily is terminated if no destination beyond was definitely known and intended when the shipment was delivered to the rail carrier at the point of origin. Atlantic Coast Line R. Co. v. Standard Oil Co., 275 U.S. 257 [48 S.Ct. 107, 72 L. Ed. 270]. If later the merchant sells the goods and delivers them in his own trucks to points within the state, such transportation by motor vehicle, in our opinion, would be intrastate in character not subject to the Act. The motor vehicles employed in such transportation and the drivers thereof would not be subject to the regulations herein prescribed."
There is testimony here, however, that the truck drivers haul merchandise from the team tracks, the Fruit Auction Mart, and other warehouses. In as much as it has already been determined that at least some of the shipments received in this manner were intended for delivery to Mutual at the time they were shipped in interstate commerce, it follows that the drivers engaged in hauling such merchandise to Mutual's warehouse were then engaged in interstate commerce. The testimony as to whether any particular truck driver hauled an interstate shipment to Mutual's warehouse is very indefinite and inconclusive. It is apparent that some shipments were so hauled, although it probably constitutes a small portion of the merchandise received by Mutual.
Plaintiff asserts that, even though the truck drivers are engaged in interstate commerce, the exemption contained in Section 13(b) (1) of the Fair Labor Standards Act, 29 U.S.C.A. § 213(b) (1), is not applicable for two reasons: (1) That the finding of a "need" to regulate such drivers is a condition precedent to the existence of power in the Interstate Commerce Commission to regulate; and (2) that the Interstate Commerce Commission has held that it lacks the power to regulate such drivers. While plaintiff asserts that the Commission has not found a "need" to regulate drivers of private carriers engaged in interstate commerce, Wage and Hour Division Interpretative Bulletin #9, 4th Revision, March, 1942, p. 4, states:
"On May 1, 1940, it was held by Division No. 5 of the commission in a proceeding entitled `Ex Parte No. M.C.-3' that a need exists for the regulation by the commission of private motor carriers engaged in interstate or foreign commerce."
Not only has the Interstate Commerce Commission not disclaimed power over private motor carriers engaged in interstate commerce, but it has established regulations which became effective October 15, 1940. See, Interpretative Bulletin #9, Wage and Hour Division, 4th Revision, March, 1942, par. 5, page 4.
It seems clear, therefore, that in so far as the truck drivers are engaged in interstate commerce, they are exempt from the overtime provisions of the Act by virtue of Section 13(b) (1). However, as to records to be kept and the minimum wages to be paid, the Fair Labor Standards Act would apply. It may be pointed out that the Administrator in Interpretative Bulletin #9, in discussing this subject, stated:
"The Interstate Commerce Commission expressly declined to take jurisdiction over drivers employed by wholesalers operating wholly within a State, except as to those drivers engaged in activities subject to the Motor Carrier Act, such as transportation *952 to or from a rail head of goods in transit to or from another State."
Whether the transportation is from a rail head of goods in transit from another State, or from any other terminal where goods are still in commerce, would seem to be without any distinction in so far as the Act is concerned. In other words, applying the Administrator's own interpretation of the Act to truck drivers engaged in moving interstate shipments from railroad freight depots or any other type of terminal or stopping place, if the goods are still in interstate commerce and the destination is Mutual's warehouse, the transportation from such terminal to Mutual's warehouse would be services performed in the movement of goods in interstate commerce, and hence the truck drivers to that extent would be under the Motor Carrier Act, 49 U.S.C.A. § 301 et seq. Furthermore, in so far as it may aid Mutual in its responsibility of segregating the types of employment in which its employees may be engaged, the following interpretation of the Administrator found in the same bulletin, on page 6 thereof, may be referred to:
"It must be pointed out, however, that in any work week in which such driver (except in situations discussed in par. 5(c) of the Bulletin) engages in transportation subject to the jurisdiction which the Interstate Commerce Commission has asserted over such drivers, he will be considered as within the exemption provided by Section 13(b) (1) and thus not subject during the entire week to the maximum hour provisions of the Fair Labor Standards Act."
See, also, Note 11 under this interpretation.
Unloaders and Checkers. Wherever employees of either Mutual or Merchandise Terminal check in merchandise or are required to unload merchandise moving in interstate commerce, whether the same comes in railway cars, trucks or otherwise, such work is within the Act and the employees entitled to the benefit thereof. Likewise, the loaders of cars or trucks carrying merchandise and the checkers of such merchandise to be transported out of the State, are within the Act.
Scope of the Injunction. The evidence does not warrant the issuance of an injunction against Lawrence, Bailey Food, or C. Thomas Stores. Lawrence is engaged solely in field warehousing. It engages in no interstate activities whatsoever. Any employees on its payroll who may perform duties of the other defendants which involve commerce will be covered by the injunction to be issued herein against such defendant or defendants. It will be remembered that all of Lawrence's employees are paid by Mutual. Bailey Food's employees include only executives and administrative officers, and hence are not subject to the Act. C. Thomas Stores is a retail concern. Its business is primarily retail sales, and its office help are not engaged in commerce. Injunction will lie, however, together with the other relief prayed for herein, against Mutual Wholesale Food & Supply Company and Merchandise Terminal Warehouse, Inc. Costs are to be allowed in favor of plaintiff. An exception is reserved to plaintiff and the defendants Mutual and Merchandise Terminal.
Findings of fact and conclusions of law in harmony herewith, and the form of injunctive decree to be entered, may be submitted by the plaintiff upon five days' notice.
NOTES
[1] No opinion for publication.
[1] No opinion for publication. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555156/ | 46 F.Supp. 709 (1942)
SORRENTINO
v.
GLEN-GERY SHALE BRICK CORPORATION et al.
No. 2447.
District Court, E. D. Pennsylvania.
September 10, 1942.
*710 John Pemberton Jordan, of Philadelphia, Pa., for plaintiff.
Frederic L. Clark (of Shields, Clark, Brown & McCown), of Philadelphia, Pa., for defendants A. S. Squier and Fallston Co.
Herbert A. Speiser (of Speiser & Speiser), of Philadelphia, Pa., for defendant Anna Margolis et al.
Ernest Scott and Philip L. Leidy (of Pepper, Bodine, Stokes & Schoch), both of Philadelphia, Pa., and George A. Kershner (of Zieber & Snyder), of Reading, Pa., for defendant Glen-Gery Shale Brick Corporation and its officers.
BARD, District Judge.
This action was instituted by plaintiff against Glen-Gery Shale Brick Corporation, its officers, Fallston Brick Company, A. A. Squier, Philadelphia representative of these two firms, and a number of defendants trading as S. Margolis, for treble damages resulting from the alleged violation by these defendants of the Sherman and Clayton Acts, 15 U.S.C.A. § 1 et. seq. and 38 Stat. 730. All of the defendants have filed motions to dismiss the complaint.
The complaint alleges that plaintiff is engaged in the business of selling in interstate and intrastate commerce lumber, sand, cement and other building materials, and maintains his offices in Philadelphia. Defendants Glen-Gery and Fallston are brick manufacturers located in Pennsylvania and conducting an interstate business. Both firms are represented by the defendant Squier as their Philadelphia sales agent. The defendants Margolis are a competitor of the plaintiff, maintaining offices near those of the plaintiff in Philadelphia, and likewise sell building materials in interstate commerce.
In October, November and December of 1941 plaintiff placed orders with and received deliveries of brick from Glen-Gery. At that time he advised Glen-Gery and Squier that he had an established business requiring delivery of supplies to New Jersey and Delaware, and he was assured by them that Glen-Gery would make deliveries of any orders placed by him with it. In reliance upon such assurance plaintiff made extensive alterations in his office building and storage facilities and he purchased additional land, all of which entailed an expenditure of approximately $40,000. In January and February of 1942 plaintiff sought to purchase brick from Glen-Gery and from Fallston *711 and was advised by these firms and by Squier, their Philadelphia representative, that because of the threats of Margolis to withdraw its account if they continued to supply plaintiff and his customers with brick, they would not make any sales to plaintiff. These refusals continued and Glen-Gery and Fallston told plaintiff that Margolis was their exclusive dealer in the Philadelphia and nearby New Jersey area and that if plaintiff wanted to purchase brick manufactured by the defendants he would have to purchase it from Margolis.
Plaintiff's first contention is that the foregoing action of the defendants constitutes a violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1 and 2, which provide:
"§ 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. * * *."
"§ 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor * * *."
That plaintiff's complaint fails to set forth a violation of these sections of the Sherman Act is clear. The fundamental element to establish a violation of those sections of that act is the intent or effect of creating a monopoly or unduly restraining trade in a particular commodity, and thereby to affect adversely the public interest. The complaint contains no allegation that any or all of the defendants have such control over the supply of brick in the Philadelphia area that as a result of the refusal of the defendant manufacturers to sell brick directly to plaintiff, he is unable to purchase brick for his business. The sole charge is that defendant manufacturers refuse to sell directly to plaintiff and sell their products in the Philadelphia area exclusively to the defendants Margolis. This does not make out a violation of the Sherman Act. The Sherman Act does not deprive a manufacturer of the right to sell his own customers in the business in the absence of a showing that he has combined with others with the intent of affecting or destroying the right of freedom to trade. United States v. Colgate & Company, 250 U.S. 300, 39 S.Ct. 465, 63 L. Ed. 992, 7 A.L.R. 443; Great Atlantic & Pacific Tea Co. v. Cream of Wheat Co., 2 Cir., 227 F. 46. Said the Supreme Court in the Colgate case at page 307 of 250 U.S., at page 468 of 39 S.Ct., 63 L.Ed. 992, 7 A. L.R. 443: "The purpose of the Sherman Act is to prohibit monopolies, contracts and combinations which probably would unduly interfere with the free exercise of their rights by those engaged, or who wish to engage, in trade and commercein a word to preserve the right of freedom to trade. In the absence of any purpose to create or maintain a monopoly, the act does not restrict the long recognized right of trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal."
Plaintiff's second contention is that the actions of the defendants are in violation of the Robinson-Patman Amendment to the Clayton Act, 15 U.S.C.A. § 13, which makes it unlawful for a person engaged in interstate commerce "to discriminate in price between different purchasers of commodities of like grade and quality, * * * where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them." This section further provides that nothing contained therein "shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade."
Plaintiff's arguments that his past purchases from Glen-Gery make him a "purchaser" within the meaning of this section and that defendant manufacturers' refusal to sell him while selling to Margolis constitutes a "discrimination" between "purchasers" in violation thereof cannot be sustained. In Shaw's, Inc., v. Wilson-Jones Co., 105 F.2d 331, the Circuit Court of Appeals for this circuit construed this section flatly to the contrary. In that case the plaintiff was a dealer in supplies who had made purchases for three years from the defendant and who had planned to bid upon a contract to supply certain materials to the Registration Commission of Philadelphia. Defendant repeatedly promised to quote to the plaintiff prices at which it would supply certain materials required under *712 this contract, but subsequently refused to do so and quoted prices to a company competing with plaintiff and to that company only, which thereupon was successful in obtaining the contract. In upholding the action of the District Court in dismissing a complaint alleging violation of this section of the Clayton Act Judge Biggs said at page 333 of 105 F.2d:
"The appellant contends that the appellee has discriminated `in price' between different purchasers because the appellant refused to quote prices. The phrase `to discriminate in price', employed in Section 2 (a) considered by itself and entirely out of its context, might be deemed to include a refusal to offer a price to a customer upon goods which the latter desired to offer for resale. Such a conclusion is insupportable, however, after consideration of other language of the section. The discrimination in price referred to must be practiced `between different purchasers'. Therefore at least two purchases must have taken place. The term purchaser means simply one who purchases, a buyer, a vendee. It does not mean one who seeks to purchase, a person who goes into the market-place for the purpose of purchasing. In other words, it does not mean a prospective purchaser, or one who wishes to purchase, as the appellant contends.
"The appellant in its brief lays emphasis upon the fact that the appellee had sold supplies to it in the past and had promised to quote prices so that the appellant might bid upon Registration Commission contract. In short, the appellant contends that it was a customer of the appellee's and therefore a purchaser. Section 2 of the Act was designed, however, to prevent interference with the current of commerce. For the provisions of the Section to be operative, goods or commodities must be in the flow of commerce, or services must have been rendered or have been contracted to be rendered in connection with goods or commodities so placed. We may surmise that if the goods or commodities are not wholly within that flow, they at least must be touched by it, affected by it, so to speak. This we think to be the limitation imposed by Congress. Past purchases or conversations in respect to possible future purchases are insufficient."
Pursuant to a stipulation of all parties, the complaint was amended and it was agreed that the briefs and arguments on the motions to dismiss should be considered as if made to the amended complaint. In the amended complaint plaintiff sets forth that Glen-Gery is the maker of a particular type of brick identified as "Bartex"; that because of its superior qualities, design and color it is in great demand in the building industry, and that this "type brick" is required in the "major portion of building contracts"; that defendant Glen-Gery controls its sales and distribution; and that defendant Glen-Gery sells it to Margolis but refuses to sell it to the plaintiff with the purpose of lessening competition and creating a monopoly therein. It is alleged that this constitutes a violation of the Clayton Act as amended by the Robinson-Patman Amendment, to which the decision of the Circuit Court of Appeals in the Shaw case, supra, would seem to be a sufficient answer.
Inasmuch as plaintiff has failed to set forth in his complaint any violation of the Sherman or Clayton Acts, the defendants' motions to dismiss the complaint are granted. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555161/ | 46 F.Supp. 276 (1942)
SIGNAL GASOLINE CORPORATION
v.
UNITED STATES.
No. 46.
District Court, S. D. California, Central Division.
July 31, 1942.
Joseph D. Peeler and Melvin D. Wilson (of Miller, Chevalier, Peeler & Wilson), both of Los Angeles, Cal., for plaintiff.
William Fleet Palmer, U. S. Atty., Edward H. Mitchell, Asst. U. S. Atty., James L. Crawford, Asst. U. S. Atty.; Armond Monroe Jewell, former Asst. U. S. Atty., and Eugene Harpole, Sp. Atty., Bureau of Internal Revenue, all of Los Angeles, Cal., for defendant.
J. F. T. O'CONNOR, District Judge.
This is an action to recover interest allegedly overpaid, in the amounts of $3,421.67 and $2,184.71, on Federal Corporate Income Taxes for the years 1927 and 1928 respectively, pursuant to 26 U.S.C.A. § 3772; Int.Rev.Code, § 3772.
The cause was submitted without trial and in conformity with a stipulation of facts by and between the litigants with the approval of the court. The issues are predicated on the following undisputed facts:
Plaintiff herein is represented by and is maintaining this suit through its statutory trustees by reason of its dissolution on December 12, 1928, as a corporate entity, by order of court. Prior to that time, it had been duly organized and existing as a California Corporation since February 11, 1924. On April 11, 1928, the plaintiff filed a return and paid its Federal Corporate Income Tax for the year 1927 as required by law. The amount paid is not in controversy. On the November, 1930, assessment list, the Commissioner of Internal Revenue declared a jeopardy assessment for additional Federal Corporate Income Tax for the year 1927, in the amount of $81,979.71, together with interest in the amount of $13,211.08. Demand therefor was effected on December 1, 1930. On December 8, 1930, a deficiency letter was issued against the plaintiff advising it of the assessment.
Similarly, on May 14, 1928, the plaintiff filed its federal corporate income tax return for the period from January 1, 1928, to November 30, 1928. No tax was due thereon. Subsequently the Commissioner of Internal Revenue declared a jeopardy assessment on the March, 1931, assessment list for additional corporate income tax for the period above mentioned, i. e., from January 1, 1928, to November 30, 1928, in the amount of $84,225.13 together with interest thereon *277 in the amount of $9,990.49. Demand therefor was effected March 9, 1931. On March 30, 1931, a deficiency letter was issued against the plaintiff advising it of the assessment. From each of these jeopardy assessments, the plaintiff appealed to the Board of Tax Appeals and, as conditions precedent to such appeals, filed bonds in the amounts of $143,000 and $141,323.43 respectively, staying the collection of each of the jeopardy assessments, pending a review of the Commissioner's decision by the Board of Tax Appeals. On November 9, 1936, the Board of Tax Appeals entered orders sustaining the Commissioner's determination as follows: A deficiency of $59,573 representing the 1927 jeopardy assessment and a deficiency of $55,048.42 representing the jeopardy assessment for the period of January 1, 1928, to November 30, 1928. No specific finding of interest was entered on either account. Pursuant to the conclusions of the Board, the Commissioner, on January 11, 1937, issued notices and demands to the plaintiff for payment of tax, to-wit: $59,573 together with interest thereon at 6% per annum, from March 15, 1928, to December 1, 1930, in the amount of $9,600.23, which tax and interest were paid January 15, 1937; $55,048.42 together with interest thereon at 6% per annum, from March 15, 1929, to March 9, 1931, in the amount of $6,529.65, which tax and interest were paid January 15, 1937. On January 11, 1937, the Collector made a further demand upon the plaintiff for delinquency interest amounting to $25,361.67 representing interest at 6% per annum on $69,173.23 ($59,573.00 plus $9,600.23) from the date of the first notice and demand (December 1, 1930), to the date of the second notice (January 11, 1937). Said interest of $25,361.67 was paid January 15, 1937. The total amount of interest paid by the plaintiff to the Collector of Internal Revenue for the year 1927 was $34,961.90, which amount equals the sums of $25,361.67 and $9,600.23, supra; whereas simple interest at 6% per annum on the deficiency of $59,573.00 from March 15, 1928, to January 11, 1937 would amount to only $31,540.23. The interest demanded by the Commissioner and paid by the plaintiff to the Collector of Internal Revenue allegedly exceeded the legal rate of interest of 6% by $3,421.67, viz., the difference between $34,961.90 and $31,540.23.
On January 11, 1937, the Collector made a demand upon the plaintiff for delinquency interest of $21,496.90, computed at 6% per annum on $61,578.07 ($55,048.42 plus $6,529.65) from the date of the first notice and demand (March 9, 1931) to the date of the second notice and demand (January 11, 1937). The total amount of interest paid by the plaintiff to the Collector for the period from January 1, 1928, to November 30, 1928, was $28,026.55, which amount equals interest on the sums of $55,048.42 and $6,529.65, supra; whereas simple interest of 6% per annum on the deficiency of $55,048.42 for the period involved would amount to only $25,841.84. The interest demanded by the Commissioner and paid by plaintiff allegedly exceeded the legal rate of interest of 6% by $2,184.71, viz., the difference between $28,026.55 and $25,841.84. Collection of both items of interest ($3,421.67 and $2,184.71) is being contested as erroneous and illegal. Formalities of payment and claim for refund were duly followed by the plaintiff and on July 13, 1938, said claims for refund were rejected. The following questions are propounded for determination:
1. Whether plaintiff, being a corporation dissolved in 1928 under the California law as it existed prior to 1929, had at the commencement of this action or now has any capacity to sue under the facts.
2. The legality of exacting from plaintiff the items of interest in controversy. Solution of the problems presented will be considered in the order enumerated.
Rule 17 of the Federal Rules of Civil Procedure of this court, 28 U.S.C.A. following section 723c, provides: "The capacity of a corporation to sue or be sued shall be determined by the law under which it was organized. In all other cases capacity to sue or be sued shall be determined by the law of the state in which the district court is held; * * *." 2 Moore's Federal Practice, 2092, section 17.16. Elaboration upon the unequivocally expressed rule is unnecessary. Accordingly the laws of the State of California govern the plaintiff's capacity to sue. The generally accepted view of the status of a dissolved corporation is expressed in Crossman v. Vivienda Water Co., 150 Cal. 575, 89 P. 335. On page 580 of 150 Cal., on page 337 of 89 P., the court states that: "It is settled beyond question that, except as otherwise provided by statute, the effect of the dissolution of a corporation is to terminate its existence as a legal entity, and render it incapable of suing or being sued as a corporate body or in its corporate name. It is dead, and can no *278 more be proceeded against as an existing corporation than could a natural person after his death. There is no one who can appear or act for it, and all actions pending against it are abated, and any judgment attempted to be given against it is void. As to this, all the text writers agree, and their statement is supported by an overwhelming weight of authority," and authorities cited herein. The United States Supreme Court sustains this rule in Oklahoma Natural Gas Co. v. State of Oklahoma, 273 U.S. 257, 259, 47 S.Ct. 391, 392, 71 L.Ed. 634, wherein it said: "It is well settled that at common law and in the federal jurisdiction a corporation which has been dissolved is as if it did not exist, and the result of the dissolution cannot be distinguished from the death of a natural person in its effect. (Citing cases) It follows, therefore, that as the death of the natural person abates all pending litigation to which such a person is a party, dissolution of a corporation at common law abates all litigation in which the corporation is appearing either as plaintiff or defendant. To allow actions to continue would be to continue the existence of the corporation pro hac vice. But corporations exist for specific purposes, and only by legislative act, so that if the life of the corporation is to continue even only for litigating purposes it is necessary that there should be some statutory authority for the prolongation. The matter is really not procedural or controlled by the rules of the court in which the litigation pends. It concerns the fundamental law of the corporation enacted by the state which brought the corporation into being." However, in California this principle was modified, to the extent allowed by section 400 of the Civil Code of California, as amended by St.1921, p. 574, during the period in which the Signal Gasoline Corporation was dissolved in 1928. Section 400, Cal.Civ.Code, provided: "Unless other persons are appointed by the court, the directors or managers of the affairs of a corporation at the time of its dissolution are trustees of the creditors and stockholders or members of the corporation dissolved, and have full powers to settle the affairs of the corporation, collect and pay outstanding debts, sell the assets thereof in such manner as the court shall direct, * * *. Such trustees shall have authority to sue for and recover the debts and property of the corporation, and shall be jointly and severally personally liable to its creditors and stockholders * * *." Pursuant thereto, an allegation of the complaint (and the same is admitted by the answer herein) that "On December 12, 1928, plaintiff was dissolved by court order, and since then has been and now is acting through its statutory trustees." The caption of the complaint is also indicative of the complainant's status. In its brief the government intimates that: "We do not believe that the phrase in the title of the complaint describing the Signal Gasoline Corporation as `a dissolved corporation, acting through its statutory trustees,' or the fact that the complaint was verified by the statutory trustees, can give exception to the rule that the Signal Gasoline Corporation now has no power to sue in the corporate name. It would do violence to reason to construe the complaint herein as an action brought in the names of the statutory trustees and not in the name of the dissolved Signal Gasoline Corporation." A determination of this issue may be accomplished by an examination of the several cases pertinent to the subject. Buzard v. Helvering, 64 App.D.C. 268, 77 F.2d 391, 392, involved, inter alia, the question of whether an appeal taken by the trustees in the name of a dissolved California corporation constituted an appeal by said trustees with the effect of suspending the statute of limitations on proceedings against the trustees to collect tax deficiencies. One of the grounds assigned as error was "that Navarro Lumber Company was totally dissolved in 1922 and did not execute or file the appeal to the Board in 1925, on which the Commissioner relies for an extension of the periods of limitation for assessments against that company." Following a statement of the general rule from Crossman v. Vivienda, supra, the court in the Buzard case, supra, further quotes therefrom by saying that: "`There is no statute of this state that authorizes the commencement or continuance of an action against the corporation after its legal death. We have no statute similar to that of several states, providing that in the event of the dissolution of a corporation its existence shall be continued either indefinitely or for a specified time for the settlement of its affairs. Statutes similar to our section 400, Civ.Code, above quoted, do not have the effect of continuing the existence of the corporation as cestui que trust, or otherwise, so as to render it capable of defending actions in its corporate name. (citing authorities). If section 385, Code Civ.Proc., providing that an action does not abate by the *279 death or any disability of a party, if the cause of action survives, is applicable to the case of a corporation, it does not authorize the continuance of the action against the corporation itself, but allows the action to be continued only against the "representative or successor in interest," brought in on motion. McCulloch v. Norwood, 58 N.Y. 562, 568. See, also, Judson v. Love, 35 Cal. 463. There being no statute which can be held to modify the general rule, it would seem that the judgment in this case was as much of a nullity as if it had been given against a dead natural person, and that plaintiff's remedy, after the dissolution of this corporation was against the directors who continued such at the time of dissolution as trustees, and the stockholders. Sturges v. Vanderbilt, supra (73 N.Y. 384).'" In the principal case the petition for redetermination of the deficiencies was "`entitled, Appeal of Navarro Lumber Co.,'" but it was signed for the company by the three trustees, who, in the dissolution decree, were directed to wind up its affairs and distribute its assets. In taking the appeal, petitioners set out the authority on which they acted. They speak of themselves as the trustees of the lumber company "now in process of liquidation" and point to the statute of California for their authority to act. By reference to that statute (Civil Code, sec. 400, as amended by St.Cal.1921, c. 383, p. 574), we find that they have power to settle the affairs of the corporation, collect and pay outstanding debts, to sue and to be sued in relation to the debts and property of the corporation, and that they shall be jointly and severally liable to creditors to the extent of any property that shall come into their hands. It was in recognition of these duties and responsibilities that they filed the appeal. We think it cannot be urged that they were without authority, or the Board without jurisdiction. Indeed, we do not understand counsel to go that far, but rather, to insist that, because the appeal was taken in the name of the lumber company, and the trustees were not themselves substituted (after the passage of the 1926 act) formally by name in the place and stead of the corporation, the appeal was ineffective and the decision rendered thereon wholly void. Counsel say the three trustees compose "an indivisible fiduciary," a single taxpayer under present revenue acts, but that under the 1924 act in effect when the appeal was filed, the fiduciary entity which they composed could not invoke the jurisdiction of the Board of Tax Appeals by appealing from the Commissioner's notice. In the same breath they say the lumber company was dead and had no rights, so that the result of the situation when the appeal was taken was that there was nobody, natural or artificial, capable of contesting the Commissioner's determination, or availing of the provisions of law for a redetermination of the Commissioner's assessment. We have been cited no authority for this position, and we can find none; we should be slow to follow any which might point in that direction." That this contention was advanced by the plaintiff in Buzard v. Helvering, supra, and by the defendant here, cannot alter the rule nor the reason therefor. No substantial dissimilarity is perceivable between the two cases. In both instances, the caption on the pleadings was in the name of the dissolved corporation, with the exception that in the present case a designation of those through whom the Signal Gasoline Corporation is acting, is indicated, viz., its statutory trustees. With the same analogy the complaint "was signed for the company" by said trustees.
A brief comment on the authorities referred to in the government's brief in support of its position will expose their inapplicability. In Crossman v. Vivienda, cited above, the action was one in "debt commenced against a dissolved corporation and certain persons alleged to be stockholders. Summons was served on the president of the corporation; a demurrer was filed and overruled; and an answer was then filed by the stockholder defendants in which they denied liability on the part of the alleged corporation and also denied the existence of the corporation, alleging it had been voluntarily dissolved under the California statute. No pleading or answer was filed by the corporation, and a judgment against it was taken by default. On appeal, the judgment was set aside by the Supreme Court of California on the ground that it had been entered by the clerk without an order of court. Thereupon the plaintiff dismissed the action as to the individual defendants, and an order was made by the trial court appointing a referee to take an accounting between plaintiff and the corporation. On the basis of the referee's report, judgment was entered in favor of plaintiff against the corporation. Subsequently a proceeding was begun against the stockholders individually, alleging the recovery of the judgment against the corporation and its bankruptcy. The stockholders *280 appeared and moved to set aside the judgment upon the ground that the court had no jurisdiction to enter the same for the reason that prior to the institution of the suit the corporation had been dissolved and had ceased to exist." This motion prevailed, predicated upon the general rule enunciated therein. A further examination of the Crossman case reveals that all of the proceedings therein "were had without the participation of any one purporting to represent the corporation, and without any notice to anyone." Brandon v. Umpqua Lumber, etc., Co., 166 Cal. 322, 136 P. 62, 63, involved a motion to dismiss an appeal from an action to quiet title to certain parcels of land against the defendant, a dissolved corporation. Denial of the motion was based solely upon the provisions of the Corporation License Act of 1906, sec. 10a, as amended in 1907, Stats.1907, p. 745. The court quoting from the case of Lowe v. Superior Court, 165 Cal. 708, 134 P. 190, states that: "`We are of the opinion that section 10a of the act, as amended by the addition of the proviso, should be construed as providing that any action included within the meaning of the proviso shall not abate by reason of the forfeiture but may be continued and prosecuted in its corporate name to final judgment, the control and management of the action so far as the corporate interests are concerned being in the directors or managers in office at the time of the forfeiture; they being the trustees of the corporation and stockholders or members. While doubtless they may be properly substituted as parties defendant, such substitution is not essential to a continuance of the action, as we read the statute.'" As will be noted, the statute was the controlling factor. Although this court is bound by the decisions of the Ninth Circuit Court of Appeals, the case of Signal Oil & Gas Company v. United States, 125 F.2d 476, is not applicable. The Ninth Circuit Court rejected the defendant's contention "that certain assessments made in the name of the Signal Gasoline Corporation after its dissolution were, under the above referred to California law, void", principally because of statutory provisions cited therein. "The California rule that corporations which were dissolved prior to 1929 could not sue or be sued in their corporate capacity," was not questioned simply because the issues of the case did not require its application. The ruling in G. M. Standifer Construction Corp. v. Commissioner, 9 Cir., 78 F.2d 285, 286, is not inconsistent with the views of this court. There the plaintiff's petition was dismissed in accordance with the common law rule observed in the preceding cases. The Oregon statute, Code 1930, § 25-221, under which petitioner attempted to maintain the action, provided a period of five years, after dissolution of a corporate entity, in which to exist as a corporate body "for the purpose of prosecuting or defending any actions, suits * * * by or against them, settling their business * * * but not for the purpose of continuing * * * business. * * *" A certificate of dissolution was obtained on August 30, 1927. This appeal was to review a decision of the Board of Tax Appeals which was rendered on June 7, 1934, after the expiration of the five year period. Judge Mathews, speaking for the court, declared: "The Oregon statute * * * does not provide for the continuance of suits pending by or against a dissolved corporation at the expiration of the 5-year extension of its corporate life, and the Supreme Court of Oregon, in construing this statute, has held that pending suits commenced within that period abate upon the expiration thereof. * * * Here, the 5-year period expired, the corporation became defunct, and the proceeding before the Board of Tax Appeals abated on August 30, 1932, 21 months before the Board rendered its decision. The petition filed in this court in the name of the defunct corporation presents nothing for review. The only thing we can do with such a petition is to dismiss it." No such circumscription was imposed by section 400 of the California Civil Code. The court is, therefore, of the opinion that this action was properly maintained by the trustees of the Signal Gasoline Corporation.
The absence of precise judicial precedent upon which this court can rely for guidance in determining the second question presented, renders it of primary importance. Consequently, statutory construction must finally dispose of the controversy. Inasmuch as the language of the 1926 and 1928 provisions of the Revenue Act is substantially the same, the pertinent sections of the Revenue Act of 1928 only will be referred to. The income tax statute authorizing jeopardy assessments without hearing unless the taxpayer gives bond has been held constitutional. Continental Products Co. v. Commissioner of Internal Revenue, 1 Cir., 1933, 66 F.2d 434, affirming 20 B.T.A. 818. Tit. 26 U.S.C.A. Int.Rev.Code, § 273 (f), provided that the stay of collection of the *281 amount assessed, by filing bond was "conditioned upon the payment of so much of the amount, the collection of which is stayed by the bond * * * together with interest thereon as provided in section 297." The basic problem then is the determination of the amount stayed by filing of the bond. Sec. 273 (a) provides: "If the Commissioner believes that the assessment or collection of a deficiency will be jeopardized by delay, he shall immediately assess such deficiency (together with all interest, * * *) and notice and demand shall be made by the collector for the payment thereof." Although the deficiency upon which the jeopardy assessment, as originally declared, was erroneous, yet the amount involved became ascertainable by a subsequent decision of the Board. The deficiencies, so determined, were referable to the jeopardy assessments of 1930 and 1931. Thus, section 273 (a) became operative, and pursuant thereto interest at the rate of 6% per annum was added to and became a part of the amounts stayed by the bond filed according to section 273 (f) (viz., $69,173.23 and $61,578.07 respectively). The plaintiff's contention that the Board lacks jurisdiction to consider and did not enter a finding of interest is untenable. Assessment of interest was authorized by section 273 (a). Erroneous computation of the original tax deficiencies did not vary the effect of the amounts which should have been stayed. This was merely a matter of mathematical calculation. Section 273 (i) states: "When the petition has been filed with the Board and when the amount which should have been assessed has been determined by a decision of the Board which has become final, then any unpaid portion, the collection of which has been stayed by the bond, shall be collected as part of the tax upon notice and demand from the collector, * * *." Accordingly, subsequent to a final decision of the Board, together with notice and demand for payment, the collector was entitled to "any unpaid portion, the collection of which has been stayed by the bond * * *." Section 297, 26 U.S.C.A. Int. Rev.Code, with the interpretation of which this litigation is primarily concerned, becomes the final deciding factor. It declares: "In the case of the amount collected under section 273 (i), there shall be collected at the same time as such amount, and as a part of the tax, interest at the rate of 6 per centum per annum upon such amount from the date of the jeopardy notice and demand to the date of notice and demand under section 273 (i) * * *." Incorporation by reference of one section to another renders a comprehension thereof less confusing when viewed as a unity. Under the present facts, together with $69,173.23 and $61,578.07, collectible under 273 (i), as heretofore indicated, "there shall be collected at the same time as such amount, and as a part of the tax, interest at the rate of 6 per centum per annum upon such amount from the date of the jeopardy notice and demand * * *," which notice and demand were given November, 1930, and March, 1931, respectively. Therefore, the conclusion that the interest herein concerned was legal, is unavoidable.
Judgment for the defendant. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453478/ | 257 P.3d 662 (2011)
171 Wash.2d 1021
NEWNOM
v.
PIERCE COUNTY.
No. 85756-3.
Supreme Court of Washington, Department I.
July 12, 2011.
Disposition of Petition for Review Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555175/ | 36 So.3d 100 (2010)
PREISEL
v.
LINDSAY.
No. 2D09-2273.
District Court of Appeal of Florida, Second District.
June 23, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2398606/ | 705 S.E.2d 782 (2011)
The NORTH CAROLINA STATE BAR, Plaintiff,
v.
Brent E. WOOD, Attorney, Defendant.
No. COA10-463.
Court of Appeals of North Carolina.
February 1, 2011.
*783 The North Carolina State Bar, Raleigh, by Counsel Katherine Jean and Deputy Counsel David R. Johnson, for plaintiff-appellee.
Brent E. Wood, Cary, pro se defendant-appellant.
STEELMAN, Judge.
Where the Disciplinary Hearing Commission of the North Carolina State Bar was only required to find defendant was convicted of a criminal offense in order to impose discipline, the Disciplinary Hearing Commission did not err in imposing discipline on defendant prior to entry of a judgment of conviction. Defendant did not seek review of the 6 August 2007 order conditionally vacating his disbarment; therefore, any arguments relating to that order were not timely made and will not be considered. Where the original order of discipline was based upon a default, the allegations contained in the original complaint are deemed admitted, and defendant was not entitled to a new hearing when his disbarment was reinstated.
*784 I. Factual and Procedural History
On 11 May 2006, Brent E. Wood ("defendant") was convicted in the United States District Court for the Eastern District of North Carolina of one count of conspiracy to commit mail fraud and wire fraud, six counts of mail fraud, and one count of conspiracy to commit money laundering. On 20 May 2006, the North Carolina State Bar ("Bar") filed a complaint against defendant before its Disciplinary Hearing Commission ("DHC") requesting that disciplinary action be taken against defendant for violations of N.C. Gen. Stat. § 84-28(b)(1) (2006) and Revised Rules of Professional Conduct 8.4(b) and (c). The Bar alleged that "[t]he offenses of which Wood was convicted [were] criminal acts showing professional unfitness in violation of N.C. Gen.Stat. 84-28(b)(1)" and "constitute[d] criminal conduct that reflects adversely upon his honesty, trustworthiness or fitness as a lawyer in violation of Revised Rule 8.4(b) and conduct involving dishonesty, fraud, deceit or misrepresentation in violation of Revised Rule 8.4(c)." An amended complaint was filed by the Bar on 18 July 2006. Defendant failed to answer the Bar's complaint, and default was entered against defendant on 20 September 2006. Defendant was disbarred in an order of discipline dated 27 October 2006. The order of disbarment was based upon both his criminal convictions and conduct involving dishonesty, fraud, deceit or misrepresentation under Revised Rule 8.4(c).
Following the return of the verdict, defendant moved the United States District Court for a judgment of acquittal, or alternatively for a new trial. On 20 July 2007, the Honorable Terrence W. Boyle entered an order granting defendant's motion for judgment of acquittal and conditionally granting defendant's motion for new trial should the judgment of acquittal be reversed or vacated. On 6 August 2007, based upon this order, the DHC vacated defendant's disbarment upon the express proviso that if defendant's conviction was reinstated by an appellate court, his disbarment would be reinstated. This order also provided that the Bar was not precluded from conducting a disciplinary proceeding based upon the underlying facts as provided in N.C. Gen.Stat. § 84-28(d). On 14 August 2009, the United States Court of Appeals for the Fourth Circuit reversed the district court's judgment of acquittal and conditional grant of a new trial, and remanded the matter to the district court for further proceedings consistent with its opinion. Based upon the Court of Appeals' reversal, on 10 December 2009 the DHC reinstated the 27 October 2006 order of disbarment.
Defendant appeals.
II. Judgment of Conviction
In his first argument, defendant contends that the DHC erred in disbarring defendant in 2006 and reinstating this disbarment in 2009 based solely upon his conviction of criminal offenses when no judgment of conviction has been entered against him. We disagree.
Defendant's argument conflates a conviction and a judgment of conviction. In defendant's brief he states that "federal law ... requires both a jury verdict and sentencing before a defendant is convicted." However, Black's Law Dictionary defines "conviction" as "1. The act or process of judicially finding someone guilty of a crime; the state of having been proved guilty. 2. The judgment (as by a jury verdict) that a person is guilty of a crime." 358 (8th ed.2004). "Judgment of conviction" is defined as "1. The written record of a criminal judgment, consisting of the plea, the verdict or findings, the adjudication, and the sentence. Fed.R.Crim.P. 32(d)(1). 2. A sentence in a criminal case." Black's Law Dictionary 860 (8th ed.2004). A judgment of conviction is one step beyond conviction. A judgment of conviction involves not only conviction but also the imposition of a sentence. This distinction has been recognized in both North Carolina statutes and case law. N.C. Gen.Stat. § 15A-1331(b) (2009) states "[f]or the purpose of imposing sentence, a person has been convicted when he has been adjudged guilty or has entered a plea of guilty or no contest." This Court has "interpreted N.C. Gen.Stat. § 15A-1331(b) to mean that formal entry of judgment is not required in order to have a conviction." State v. Hatcher, 136 N.C.App. 524, 527, 524 S.E.2d 815, 817 (2000), citing State v. Fuller, 48 N.C.App. *785 418, 268 S.E.2d 879, disc. review denied, 301 N.C. 403, 273 S.E.2d 448 (1980).
Defendant correctly notes that no judgment of conviction has been entered against him for his federal criminal convictions; however, a judgment of conviction is not necessary in order for the DHC to impose discipline. The DHC in its original order disbarred defendant based upon his violations of N.C. Gen.Stat. § 84-28(b)(1) and (2) (2006), which read as follows:
(b) The following acts or omissions by a member of the North Carolina State Bar or any attorney admitted for limited practice under G.S. 84-4.1, individually or in concert with any other person or persons, shall constitute misconduct and shall be grounds for discipline whether the act or omission occurred in the course of an attorney-client relationship or otherwise:
(1) Conviction of, or a tender and acceptance of a plea of guilty or no contest to, a criminal offense showing professional unfitness;
(2) The violation of the Rules of Professional Conduct adopted and promulgated by the Council in effect at the time of the act.
(emphasis added). The plain language of this statute requires that an attorney be "convicted of ... a criminal offense showing professional unfitness," not that a judgment of conviction be entered.
Defendant argues that under Federal Rule of Criminal Procedure 32(k) he has not been convicted of any crimes, since no judgment has been imposed by the district court. He further contends that it was improper to disbar him in the absence of a judgment. Federal Rule of Criminal Procedure 32(k)(1) states:
In General. In the judgment of conviction, the court must set forth the plea, the jury verdict or the court's findings, the adjudication, and the sentence. If the defendant is found not guilty or is otherwise entitled to be discharged, the court must so order. The judge must sign the judgment, and the clerk must enter it.
This Rule refers to a judgment of conviction, not a conviction. Under the statutes and rules applicable to the entry of an order of discipline, all that is required is a conviction, not a judgment of conviction.
Defendant further contends that the instant case is analogous to the New York Court of Appeals case of In re Delany, that held a final order of sanction against an attorney was prematurely imposed because the attorney had pled guilty to several federal crimes but had not yet been sentenced. 87 N.Y.2d 508, 640 N.Y.S.2d 469, 663 N.E.2d 625 (1996). However, the applicable New York law stated that "upon a judgment of conviction against an attorney becoming final the appellate division of the supreme court shall order the attorney to show cause why a final order of suspension, censure or removal from office should not be made." Id., 640 N.Y.S.2d 469, 663 N.E.2d at 626. The requirements of the New York law differ from the applicable North Carolina statutes and rules, requiring a judgment of conviction rather than a conviction. We hold that the DHC properly entered an order of discipline against defendant based upon his convictions.
This argument is without merit.
III. 2007 Order Vacating Order of Disbarment
In his second argument, defendant contends the DHC erred in only granting a conditional reinstatement of Wood's right to practice law rather than vacating the original order of disbarment. We disagree.
On 6 August 2007, the DHC ordered that the 27 October 2006 order of discipline entered against defendant be vacated; "provided, however, that should Defendant's conviction be reinstated by an appellate court, the Order of Discipline dated October 27, 2006 in this matter shall be reinstated." The order vacating the order of disbarment was entered pursuant to N.C. Gen.Stat. § 84-28(d) (2007) which provides in relevant part:
An order of discipline based solely upon a conviction of a criminal offense showing professional unfitness shall be vacated immediately upon receipt by the Secretary of the North Carolina State Bar of a certified copy of a judgment or order reversing the conviction. The fact that the attorney's criminal conviction has been overturned on *786 appeal shall not prevent the North Carolina State Bar from conducting a disciplinary proceeding against the attorney based upon the same underlying facts or events that were the subject of the criminal proceeding.
Defendant argues that under N.C. Gen.Stat. § 84-28(d) the Bar was required to vacate his disbarment unconditionally, and was without authority to provide that the disbarment would be reinstated if his convictions were reinstated by an appellate court.
We first note that defendant did not appeal the reinstatement order of 6 August 2007. N.C. Gen.Stat. § 84-28(h) (2007) provides in part that:
There shall be an appeal of right by either party from any final order of the Disciplinary Hearing Commission to the North Carolina Court of Appeals. Review by the appellate division shall be upon matters of law or legal inference. The procedures governing any appeal shall be as provided by statute or court rule for appeals in civil cases.
Rule 3(c)(1) of the North Carolina Rules of Appellate Procedure requires that a party must give notice of appeal within thirty days of entry of judgment. In this case, defendant did not appeal the 6 August 2007 order vacating his disbarment. The only question is whether that order was a "final order" as contemplated by N.C. Gen.Stat. § 84-28(h). We hold that it was a final order. Even though the order contained a provision dealing with the possibility that the disbarment could be reinstated, any future action was dependent upon a decision of the federal court, and not upon a further decision or action by the DHC. The Rules and Regulations of the North Carolina State Bar clearly contemplate the DHC imposing conditions on a lawyer's reinstatement. Section B.0125(d) of the Rules states "[t]he hearing committee may impose reasonable conditions on a lawyer's reinstatement from disbarment, suspension or disability inactive status in any case in which the hearing committee concludes that such conditions are necessary for the protection of the public." Annotated Rules of North Carolina 522 (2007). Defendant failed to timely appeal the 6 August 2007 order of the DHC, and this order is not properly before this Court.
Further, we hold that the DHC had the inherent authority to place the condition upon the vacation of its order of disbarment based upon future actions of an appellate court. The Bar has no control over either the criminal trial or appellate process in the state or federal court, and acted appropriately in issuing an order of reinstatement conditioned upon the result of future action in the federal court.
IV. Reinstatement of Disbarment without Hearing
In his third argument, defendant contends the DHC erred by reinstating defendant's disbarment without conducting a hearing in violation of defendant's due process rights and the North Carolina Administrative Code. We disagree.
When default is entered due to defendant's failure to answer, the substantive allegations raised by plaintiff's complaint are no longer in issue, and for the purposes of entry of default and default judgment are deemed admitted. However, following entry of default in favor of plaintiff, defendant is entitled to a hearing where he may move to vacate such entry.
Bell v. Martin, 299 N.C. 715, 721, 264 S.E.2d 101, 105 (1980) (citation omitted). Defendant never moved to vacate the 20 September 2006 entry of default against him and never appealed the 27 October 2006 order of discipline based thereon. Defendant cannot now challenge the findings of fact and conclusions of law contained in those orders. "Failure to attack the judgment at the trial court level precludes such an attack on appeal." University of N. Carolina v. Shoemate, 113 N.C.App. 205, 216, 437 S.E.2d 892, 898 (1994) (citation omitted).
The findings of fact and conclusions of law supporting the defendant's disbarment had been affirmatively established by the prior unchallenged entry of default and order of discipline entered against defendant. Defendant was not entitled to a hearing, because all of the facts supporting the reinstatement of defendant's disbarment had been affirmatively *787 established in the prior proceedings against defendant. See Martin, 299 N.C. at 721, 264 S.E.2d at 105.
AFFIRMED.
Judges STEPHENS and ROBERT N. HUNTER, Jr., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2406884/ | 385 S.W.2d 258 (1964)
Charlie Bradford GIBBS, Appellant,
v.
The STATE of Texas, Appellee.
No. 37360.
Court of Criminal Appeals of Texas.
December 2, 1964.
Rehearing Denied January 13, 1965.
*259 No attorney of record on appeal.
Henry Wade, Dist. Atty., A. D. Jim Bowie, Howard Weinberger, Louis Francis and C. M. Turlington, Asst. Dist. Attys., Dallas, and Leon B. Douglas, State's Atty., Austin, for the State.
MORRISON, Judge.
The offense is driving while intoxicated; the punishment, 90 days in jail and a fine of $100.00.
Officers John W. Thames and Winnon A. Smith of the Dallas Police Department observed a pickup truck being driven at a high rate of speed upon a public highway in Dallas County, Texas, at approximately 10:25 p. m. The speed limit on the public highway was 50 miles per hour. After a chase of about 12 to 14 blocks the officers caught up with appellant at a red light, where his vehicle was stopped. Both officers expressed the opinion that appellant was drunk. They based such opinion on the facts that he smelled of intoxicants, that he staggered, talked with a thick tongue, that his eyes were watery and glassy and that his complexion was flushed.
Testifying in his own behalf, appellant denied that he was intoxicated. Appellant called his wife and his daughter who testified that he was sober earlier in the day and sounded sober over the telephone when calling from the jail after his arrest.
The jury resolved the issue against appellant, and we find the evidence sufficient to sustain the conviction.
Appellant filed no brief in this case, but Bill of Exception #1 contained in the record recites that the trial court erred in sustaining the State's motion to instruct appellant's attorney not to inquire of one of the officers testifying in this case "as to events surrounding his termination of employment with the Dallas Police Department due to a charge of driving while intoxicated." The bill recites that an examination of said witness was material and pertinent to his testimony as an expert on intoxication.
We find no error in the court's granting such motion. Under the provisions of Article 732a, Vernon's Ann.C.C.P., the fact that a witness has been charged with an offense is inadmissible for the purpose of impeaching him unless the charge has resulted in a final conviction. Though not controlling, it is noted that the bill reflects that appellant made no effort to prove that the officer had actually been convicted of such offense. Tomlinson v. State, 163 Tex. Crim. 44, 289 S.W.2d 267. Furthermore, the conviction must be for a *260 felony offense or one involving moral turpitude. Neill v. State, 158 Tex. Crim. 551, 258 S.W.2d 328 and Mauldin v. State, 165 Tex. Crim. 405, 308 S.W.2d 36.
Drunkenness is not an offense involving moral turpitude. Powell v. State, 60 Tex. Crim. 201, 131 S.W. 590, and Garrison v. State, 94 Tex. Crim. 541, 252 S.W. 511. Also drunken driving is not an offense involving moral turpitude. Burton v. State, 149 Tex. Crim. 327, 194 S.W.2d 398.
Finding no reversible error, the judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555278/ | 36 So.3d 680 (2010)
P.C.
v.
STATE.
No. 3D09-2239.
District Court of Appeal of Florida, Third District.
May 12, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555296/ | 775 F.Supp. 151 (1991)
NATIONAL-STANDARD COMPANY, Plaintiff,
v.
CLIFTON AVENUE CORP. and Hartz Mountain Industries, Inc., Defendants.
Civ. A. No. 90-2686.
United States District Court, D. New Jersey.
August 2, 1991.
*152 Jan Alan Brody, Carella, Byrne, Bain, Gilfillan, Cecchi & Stewart, Roseland, N.J., for plaintiff.
Justin P. Walder, John A. Brogan, Jeffrey A. Walder, Walder, Sondak, Berkeley & Brogan, Roseland, N.J., for defendants.
OPINION
LECHNER, District Judge.
This is an action brought by National-Standard Company ("National-Standard") against Clifton Avenue Corp. ("Clifton") and Hartz Mountain Industries, Inc. ("Hartz") (collectively, "Defendants") to enforce a real estate purchase contract. Jurisdiction is alleged pursuant to 28 U.S.C. § 1332 and appears to be appropriate.
Currently before the court is the motion of Defendants for summary judgment pursuant to Fed.R.Civ.P. 56.[1] For the reasons *153 which follow, summary judgment is granted in favor of Defendants.
FACTS
National-Standard is a corporation organized under the laws of the State of Delaware and maintains its principal place of business in Michigan. Clifton is a corporation organized under the laws of and maintains its principal place of business in the State of New Jersey. Hartz is a corporation organized under the laws of the State of New York and maintains its principal place of business in New Jersey.
On 2 August 1987, National-Standard and Clifton entered into a real estate purchase contract (the "Contract"). The Contract provided National-Standard agreed to sell to Clifton approximately thirty-five acres of real property (the "Property") located in Clifton, New Jersey. The purchase price of the Property was $10 million. A portion of the Property was used as landfill for wastes generated by National-Standard's commercial activities on the Property.
The Contract stated Clifton was a wholly-owned subsidiary of Hartz. Contract, art. XXIV. The Contract provided Hartz would pay National-Standard liquidated damages in the amount of $3 million in the event Clifton wilfully defaulted on its obligations under the Contract. Id.
On 11 July 1990, National-Standard filed its complaint (the "Complaint") bringing suit against Defendants. National-Standard brought suit to enforce the Contract on the grounds Defendants repudiated and anticipatorily breached the Contract. National-Standard alleges Defendants expressed an unwillingness to perform under the Contract because Defendants deemed the clean-up of the portion of the Property used as landfill to be unacceptable. Complaint, ¶ 15.
The amended answer and counterclaim (the "Def. Answer") was filed 4 March 1991. Defendants denied National-Standard's allegations and asserted numerous affirmative defenses and counterclaims. Of particular relevance to this opinion are the fourteenth affirmative defense and the fifth counterclaim.
In the fourteenth affirmative defense, Defendants assert the Complaint should be dismissed because National-Standard "failed to meet its statutory obligation under N.J.S.A. 13:1E-116 of disclosing in the Contract the prior utilization of the Property as a sanitary landfill." Def. Answer at 6. In the fifth counterclaim, Defendants seek recision of the Contract in part on the ground "National-Standard knew that the [Property] contained a sanitary landfill but failed to disclose same to [Clifton]. N.J.S.A. 13:1E-116 specifically requires a disclosure of the existence of a sanitary landfill in a contract for the sale of property containing such a landfill." Id. at 14.
National-Standard's answer to amended counterclaims (the "Plntf. Answer") was filed 26 March 1991. National-Standard asserted several affirmative defenses to the counterclaims, including laches, anticipatory breach, waiver, equitable and promissory estoppel and unclean hands. Plntf. Answer at 7.
DISCUSSION
A. Summary Judgment Standard of Review
To prevail on a motion for summary judgment, the moving party must establish "there is no genuine issue as to any material fact and that [it] is entitled to *154 judgment as a matter of law." Fed. R.Civ.P. 56(c). The present task is to determine whether disputed issues of fact exist, but a district court may not resolve factual disputes in a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); see Nathanson v. Medical College, 926 F.2d 1368, 1380 (3d Cir.1991) (Summary judgment may not be granted "if there is a disagreement over what inferences can be reasonably drawn from the facts even if the facts are undisputed."). All evidence submitted must be viewed in a light most favorable to the party opposing the motion. Boyle v. Governor's Veterans Outreach & Assistance Center, 925 F.2d 71, 75 (3d Cir.1991); Weldon v. Kraft, Inc., 896 F.2d 793, 797 (3d Cir.1990); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986); Todaro v. Bowman, 872 F.2d 43, 46 (3d Cir.1989); Joseph v. Hess Oil, 867 F.2d 179, 182 (3d Cir.1989). "`Any "unexplained gaps" in material submitted by the moving party, if pertinent to material issues of fact, justify denial of a motion for summary judgment.'" Ingersoll-Rand Fin. Corp. v. Anderson, 921 F.2d 497, 502 (3d Cir.1990) (quoting O'Donnell v. United States, 891 F.2d 1079, 1082 (3d Cir.1989)).
Although the summary judgment hurdle is a difficult one to overcome, it is by no means insurmountable. As the Supreme Court has stated, once the party seeking summary judgment has pointed out to the court the absence of a genuine issue of material fact,
its opponent must do more than simply show that there is some metaphysical doubt as to the material facts.... In the language of the Rule, the non-moving party must come forward with `specific facts showing that there is a genuine issue for trial.' ... Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no `genuine issue for trial.'
Matsushita, 475 U.S. at 586-87, 106 S.Ct. at 1356 (emphasis in original, citations and footnotes omitted). In other words, the inquiry involves determining "`whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Brown v. Grabowski, 922 F.2d 1097, 1111 (3d Cir. 1990) (quoting Anderson v. Liberty Lobby, 477 U.S. at 251-52, 106 S.Ct. at 2511-12), cert. denied sub nom., ___ U.S. ___, 111 S.Ct. 2827, 115 L.Ed.2d 997 (1991).
The Supreme Court elaborated on the summary judgment standard in Anderson v. Liberty Lobby: "If the evidence [submitted by a party opposing summary judgment] is merely colorable ... or is not significantly probative ... summary judgment may be granted." 477 U.S. at 249-50, 106 S.Ct. at 2511 (citations omitted). The Supreme Court went on to note in Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986): "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and we think it should be interpreted in a way that allows it to accomplish this purpose." Id. at 323-24, 106 S.Ct. at 2553 (footnote omitted).
Once a case has been made in support of summary judgment, the party opposing the motion has the affirmative burden of coming forward with specific facts evidencing a need for trial. see Fed. R.Civ.P. 56(e); see also Maguire v. Hughes Aircraft Corp., 912 F.2d 67, 72 (3d Cir. 1990) (non-moving party may not rest upon mere allegations); Schoch v. First Fidelity Bancorporation, 912 F.2d 654, 657 (3d Cir. 1990) (neither unsupported allegations in pleadings and memoranda of law nor conclusory allegations in affidavits will establish genuine issue of material fact); Hozier v. Midwest Fasteners, Inc., 908 F.2d 1155, 1165 (3d Cir.1990) (cannot create issue of fact merely by questioning credibility of movant's witnesses; circumstantial evidence may raise issue of fact); Aronow Roofing Co. v. Gilbane Building Co., 902 F.2d 1127, 1128 (3d Cir.1990) ("summary judgment will be granted where the non-moving party fails to `establish the existence' of an element essential to the case"); *155 Carlson v. Arnot-Ogden Memorial Hosp., 918 F.2d 411, 413 (3d Cir.1990) ("nonmoving party must adduce more than a mere scintilla of evidence in its favor").
B. Contractual Disclosure of Landfill Facilities
Defendants seek recision of the Contract on the ground the Contract failed to disclose under N.J.S.A. 13:1E-116 that part of the Property was used as a sanitary landfill. Section 13:1E-116 is part of the Sanitary Landfill Facility Closure and Contingency Fund Act (the "Closure Act"), N.J.S.A. 13:1E-100 et seq. Section 13:1E-116 provides, in pertinent part:
a. No person shall contract to sell any land which has been utilized as a sanitary landfill facility at any time prior to the effective date of this supplementary act unless the contract of sale for the land shall state the fact and the period of time that the land was so utilized.
. . . . .
b. Any contract made in violation of this section is voidable.
N.J.S.A. 13:1E-116 (emphasis added). National-Standard "concedes for summary judgment purposes that it operated a sole source landfill as the depository for waste generated by its on-site commercial operation on the real property which is the subject matter of the instant action and that the real estate purchase contract does not include the required statutory language." Plntf. Supp. Brief at 2. Accordingly, the only issue which needs to be considered is whether a "sole source landfill" such as the one National-Standard concedes it operated on the Property constitutes a "sanitary landfill facility." This question was addressed in Johnson Machinery Co. v. Manville Sales Corp., 248 N.J.Super. 285, 590 A.2d 1206 (App.Div.1991).
1. Johnson Machinery Co. v. Manville Sales Corp.
The Johnson Machinery court was faced with the same question raised by Defendants: Whether the definition of a solid waste facility, which includes sanitary landfills, encompasses a noncommercial sole source landfill. 248 N.J.Super. at 297, 590 A.2d 1206. A noncommercial sole source landfill is a landfill which accepts only solid waste from a source on the site of the landfill and not from any other commercial sources. Id.
In Johnson Machinery, the purchaser of real property brought an action to void the purchase agreement in part on the ground the agreement did not contain a statement pursuant to N.J.S.A. 13:1E-116 that the property had been used as a sanitary landfill. 248 N.J.Super. at 288-89. The purchaser moved for summary judgment. The trial court denied the purchaser's motion in part on the ground section 13:1E-116 did not apply to a noncommercial sole source landfill. Id.
The purchaser appealed. The Appellate Division of the Superior Court of New Jersey (the "Appellate Division") reversed, stating:
We hold that the term "sanitary landfill facility" in the Closure Act includes a sole source landfill which operates only as the depository of the waste its own commercial operation has generated. We also hold that the Closure Act means exactly what it says: [W]here sale property has been used as a sanitary landfill facility, the seller must include in the contract of sale a statement that the property has been so used and for what period of time. Failure to include this information will result in the contract being void at the sole discretion of the buyer. No equitable defenses to the voiding of the contract are recognized.
Johnson Machinery, 248 N.J.Super. at 290, 590 A.2d 1206 (emphasis added).
In reaching these conclusions, the Appellate Division first examined the Solid Waste Management Act (the "SWMA"), N.J.S.A. 13:1E-1 et seq., which incorporates and therefore determines the scope of the Closure Act. Johnson Machinery, 248 N.J.Super. at 296, 590 A.2d 1206. The SWMA defines "sanitary landfill facility" as: "[A] solid waste facility at which solid waste is deposited on or in the land as fill for the purpose of permanent disposal or storage for a period exceeding six months, *156 except that it shall not include any waste facility approved for disposal of hazardous waste." N.J.S.A. 13:1E-3q; see Johnson Machinery, 248 N.J.Super. at 296-97, 590 A.2d 1206.
Under the SWMA, a "solid waste facility" is defined as:
... [T]he plants, structures and other real and personal property acquired, constructed or operated or to be acquired, constructed or operated by any person ... including transfer stations, incinerators, resource recovery facilities, sanitary landfill facilities or other plants for the disposal of solid waste, and all vehicles, equipment and other real and personal property and rights therein and appurtenances necessary or useful and convenient for the collection or disposal of solid waste in a sanitary manner.
N.J.S.A. 13:1E-3h (emphasis added); see Johnson Machinery, 248 N.J.Super. at 297, 590 A.2d 1206. "Solid waste" is defined as: "[G]arbage, refuse, and other discarded material resulting from industrial, commercial and agricultural operations, and from domestic and community activities, and shall include all other waste materials including liquids...." N.J.S.A. 13:1E-3a; see Johnson Machinery, 248 N.J.Super. at 297, 590 A.2d 1206.
In holding that the presence of a noncommercial sole source landfill must be disclosed in a real property purchase agreement, the Appellate Division first examined the language of the relevant statutes and the relevant legislative history. The Appellate Division noted: "Nothing in our research suggests that the commercial/sole source distinction ... was ever contemplated by the Legislature." Id. The Appellate Division then noted the SWMA was enacted to regulate all solid waste disposal activities and "[n]othing in the previously cited definitions suggests ... sole source landfills were meant to fall outside the broad reach of the SWMA." Id.
In addition, the Appellate Division noted that although the SWMA permits the Department of Environmental Protection (the "DEP") to exempt specific waste disposal activities from regulation, sole source landfills were never exempted by the DEP. Id. at 297-98, 590 A.2d 1206. Moreover, "from the inception of its regulatory jurisdiction, DEP treated the `intra-plant' land disposal of `plant generated waste materials' as a `sanitary landfill' subject to the `registration, operation and closure maintenance' requirements of the SWMA and the agency's implementing regulations." Id. at 298, 590 A.2d 1206 (quoting N.J.A.C. 7:26-1.1).
The Appellate Division pointed out that non-commercial landfills had been exempted from regulation under SWMA in limited situations. Johnson Machinery, 248 N.J.Super. at 298-99, 590 A.2d 1206. Never, however, had sole source landfills been exempted. Id. From this, the Appellate Division drew the conclusion that the SWMA on its face encompassed non-commercial and sole source landfills. Id. at 299, 590 A.2d 1206. For non-commercial landfills to be entirely excluded from SWMA, either the New Jersey legislature or the DEP would have to expressly create an exemption. Id. No such exemption, however, has been created. Id.
Turning to the Closure Act, the Appellate Division noted the scope of the Closure Act is just as broad as the scope of the SWMA. Id. at 299, 590 A.2d 1206. The Appellate Division pointed out that neither the Closure Act nor the only New Jersey Supreme Court case interpreting the Closure Act indicated that noncommercial sole source landfills were excluded from regulation under the Closure Act. Id. at 300, 590 A.2d 1206.
The Appellate Division also examined the policy considerations behind regulating noncommercial sole source landfills under the Closure Act. The Appellate Division noted:
... [T]here is simply no basis to distinguish between sole source and ordinary commercial landfills. All landfills present an identical danger to the environment. That danger is not diminished because the solid waste comes from one source instead of many and there is no policy reason that we can discern why a sole source noncommercial industrial landfill should not be closed in the same *157 environmentally sound manner as is prescribed for all other landfills. Likewise, we see no reason why the operator of such a landfill should not be required to set aside funds for such closure and as compensation for innocent victims. In the absence of clear legislative direction to the contrary, there is no reason to exempt sole source noncommercial landfills from the operation of the Closure Act.
Id. at 302, 590 A.2d 1206. Accordingly, the Appellate Division reversed the trial court ruling that the disclosure requirement set forth in N.J.S.A. 13:1E-116 did not apply to noncommercial sole source landfills. Id. at 302-03, 590 A.2d 1206.
As a final matter, the seller in Johnson Machinery attempted to argue there is no absolute right to void a purchase agreement which does not contain the language required by N.J.S.A. 13:1E-116. 248 N.J.Super. at 307, 590 A.2d 1206. Rather, the seller argued equitable defenses might make such a purchase agreement enforceable, rather than voidable. Id. The Appellate Division, however, rejected this argument. The Appellate Division reasoned that permitting equitable defenses to make a purchase agreement enforceable rather than voidable would undermine the mandatory language of N.J.S.A. 13:1E-116. Johnson Machinery, 248 N.J.Super. at 308, 590 A.2d 1206. Accordingly, the power of a purchaser to void a real property purchase agreement which lacks the required disclosure under N.J.S.A. 13:1E-116 is not subject to equitable defenses. Johnson Machinery, 248 N.J.Super. at 308-09, 590 A.2d 1206.
2. Applicability of Johnson Machinery
The ruling of the Appellate Division in Johnson Machinery is dispositive. Because noncommercial sole source landfills are encompassed by N.J.S.A. 13:1E-116, the Contract had to disclose that National-Standard operated a landfill on the Property. It is uncontroverted that the Contract does not make such a disclosure. Accordingly, the Contract is voidable under N.J.S.A. 13:1E-116 at the election of Defendants.
Notwithstanding the fact that the issues in Johnson Machinery are identical to the issues in this action, National-Standard argues the ruling in Johnson Machinery should not be applied in this action. First, National-Standard argues the Johnson Machinery decision is not controlling because it is not a decision from the New Jersey Supreme Court. Plntf. Supp. Brief at 3. Second, National-Standard argues the holding in Johnson Machinery that the Closure Act applies to sole source landfills will be reversed by the New Jersey Supreme Court. Plntf. Supp. Brief at 5. Furthermore, National-Standard argues the holding in Johnson Machinery that the voiding of a contract under N.J.S.A. 13:1E-116 is not subject to equitable defenses will be reversed by the New Jersey Supreme Court. Plntf. Supp. Brief at 8. Third, National-Standard argues the Johnson Machinery decision should not be applied retroactively. Plntf. Supp. Brief at 11. Finally, National-Standard argues this summary judgment motion should be stayed pending appeal of the Johnson Machinery decision. Plntf. Supp. Brief at 18. Each of these arguments will be considered in turn.
a. Reliance on a State Court Decision
As mentioned, National-Standard argues it is inappropriate to rely upon the Johnson Machinery decision because that is not a decision of the New Jersey Supreme Court. Plntf. Supp. Brief at 3.
A federal court sitting in diversity must apply substantive state law. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); Yohannon v. Keene Corp., 924 F.2d 1255, 1264 (3d Cir.1991). Ordinarily, controlling state law will be that which is pronounced by the relevant state legislature or highest state court. Erie, 304 U.S. at 78, 58 S.Ct. at 822; see Commercial Union Ins. Co. v. Bituminous Casualty Co., 851 F.2d 98, 100 (3d Cir.1988). When a particular question of law has not been authoritatively decided by highest state court, the federal court must predict what the highest state court would decide if confronted with the same question. Yohannon, 924 F.2d at *158 1264; Aetna Casualty & Surety Co. v. Farrell, 855 F.2d 146, 148 (3d Cir.1988); McKenna v. Ortho Pharmaceutical Corp., 622 F.2d 657, 661 (3d Cir.), cert. denied, 449 U.S. 976, 101 S.Ct. 387, 66 L.Ed.2d 237 (1980).
In predicting how the highest state court would decide an issue, the federal court may look to analogous state court cases, treatises, restatements and law review articles. McKenna, 622 F.2d at 662-63. In addition, particular attention should be given to the decisions of intermediate state appellate courts. Aetna Casualty, 855 F.2d at 148; Patterson v. American Bosch Corp., 914 F.2d 384, 391 (3d Cir. 1990); Commercial Union, 851 F.2d at 101; McKenna, 622 F.2d at 662.
It has been noted that "`under some conditions, federal authority may not be bound even by an intermediate state appellate court ruling.'" McKenna, 622 F.2d at 662 (quoting Commissioner v. Estate of Bosch, 387 U.S. 456, 465, 87 S.Ct. 1776, 1782, 18 L.Ed.2d 886 (1951)).[2] Decisions of intermediate state appellate courts, however, constitute "presumptive evidence of state law." Commercial Union, 851 F.2d at 101; see Aetna Casualty, 855 F.2d at 148 ("[G]ive serious consideration to the opinion of an intermediate appellate court."). Indeed, the decision of an intermediate state appellate court "`is not to be disregarded by a federal court unless it is convinced by other persuasive data that the highest court of the state would decide otherwise'" Bosch, 387 U.S. at 465, 87 S.Ct. at 1782 (emphasis omitted) (quoting West v. A.T. & T. Co., 311 U.S. 223, 237, 61 S.Ct. 179, 183, 85 L.Ed. 139 (1940)); see Patterson, 914 F.2d at 391.
The Johnson Machinery decision is a compelling, well-reasoned decision by a New Jersey intermediate appellate court on the exact issue raised by Defendants. National-Standard concedes that if the ruling in Johnson Machinery is applied to the facts in this action, then summary judgment must be granted in favor of Defendants. Plntf. Supp. Brief at 2.
In Aetna Casualty, the court held that it was "obliged to accept" the decision of a New Jersey intermediate appellate court decision as controlling when the state court decision "represent[ed] a reasonable prediction of the rationale the state Supreme Court would adopt...." 855 F.2d at 150. Similarly, in this action, the Johnson Machinery decision is a reasonable (indeed probable) prediction of how the New Jersey Supreme Court would decide the issue of the applicability of the Closure Act to sole source landfills. The Johnson Machinery court considered and based its decision on New Jersey Supreme Court cases. See Johnson Machinery, passim. The Johnson Machinery decision is controlling.[3] Under New Jersey law, noncommercial sole source landfills are sanitary landfills which fact must be disclosed in a real property purchase agreement under N.J.S.A. 13:1E-116. Johnson Machinery, 248 N.J.Super. at 290, 590 A.2d 1206.
b. Reversal of Johnson Machinery
As mentioned, National-Standard contends the Johnson Machinery decision should not be deemed controlling because it will be reversed by the New Jersey Supreme Court. Plntf. Supp. Brief at 5-10. National-Standard relies on the trial court's decision in Johnson Machinery (which was reversed by the Appellate Division) as the proper interpretation of the Closure Act. Plntf. Supp. Brief at 5-7. National-Standard offers no other support for its proposition that the Johnson Machinery decision will be reversed. This argument is baseless.
The Appellate Division in Johnson Machinery examined the applicable legislative *159 history and case law. Indeed, the Appellate Division considered the same arguments made by National-Standard. There is no reason to discount the decision. National-Standard does nothing more than speculate that the Johnson Machinery decision may be reversed. Accordingly, the Johnson Machinery decision is controlling.[4]
c. Retroactivity
National-Standard contends the Johnson Machinery decision should not be applied retroactively to National-Standard. Plntf. Supp. Brief at 11.
Under New Jersey law, judicial decisions are, as a general rule, applied retroactively. New Jersey Election Law Enforcement Comm'n v. Citizens to Make Mayor-Council Government Work, 107 N.J. 380, 387, 526 A.2d 1069 (1987); see Gruber v. Price Waterhouse, 911 F.2d 960, 965 (3d Cir.1990) (presumption of retroactivity). The ruling in Johnson Machinery was applied to the facts before the Johnson Machinery court. Notably, the facts in the Johnson Machinery case are similar to the facts in this case in several significant aspects. The purchase agreement considered in Johnson Machinery was entered into in 1987, approximately four years before the Appellate Division held the Closure Act applied to sole source landfills. 248 N.J.Super. at 292, 590 A.2d 1206. In this case, National Standard and Defendants also entered into the Contract in 1987. Neither contract made the required disclosure. The Closure Act was enacted in 1981, approximately six years before the execution of both the purchase agreement in Johnson Machinery and the Contract between National Standard and Defendants. See Vi-Concrete Co. v. New Jersey, 115 N.J. 1, 13, 556 A.2d 761 (1989) (citing Sanitary Landfill Facility Closure and Contingency Act (Closure Act), L. 1981, c. 306).
In essence, the Appellate Division in Johnson Machinery applied its ruling to an agreement executed approximately four years earlier. There is no reason the ruling in Johnson Machinery should not be similarly applied to the Contract, which was also executed approximately four years earlier than the Appellate Division decision. Because the relevant facts and contracts in this case and in Johnson Machinery are parallel, the Appellate Division holding that the Closure Act applies to noncommercial sole source landfills is applicable to the facts and Contract in this case.
A decision, however, may be limited to prospective application under certain circumstances. Chevron Oil Co. v. Huson, 404 U.S. 97, 106, 92 S.Ct. 349, 355, 30 L.Ed.2d 296 (1971); Gruber, 911 F.2d at 965; Juzwin v. Asbestos Corp., 900 F.2d 686, 692 (3d Cir.), cert. denied, ___ U.S. ___, 111 S.Ct. 246, 112 L.Ed.2d 204 (1990); Hill v. Equitable Trust Co., 851 F.2d 691, 695-96 (3d Cir.1988), cert. denied sub nom., 488 U.S. 1008, 109 S.Ct. 791, 102 L.Ed.2d 782 (1989). As the Third Circuit stated in Gruber, the question whether a decision is to be applied prospectively only "involves a balancing which must be done on a case by case basis." 911 F.2d at 965. Under Chevron, three factors must be shown in order to overcome the presumption of retroactive application of newly created rules of law:
First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed. Second, it has been stressed that "we must ... weigh the merits and demerits in each case by looking to the prior history of the rule in *160 question, its purpose and effect, and whether retrospective operation will further or retard its operation." Finally, we have weighed the inequity imposed by retroactive application, for "[w]here a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the `injustice or hardship' by a holding of nonretroactivity."
Chevron, 404 U.S. at 106-07, 92 S.Ct. at 355 (citations omitted); see New Jersey Election Law Enforcement Comm'n, 107 N.J. at 389, 526 A.2d 1069. "The burden of persuasion rests on the party attempting to avoid retroactive application." Gruber, 911 F.2d at 965.
National-Standard contends it "did not believe that [N.J.S.A. 13:1E-116a] applied to sole source landfills which operated only as the depository of the waste that its own commercial operation had generated." Plntf. Supp. Brief at 14. National-Standard contends it was reasonable for it to rely on its belief because there were no contrary interpretations of the Closure Act at the time the Contract was entered into. Id.
As mentioned, for National-Standard to meet the first prong of the Chevron test, National-Standard must show Johnson Machinery overruled past precedent upon which National-Standard reasonably relied. 404 U.S. at 106, 92 S.Ct. at 355. Alternatively, National-Standard must show that Johnson Machinery resolved an issue of first impression in a manner not clearly foreshadowed. Chevron, 404 U.S. at 106, 92 S.Ct. at 355. The absence of past interpretation, however, is not equitable to the past precedent upon which National-Standard would have to show it relied.
In addition, the holding in Johnson Machinery was foreshadowed by pertinent authority. As the Appellate Division noted in Johnson Machinery, the SWMA had always been interpreted to encompass the Closure Act and sole source landfills. 248 N.J.Super. at 299, 590 A.2d 1206. The Appellate Division concluded the New Jersey legislature "has expressed its view of the SWMA legislation as generally including sole source landfills and its approval of the long-standing DEP interpretation to that effect." Id. Therefore, the holding that sanitary landfills include sole source landfills was clearly foreshadowed.
National-Standard has failed to meet its burden of showing the first prong of the Chevron test is met. There is no need to consider the remaining prongs of the Chevron test. The principles pronounced in the Johnson Machinery decision are appropriately applied to the facts and Contract in this case.
d. Stay Pending Appeal of Johnson Machinery
As mentioned, National-Standard argues discretion exists to stay this action pending the appeal of the Johnson Machinery decision. Plntf. Supp. Brief at 18. National-Standard indicates that the defendant in Johnson Machinery has applied to the New Jersey Supreme Court for review of the Johnson Machinery decision. Plntf. Supp. Brief at 19. There is no indication, however, whether the appeal will be heard. Accordingly, there is no reason to exercise the discretion to stay this action pending the appeal of the Johnson Machinery decision.[5] Moreover, even if certification is granted and the New Jersey Supreme Court reviews the Appellate Division decision, it is appropriate to anticipate an affirmance.
*161 CONCLUSION
For the reasons set forth above, the decision in Johnson Machinery is controlling. The Appellate Division explained the basis for its holding with compelling reasoning. Moreover, the decision is squarely in line with the intent of the explicit language and intent of the legislation: the disclosure and duration of environmental problems, or potential environmental problems, must occur in the contract of sale; a seller fails to do so at its own risk. Therefore, the Contract is voidable because it fails to disclose under N.J.S.A. 13:1E-116 that a sanitary landfill exists on the Property. There are no equitable defenses to the voiding of the Contract under N.J.S.A. 13:1E-116. Accordingly, summary judgment is granted in favor of Defendants. National Standard is to return to Clifton all deposit monies, plus accrued interest at the rate set forth in Article II of the Contract. The remainder of this action is dismissed.
NOTES
[1] The parties have submitted the following for consideration: Brief of Defendants Clifton Avenue Corp. and Hartz Mountain Industries, Inc. in Support of their Motion for Summary Judgment; Affidavit of Jeffrey A. Walder, Esq., in Support of Defendants' Motion for Summary Judgment; Plaintiff's Brief in Opposition to Defendants' Motion for Summary Judgment; Affidavit of Rene J. Van Steelandt in Opposition to Defendants' Motion for Summary Judgment; Affidavit of Richard W. Chapin, P.E. in Opposition to Defendants' Motion for Summary Judgment; Reply Brief of Defendants in Support of their Motion for Summary Judgment.
By letter, dated 18 July 1991, counsel to Defendants submitted a copy of the decision in Johnson Machinery Co. v. Manville Sales Corp., 248 N.J.Super. 285, 590 A.2d 1206 (App.Div. 1991). At oral argument on 22 July 1991, the parties were granted leave to file submissions regarding the relevance of the Johnson Machinery decision. Accordingly, National Standard submitted: Plaintiff National-Standard Company's Supplemental Brief on the Effect of the Appellate Division Opinion in Johnson Machinery Co. v. Manville Sales Corp., et al. ("Plntf. Supp. Brief"). Defendants submitted a letter-brief ("Letter-Brief") in response. Defendants by letter, dated 30 July 1991, corrected several errors in the Letter-Brief.
[2] In Bosch, the Court noted the decision of an intermediate state court would not control when the underlying issue of state law involves the construction of a federal statute. 387 U.S. at 465, 87 S.Ct. at 1782. In Bosch, federal tax statutes were implicated in a dispute involving state trust law. Id. at 459, 87 S.Ct. at 1779.
[3] Even if the Johnson Machinery decision were not controlling, it would be persuasive authority which would support a ruling in this case in accord with the ruling of the Appellate Division.
[4] National-Standard contends the question of equitable defenses was improperly before the Johnson Machinery court. Plntf. Supp. Brief at 10. Whether this is indeed true is unclear. Nevertheless, the Johnson Machinery court fully and adequately considered the question of equitable defenses, giving due regard to the legislative history of and policies behind the Closure Act. Accordingly, there is no basis to assume the New Jersey Supreme Court will reverse the Johnson Machinery court holding that there are no equitable defenses to the voidability of a contract which does not comply with N.J.S.A. 13:1E-116.
[5] National-Standard relies upon Kaiser Steel Corp. v. W.S. Ranch Co., 391 U.S. 593, 88 S.Ct. 1753, 20 L.Ed.2d 835 (1968), for the proposition that a federal court should defer resolving an issue grounded in state law until the highest court of the state decides the issue. Plntf. Supp. Brief at 18-19. In Kaiser, there was a declaratory judgment action pending in the state court at the same time as the federal court action was being litigated. 391 U.S. at 594, 88 S.Ct. at 1754. In other words, a stay was proper in Kaiser because state court action was imminent. In contrast, the appeal of the Johnson Machinery decision has not been certified. It is unclear whether the Johnson Machinery decision will be certified. Consequently, there is no imminent New Jersey Supreme Court decision which would lend guidance to the issues raised in this case. Accordingly, a stay is inappropriate for that reason alone. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/406183/ | 682 F.2d 1203
George BASIARDANES, Plaintiff-Appellant,v.CITY OF GALVESTON, Defendant-Appellee.
No. 81-2239.
United States Court of Appeals,Fifth Circuit.
Aug. 19, 1982.
Matthew Horowitz, Univ. of Conn. School of Law, Hartford, Conn., for plaintiff-appellant.
Robert V. Shattuck, Jr., City Atty., Galveston, Tex., for defendant-appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before GARZA, POLITZ and WILLIAMS, Circuit Judges.
JERRE S. WILLIAMS, Circuit Judge:
1
This case presents a First Amendment and Due Process challenge to a zoning ordinance that is so broad it effectively bans the showing of nonobscene but sexually oriented motion pictures at adult theaters within the City of Galveston. George Basiardanes, a property owner in Galveston, leased his building for the showing of adult films. Galveston then passed a zoning ordinance that prohibited Basiardanes from using his building for this purpose. After the Galveston adult theater ordinance frustrated his plans to house an adult theater in his building, Basiardanes brought this suit, claiming that the ordinance had the effect of zoning adult theaters out of the city and thereby constituted a prior restraint of protected speech. Basiardanes also challenged the ordinance on vagueness grounds.
2
The district court held that Basiardanes lacked standing to challenge certain provisions of the ordinance and upheld the others against constitutional attack. 514 F.Supp. 975 (S.D.Tex.1981). Specifically, the district court held that the ordinance did not constitute a prior restraint even though it excluded adult theaters, as defined in the ordinance, from 85% of Galveston and perhaps from all practicable locations in the City. Basiardanes appeals from this judgment. Finding that the ordinance does infringe protected speech and that the district court erred in its denial of standing on one issue although it was correct on others, we reverse in part and remand.
I. The Zoning Ordinance
3
The City of Galveston lies on an island on the Gulf Coast of Texas. Sixty thousand people have chosen to make their homes in Galveston, the area of which is approximately 52 square miles. The City is a popular resort and enjoys a large volume of tourist traffic especially during the warmer months.
4
In 1970, George Basiardanes acquired a three-story building in the downtown Galveston business district. Initially, he opened a sandwich shop and pool hall on the ground floor, and rented out the rooms on the upper two floors to individual tenants. During the 1970s, however, Galveston's downtown business district suffered the decline that has afflicted many American cities. Because fewer and fewer people came downtown, the pool hall's business dropped off. In 1977, Basiardanes decided to sell his building, or, failing a buyer, lease it to a business tenant.
5
Basiardanes' leasing efforts evoked a response from a movie concern called Universal Amusements Company. Universal Amusements entered into an oral contract with Basiardanes to lease part of the ground floor to show nonobscene adult motion pictures. Basiardanes agreed to remodel the building for that purpose. To herald the arrival of his new tenant, Basiardanes put a sign on the building reading "Adult Theater."
6
Basiardanes' enthusiasm for his new venture was not shared by Galveston city officials. The proposed theater lay across the street from a major renovation of the City's Grand Opera House. The city government feared that the presence of an adult theater so close to the opera house would deter families from patronizing the historic opera house and thereby impede the upgrading of the area. Moreover, the City apparently believed that a nexus existed between adult theaters and crime. Downtown adult theaters, according to the City, threatened its effort to reduce the crime rate in that area. Thus, when Galveston got wind of Basiardanes' plans, the city government quickly moved to block the opening of an adult theater in Basiardanes' building.
7
The City's first action was to pass a moratorium on downtown building permits. The moratorium thwarted Basiardanes' efforts to convert the ground floor of his building to a theater. Shortly after the moratorium was passed, the City erected an even higher barrier to Basiardanes' plan to open an adult theater. The City passed Ordinance 78-1, which comprehensively regulates the location of adult theaters and adult bookstores.1 That ordinance is the subject of this suit.
8
The ordinance keys its definition of adult motion picture theaters to Texas law. Under the ordinance, an adult motion picture theater is one "from which, under the laws of the State of Texas, minors are excluded by virtue of age unless accompanied by a consenting parent, guardian or spouse."2 The ordinance applies to all theaters that regularly show movies that Texas prohibits minors from viewing without parental permission. It is not limited to theaters that show obscene movies or even blatantly sexual but nonobscene movies.
9
Ordinance 78-1 restricts adult movie theaters to areas zoned for three uses: central business, light industry, and heavy industry. Residential areas are off-limits altogether. Within the business and industrial areas, the ordinance disperses adult theaters in three ways. First, a theater must be more than 500 feet from an area zoned residential, or from any two, or any combination of two, "pool halls, liquor stores, or bars." Second, an adult theater must be more than 1,000 feet from another adult theater or adult bookstore. Third, an adult theater must be more than 1,000 feet from any "church, school, public park, or recreational facility where minors congregate."
10
These dispersal requirements result in excluding adult theaters from 80% to 90% of the three areas from which they are not flatly banned, including all of the central business district. The only conceivable remaining locations are in the areas zoned for light and heavy industry. The industrial zones, however, are largely a patchwork of swamps, warehouses, and railroad tracks. They also lack access roads and retail establishments.
11
Further, even for those locations not barred by the dispersal requirements, a special permit must be obtained to show adult films. Under the ordinance, the City may grant a permit only if it finds: (1) that the theater is not contrary to the public interest or injurious to adjacent properties, (2) that the theater will not enlarge or promote a "skid row" area, (3) that the theater will not interfere with a neighborhood conservation or revitalization program, and (4) that all zoning laws will be observed.
12
The ordinance also regulates the on-site advertising of adult theaters. The ordinance prohibits any advertising or displays for an adult bookstore or theater that are visible to the public from any street, sidewalk, or other public place. No other commercial establishments are similarly regulated.
13
Basiardanes had been forced to discontinue renovation of his building when the City first passed the building-permit moratorium. Simultaneously, the City had pressured Basiardanes to remove his sign announcing the imminent arrival of adult movies to his premises. Ordinance 78-1 then dealt a fatal blow to Basiardanes' plans for presenting adult entertainment in Galveston. Deprived of the revenues from his lease, Basiardanes contracted to sell his building and brought suit for an injunction and damages against the City under 42 U.S.C. § 1983 claiming a violation of his rights under the First and Fourteenth Amendments. After a trial, the district court upheld the constitutionality of Ordinance 78-1 insofar as Basiardanes was held to have standing to question its validity.
II. Vagueness
14
Basiardanes challenges several portions of Ordinance 78-1 for vagueness. The ordinance regulates "adult theaters." Basiardanes contends that the term "adult theater" is unduly imprecise because the definition applies to theaters showing adult films "on a regular basis" but fails to define "regular basis." He also finds imprecision in an exception from the definition of adult theater for "schools" and "public auditoriums." In addition, the dispersal sections of Ordinance 78-1 contain several terms that Basiardanes finds vague. Adult theaters may not be located within specified distances of churches, schools, parks, "recreational facilities where youths congregate," bars, or other adult theaters. Basiardanes contends that each of these words has uncertain meaning.
15
Laws that are unconstitutionally vague fall because persons who must conform their conduct to the law are entitled to fair notice of what is permitted and proscribed. Village of Hoffman Estates v. Flipside, Hoffman Estates, --- U.S. ----, 102 S.Ct. 1186, 1193, 71 L.Ed.2d 362 (1982); Grayned v. City of Rockford, 408 U.S. 104, 108, 92 S.Ct. 2294, 2298, 33 L.Ed.2d 222 (1972); Fernandes v. Limmer, 663 F.2d 619, 635 (5th Cir. 1981). Fair notice protects those who might otherwise stray into the regulated area, prescribes standards for law enforcers, and preserves legitimate activity against the chill that flows from a law of uncertain scope. Grayned, 408 U.S. at 108-09, 92 S.Ct. at 2298-99.
16
Basiardanes challenges the Galveston ordinance as vague on its face. A law is facially vague if its terms are so loose and obscure that they cannot be clearly applied in any context. Such a "law is incapable of any valid application," Steffel v. Thompson, 415 U.S. 452, 474, 94 S.Ct. 1209, 1223, 39 L.Ed.2d 505 (1974), because it does not provide any standards against which one's conduct may be measured. Smith v. Goguen, 415 U.S. 566, 578, 94 S.Ct. 1242, 1249-50, 39 L.Ed.2d 605 (1974).
17
The terms of the Galveston ordinance, however, are not vague as applied to Basiardanes himself. Trial testimony established that Basiardanes knew that the theater he proposed to house would show adult movies within the meaning of the ordinance. Moreover, Basiardanes conceded that his building lay within two blocks of a church and within 500 feet of nearly a dozen bars. Thus, Basiardanes' facial challenge to the ordinance must fail because the terms of the ordinance clearly apply to his own building.
18
Basiardanes nevertheless claims that he has standing to challenge the ordinance on grounds that it is vague as applied to others. Ordinarily, a litigant to whom a statute clearly applies lacks standing to argue that the statute is vague as to others. In the First Amendment context, however, courts have relaxed the general rule against standing to raise the rights of third parties. Under Young v. American Mini Theatres, Inc., 427 U.S. 50, 96 S.Ct. 2440, 49 L.Ed.2d 310 (1976), a litigant may assert the First Amendment rights of others when the effect of a vague ordinance on legitimate expression is real and substantial and the language of the ordinance is not readily subject to a narrowing construction by state courts. 427 U.S. at 60, 96 S.Ct. at 2447 (plurality opinion); Erznoznik v. City of Jacksonville, 422 U.S. 205, 216, 95 S.Ct. 2268, 2276, 45 L.Ed.2d 125 (1975).
19
American Mini Theatres concerned a zoning ordinance that regulated movies "characterized by an emphasis" on certain bodily parts and sexual activities. A theater operator maintained that it had standing to argue that the ordinance was unconstitutionally vague as applied to other theaters, even though the ordinance was clearly applicable to it. The alleged vagueness was in how much emphasis on the specified bodily parts and activities the ordinance required before a film became subject to regulation. The Court denied that this vagueness issue posed a sufficient threat to protected speech to warrant third party standing. "For most films, the question will be readily answerable; to the extent that an area of doubt exists, we see no reason why the ordinances are not 'readily subject to a narrowing construction by the state courts' " 427 U.S. at 60, 96 S.Ct. at 2447.
20
Under American Mini Theatres, Basiardanes' contention that the Galveston ordinance is vague as applied to other theater operators fails to warrant third party standing. Basiardanes argues that the Galveston ordinance applies to theaters showing adult films on a "regular basis," and that it is unclear what "regular basis" means. We find no real and substantial ambiguity here, and to the extent that "regular" is vague, state courts may clarify it without insuperable difficulty. Similarly, the other terms challenged by Basiardanes, such as "church" and "school," have such narrow areas of vague application that we see no pressing need to adjudicate the rights of parties not before the court.3 Whether these terms are unconstitutionally vague may be decided when one aggrieved by their imprecision chooses to challenge them.
21
Basiardanes also argues that he has standing to make his vagueness challenge in his capacity as a movie viewer. He claims that Ordinance 78-1's vagueness intimidates movie theaters and deters them from showing adult films. He seeks injunctive relief against the ordinance to grant him his right to view adult films free from the inhibition of the ordinance.
22
The First Amendment protects the right to hear as well as to speak. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Counsel, Inc., 425 U.S. 748, 96 S.Ct. 1817, 48 L.Ed.2d 346 (1976). An ordinance that silences a willing speaker, therefore, also works a constitutional injury against the hearer. In Virginia State Board, the Supreme Court upheld the right of consumers to challenge a Virginia statute that restrained the freedom of pharmacists to advertise the prices of prescription drugs. The Court stated that "(f)reedom of speech presupposes a willing speaker. But where a speaker exists, as is the case here, the protection is afforded to the communication, to its source and recipients both." 425 U.S. at 756, 96 S.Ct. at 1823 (footnote omitted).4
23
Although consumers do have the standing to challenge limitations on the exercise of speech in proper circumstances, on this record we find that Basiardanes lacks standing in his capacity as a moviegoer. Recipients of protected communication have standing only if there is a speaker who wishes to express himself or herself. Virginia State Board, 425 U.S. at 754, 96 S.Ct. at 1821-22. The record here fails to disclose the existence of a willing speaker affected by the ordinance, other than Basiardanes. Although several witnesses testified that Galveston's market could support an additional adult theater, none testified that he would open such a theater but for Ordinance 78-1.5 In the absence of a willing speaker, we reject Basiardanes' argument that he has standing to request injunctive relief in the capacity as a movie viewer. Thus, other than to hold that Ordinance 78-1 is not vague on its face, we do not reach the merits of Basiardanes' vagueness challenge.
24
III. Restriction on Location of Adult Theaters
25
Ordinance 78-1 severely limits the options of one wishing to open an adult theater in Galveston. Basiardanes maintains that the zoning restriction is tantamount to a total ban of additional adult theaters in Galveston in breach of the First Amendment. In Basiardanes' view the locations permitted by the ordinance fall too far short of commercial viability to allow an adult theater to open. The district court rejected Basiardanes' contention, finding that Ordinance 78-1, though it does limit adult theaters to undesirable locations, "strikes at the pocketbook and not at the Constitution." 514 F.Supp. at 982. We hold that the conclusion of the district court is in error. Ordinance 78-1 constitutes a restraint of speech in violation of Basiardanes' First Amendment rights.6
26
A city's authority to zone is an integral aspect of its police power. The preservation of residential neighborhoods and business districts against the deteriorating influence of crime and blight surely ranks among the highest functions that city dwellers expect its planners to perform. In recognition of the place of zoning in maintaining and upgrading the quality of life in cities, courts generally adopt a deferential posture towards zoning ordinances, Agins v. City of Tiburon, 447 U.S. 255, 260, 100 S.Ct. 2138, 2141, 65 L.Ed.2d 106 (1980); Village of Belle Terre v. Boraas, 416 U.S. 1, 94 S.Ct. 1536, 39 L.Ed.2d 797 (1974); Stansberry v. Holmes, 613 F.2d 1285 (5th Cir. 1980). Ordinarily, a zoning regulation will be sustained if it is rationally related to a legitimate state interest and does not extinguish all practicable uses of the property. Id.
27
Different judicial attitudes come into play, however, when zoning schemes intrude upon activity protected by the First Amendment. In Schad v. Borough of Mount Ephraim, 452 U.S. 61, 101 S.Ct. 2176, 68 L.Ed.2d 671 (1981), the Supreme Court struck down on First Amendment grounds a zoning ordinance that prohibited all live entertainment within city limits. Declining to apply a deferential standard of review, the Court stated "... when a zoning law infringes upon a protected liberty, it must be narrowly drawn and must further a sufficiently substantial governmental interest." See Deerfield Medical Center v. City of Deerfield Beach, 661 F.2d 328, 336 (5th Cir. 1981) (heightened standard of review applied to a city's denial of a permit to open an abortion clinic). Our first inquiry, therefore, is whether Ordinance 78-1 infringes a protected right under the proper constitutional test.
28
Galveston's regulation of adult theaters plainly implicates First Amendment rights. The ordinance is not limited to movie theaters and bookstores catering to those with an appetite for obscene materials falling outside the protection of the First Amendment, Miller v. California, 413 U.S. 15, 93 S.Ct. 2607, 37 L.Ed.2d 419 (1973). Rather, Galveston has chosen to regulate to the point of banning theaters regularly showing any film that, under Texas law, may not be viewed by minors who are unaccompanied by an adult. A state's power to protect children against exposure to pornography is considerably broader than its power to regulate material produced with and consumed by adults. New York v. Ferber, --- U.S. ----, 102 S.Ct. 3348, ----, 72 L.Ed.2d ---- (1982) (upholding the imposition of criminal penalties on the distribution of child pornography that is not obscene under Miller, supra). Cf. FCC v. Pacifica Foundation, 438 U.S. 726, 98 S.Ct. 3026, 57 L.Ed.2d 1073 (1978) (government's interest in shielding youths from exposure to indecent language justifies a restraint on broadcasters' freedom of speech). But here the authorities are prohibiting theaters from exhibiting films to adults rather than children. Many movies from which unaccompanied minors may be excluded are constitutionally protected expressions of free speech for adults. See Ginsberg v. New York, 390 U.S. 629, 634-37, 88 S.Ct. 1274, 1277-79, 20 L.Ed.2d 195 (1968). Cf. Pinkus v. United States, 436 U.S. 293, 297, 98 S.Ct. 1808, 1812, 56 L.Ed.2d 293 (1978) (children are not part of the "community" by whose standards a work may be found obscene for adults under 18 U.S.C. § 1461). By pegging its definition of adult theaters to Texas law on obscenity for minors, Galveston's regulation of adult theaters sweeps broadly into the area protected by the First Amendment.
29
Galveston argues that there is no restriction of First Amendment rights in this case because the ordinance simply regulates the time, place, and manner of the operation of adult theaters.7 A reasonable time, place, and manner regulation restricts speech but leaves open adequate alternative channels of communication to the speaker. Such a regulation does not violate the First Amendment. Heffron v. ISKCON, 452 U.S. 640, 101 S.Ct. 2559, 2567, 69 L.Ed.2d 298 (1981); Schad, 101 S.Ct. at 2186; Kovacs v. Cooper, 336 U.S. 77, 85-87, 69 S.Ct. 448, 452-53, 93 L.Ed. 513 (1949). In support of its argument that Ordinance 78-1 leaves open adequate alternative channels, Galveston relies on Young v. American Mini Theatres, Inc., 427 U.S. 50, 96 S.Ct. 2440, 49 L.Ed.2d 310 (1976). A comparison of the cases reveals that this reliance is misplaced.
30
In American Mini Theatres, the Supreme Court upheld a zoning ordinance that dispersed adult theaters throughout the city. An adult theater in Detroit could not operate within 1,000 feet of any other adult theater or other regulated use.8 The Supreme Court found no constitutional infirmity in the application of Detroit's zoning law to adult theaters. The Court rejected an argument that the dispersal requirements alone muzzled protected speech. 427 U.S. at 62-63, 96 S.Ct. at 2448-49.
31
Galveston argues that American Mini Theatres establishes the constitutionality of its own zoning ordinance because Galveston modeled its law on the Detroit ordinance approved by the Supreme Court. Although Galveston is not alone in patterning a restriction on adult theaters on Detroit's dispersal ordinance,9 merely mimicking the ordinance upheld in American Mini Theatres is not enough. Galveston asks us to overlook the overriding fact that the American Mini Theatres ordinance did not substantially exclude adult theaters from the city or significantly cut down on viewers' access to adult movies. See 427 U.S. at 62, 96 S.Ct. at 2448 (plurality opinion).10 The Court expressly recognized that "(t)he situation would be quite different if the ordinance had the effect of suppressing, or greatly restricting access to, lawful speech." 427 U.S. at 71 n.35, 96 S.Ct. at 2453 n.35. See Schad v. Borough of Mount Ephraim, 101 S.Ct. at 2184, 2186 (noting that American Mini Theatres is limited to ordinances that while regulating nevertheless preserve access to protected speech). In contrast, Galveston has enacted a law that bans such theaters rather than disperses them. The law has the precise effect of suppressing speech that the Supreme Court recognized would create a different issue than was faced in American Mini Theatres itself.
32
The Galveston ordinance bans adult theaters outright from much of the city. The remaining areas of the city are off-limits if too close to certain structures such as churches, schools, and residential areas. Basiardanes introduced maps of the city in evidence showing what oppressive options remained to an aspiring promoter of adult films.11 In the ten percent to fifteen percent of the city not categorically banned, adult theaters may operate only in the industrial zones at a great distance from other consumer-oriented establishments. Few access roads lead to the permitted locations, which are found among warehouses, shipyards, undeveloped areas, and swamps. These locations are poorly lit, barren of structures suitable for showing films, and perhaps unsafe. In theory they are available to adult movie proprietors and patrons, but in fact they are completely unsuited to this use.
33
The district court held that as long as some space within the city limits of Galveston is available for adult movie theaters, the unattractiveness of those locations is irrelevant. The court viewed the drawbacks of opening a movie theater in an industrial zone as simply the "reasonable economic burden that befalls some activity in every land-use program." 514 F.Supp. at 982 (footnote omitted). A tolerance of economic burden is appropriate in judging zoning ordinance that has no impact on protected speech. But when a claim of suppression of speech is raised, an exclusive focus on economic impact is improper. "The inquiry for First Amendment purposes is not concerned with economic impact; rather, it looks only to the effect of this ordinance upon freedom of expression." American Mini Theatres, 427 U.S. at 78, 96 S.Ct. at 2456 (Powell, J., concurring).
34
The effect of Ordinance 78-1 is to render it all but impossible in Galveston for a proprietor to open a theater to exhibit adult films or for patrons to attend them. The district court erred in failing to consider the consequences of confining adult theaters to "the most unattractive, inaccessible, and inconvenient areas of a city." Deerfield Medical Center v. City of Deerfield Beach, 661 F.2d at 336 (holding that the restriction of abortion facilities to undesirable areas places a significant burden on a woman's decision whether to have an abortion). Viewing Ordinance 78-1 in light of its impact on free speech, it is clear that the ordinance drastically impairs the availability in Galveston of films protected for adult viewing by the First Amendment. Galveston's ordinance thus cannot be sustained as a reasonable time, place, and manner regulation under American Mini Theatres, supra. Instead, we must test the ordinance under the more stringent standard of Schad v. Borough of Mt. Ephraim, supra in which the zoning ordinance prohibited live entertainment in the city.
35
Schad directs us to examine the strength and legitimacy of the governmental interest behind the ordinance and the precision with which the ordinance is drawn. Unless the ordinance advances significant governmental interests and accomplishes such advancement without undue restraint of speech, the ordinance is invalid. 101 S.Ct. at 2183-84. We conclude that Ordinance 78-1 is neither motivated by a sufficient governmental interest, nor narrowly tailored so as to satisfy the First Amendment.
36
As to the showing of governmental interest, the avowed reason for Ordinance 78-1 is to arrest deterioration of the downtown area and to prevent and curtail crime. The mayor of Galveston testified that he saw a link between the deterioration of the downtown area and the opening up of an adult theater. In the mayor's eyes, the efforts of Galveston to restore the troubled downtown area would be thwarted by the entry of an adult theater into the heart of the zone targeted for renovation. Ordinance 78-1 purported to respond to the concern for the adverse effects of adult theaters by dispersing those theaters throughout the city.
37
The rehabilitation of blighted urban areas and the use of zoning to accomplish urban renewal are legitimate goals for a city. An adult theater ordinance that furthers such goals satisfies the initial requirement that the city have a substantial state interest to support a law restricting free speech.12
38
The assertion of a state interest, however, is not enough. Schad v. Borough of Mt. Ephraim, 101 S.Ct. at 2184. The city must buttress its assertion with evidence that the state interest has a basis in fact and that the factual basis was considered by the city in passing the ordinance. Id. at 2185 (rejecting, for want of a factual basis, asserted reasons given in support of an ordinance that restricted First Amendment rights); Avalon Cinema Corp. v. Thompson, 667 F.2d 659, 661 (8th Cir. 1981) (en banc) (relying on the city's failure to prove deleterious effects of adult theaters in striking down an adult theater ordinance); Keego Harbor Co. v. City of Keego Harbor, 657 F.2d 94, 98 (6th Cir. 1981) (requiring the city to prove its justification for burdening First Amendment rights of adult theater operators).
39
Still limiting our inquiry at the moment to governmental interest, there is no evidence in the record that the Galveston City Council passed Ordinance 78-1 after careful consideration or study of the effects of adult theaters on urban life. The purported nexus between crime and adult theaters appears to be premised solely upon the speculation of Galveston city officials. Even at trial, Galveston offered no evidence of what vices would flourish if adult theaters were allowed downtown.
40
This paucity of evidence stands in sharp contrast to the facts of American Mini Theatres. In that case, the Detroit Common Council had heard extensive testimony before it enacted an adult theater ordinance. The Detroit Council considered the studies of sociologists and urban planners on the consequences of allowing concentrations of adult theaters. Only after its consideration did Detroit decide to disperse them. American Mini Theatres, 427 U.S. at 80 n.4, 96 S.Ct. at 2457 n.4 (Powell, J. concurring). The Council's findings were crucial to the Supreme Court in upholding the Detroit ordinance. See id. at 55, 80, 96 S.Ct. at 2445, 2457. Here, the empty record before the Galveston City Council when it decided to regulate adult theaters undermines its contention that the ordinance in fact furthers the goal of rehabilitating the downtown area. No evidence was introduced to supplement or bolster the City Council's assumption that one adult theater located downtown and urban blight are linked.
41
The timing of the ordinance's passage also casts doubt on the relationship between the ordinance and its alleged purpose. See Avalon Cinema Corp., 667 F.2d at 661. Galveston had no zoning restrictions on adult theaters until Basiardanes announced the opening of a theater across the street from the Grand Opera House. The Grand Opera House is a major and expensive project in Galveston's redevelopment plan. The sequence of events strongly suggests that Galveston reacted to Basiardanes' proposed theater because of its location, not because of the City's concern with urban deterioration.
42
The protection of the Grand Opera House's attractiveness to patrons is a legitimate goal.13 But it is not one with the same weight as the preservation of inner cities against crime and blight, nor is it one that entitles the City to squelch free speech. The history of Ordinance 78-1 leads us to conclude that the City's motive was to remove Basiardanes' adult theater from the vicinity of the opera house because of apprehension that an adult theater would drive patrons away. This history does not support Galveston's claim that it was motivated by the crime and blight problem.14
43
Finally, the narrow focus of the ordinance on adult theaters and bookstores alone renders suspect the City's claim that the ordinance aimed to cure the deterioration of the downtown. As far as the record shows, Galveston places no zoning restrictions on bars, pool halls, pawn shops, or massage parlors. Rather, Galveston has trained its sights solely on theaters exhibiting films that enjoy First Amendment protection. Cf. American Mini Theatres, 427 U.S. at 53-54, 96 S.Ct. at 2444-45 (Detroit ordinance regulated nine uses viewed as causes of blight in addition to adult theaters). Galveston need not tackle all of its zoning problems at once, see Railway Express Agency, Inc. v. New York, 336 U.S. 106, 69 S.Ct. 463, 93 L.Ed. 533 (1949). The City's exclusive attention to adult theaters, however, cuts against the argument that Ordinance 78-1 is motivated to protect the urban environment against decay.
44
In sum, we conclude that Galveston has not sustained its burden of showing that Ordinance 78-1 responds to the adverse effects of adult theaters rather than to a perceived unpleasantness in having an adult theater downtown.
45
Even assuming our conclusion was otherwise on the showing of governmental interest, we would still be unable to sustain the constitutionality of Ordinance 78-1. To survive judicial scrutiny, the City must also show the ordinance is narrowly drawn to serve a legitimate government interest with only the minimum intrusion upon First Amendment freedoms. Schad, 101 S.Ct. at 2186; Village of Schaumburg v. Citizens for a Better Environment, 444 U.S. 620, 637, 100 S.Ct. 826, 836, 63 L.Ed.2d 73 (1980). Ordinance 78-1 restricts speech much more broadly than is necessary to achieve its asserted purposes.
46
Ordinance 78-1 does far more than to regulate obscene movies, or sexually-explicit movies that are sheltered by the First Amendment although bordering on the obscene. Galveston defines the coverage of its ordinance by reference to Texas law on what adults believe is undesirable viewing for minors without parental consent. The ordinance thus reaches many films that are far removed from what is colloquially termed "hard core," or even "soft core," pornography.
47
Basiardanes himself proposed to exhibit only "adult movies," lawful but of the more explicit variety. Nevertheless, under the First Amendment overbreadth doctrine, he is entitled to argue that the ordinance is unconstitutional as applied to other theater operators whose fare, though sexually graphic and subject to the ordinance, falls in the mainstream of American film entertainment. Schad, 101 S.Ct. at 2181 (exhibitor of nude dancing may raise the First Amendment claims of theaters and concert halls to attack an ordinance prohibiting all live entertainment). The overbreadth of Ordinance 78-1 is real and substantial in relation to its legitimate scope, if any. Broadrick v. Oklahoma, 413 U.S. 601, 93 S.Ct. 2908, 37 L.Ed.2d 830 (1973).
48
Many works that might be classified as obscene for minors, and therefore regulated by Ordinance 78-1, are works of merit to adults. The Supreme Court has condemned a state law under which a defendant was prosecuted for selling to an adult a book that was obscene to children. Butler v. Michigan, 352 U.S. 380, 77 S.Ct. 524, 1 L.Ed.2d 412 (1957). The Court reasoned that such a law would "reduce the adult population ... to reading only what is fit for children." Id. at 383, 77 S.Ct. at 526. Galveston's ordinance has a similar effect on adults who view films.
49
American theaters today commonly exhibit a broad range of films that may be unfit for children without in any way contributing to urban blight or promoting crime.15 Yet theaters showing these movies are subject to Ordinance 78-1 to the same extent as an adult theater showing films on the fringe of the obscene. Whatever connection there is between crime or blight and adult theaters, the requisite connection is surely missing with respect to popular but sexually oriented films, which are covered by Ordinance 78-1.16 The scope of Ordinance 78-1 exceeds any legitimate governmental purpose in upgrading the downtown and preventing crime. Because Ordinance 78-1 is far more restrictive than necessary to achieve its purported goals, it violates the First Amendment.
50
It must be made totally clear that this ordinance, through the guise of regulation, banned theaters showing motion pictures that admittedly could be shown with complete legality to every person in Galveston seventeen years of age and over. The intrusion upon First Amendment rights is manifest.
IV. Permit Requirement
51
Ordinance 78-1 authorizes the establishment of an adult theater in a qualified location only after the City Council grants a permit specifically sanctioning such a use. Section 52(b), quoted at 514 F.Supp. at 985. Basiardanes challenges the permit scheme as vesting undue discretion in public officials in violation of the First Amendment. See, e.g., Shuttlesworth v. City of Birmingham, 394 U.S. 147, 89 S.Ct. 935, 22 L.Ed.2d 162 (1969); Freedman v. Maryland, 380 U.S. 51, 85 S.Ct. 734, 13 L.Ed.2d 649 (1965). The district court held that Basiardanes lacked standing to raise this claim because the permit scheme had no effect on him.
52
At oral argument, Basiardanes conceded that he lacks standing to attack the permit system, and this concession was correct. We are concerned in this suit with retrospective, not prospective, relief. Basiardanes does not seek injunctive relief in his capacity as a building owner, and we have held above that he does not have standing to seek injunctive relief in his capacity as a film viewer. This remains a suit only for money damages. The alleged damages were caused by Ordinance 78-1's denial to Basiardanes of his freedom to lease his building for use as an adult theater. Basiardanes has standing, therefore, to challenge the ordinance only insofar as he suffered damages from the ordinance's effect on his use of the building or otherwise suffered a restraint of his First Amendment rights.
53
The ordinance precluded Basiardanes from obtaining lease revenues from Universal Amusements Company because of the dispersal provisions alone. The permit system played no role in causing the injuries Basiardanes has alleged. Basiardanes did not actually apply for a permit, nor did the threat of unchanneled discretion in Galveston city officials deter him from engaging in activity protected by the First Amendment.17 There is, therefore, no basis in this damages action for undertaking to adjudicate the constitutionality of Galveston's permit system.
V. Advertising Ban
54
Basiardanes' final challenge is to the advertising ban in Ordinance 78-1. The ordinance provides that "(a)dvertisements, displays, or other promotional materials for an adult bookstore or adult picture theater shall not be shown or exhibited so as to be visible to the public from any street, sidewalk, or other public place." Ordinance 78-1, Section 52(a)(iii), quoted at 514 F.Supp. at 984. Basiardanes contends that this absolute drawing of the curtains on adult theaters' advertising excessively regulates commercial speech in violation of the First Amendment.
55
The district court denied Basiardanes standing to challenge the advertising restriction. The court apparently believed that Basiardanes had standing to challenge provisions of the ordinance only if they affected his property. In the court's view, the advertising ban had not "operated against (Basiardanes') property interest."18 514 F.Supp. at 979. We hold that the advertising ban had an actual and specific impact on Basiardanes' First Amendment rights, giving him standing to challenge the ban.
56
After entering into the lease with Universal Amusements Company, Basiardanes posted a sign advising the public of his plans to bring adult entertainment to downtown Galveston. Galveston quickly imposed a moratorium on downtown building permits and also pressured Basiardanes to remove his sign. The sign had borne nothing more than the legend "Adult Theater." At trial, Basiardanes testified that he would have reposted the sign, in anticipation of winning this lawsuit, but for the advertising ban in Ordinance 78-1.
57
The advertising ban restrained Basiardanes from placing the sign on his building.19 Allegations of infringements of free speech, of course, may be redressed under the civil rights laws. Douglas v. City of Jeannette, 319 U.S. 157, 162, 63 S.Ct. 877, 880, 87 L.Ed. 1324 (1943). Accordingly, we turn to the merits of Basiardanes' claim.
58
Commercial speech, once excluded from the coverage of the First Amendment, now enjoys constitutional protection. Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, supra. See In Re R.M.J., --- U.S. ----, 102 S.Ct. 929, 71 L.Ed.2d 64 (1982); Central Hudson Gas Co. v. Public Service Commission, 447 U.S. 557, 100 S.Ct. 2343, 65 L.Ed.2d 341 (1980); Linmark Associates, Inc. v. Township of Willingboro, 431 U.S. 85, 97 S.Ct. 1614, 52 L.Ed.2d 155 (1977); United States Postal Service v. Athena Products, Ltd., 654 F.2d 362 (5th Cir. 1981), cert. denied, --- U.S. ----, 102 S.Ct. 1768, 72 L.Ed.2d 173 (1982). State and local governments have freer rein to regulate commercial speech than political or expressive speech, however. See Metromedia, Inc. v. City of San Diego, 453 U.S. 490, 101 S.Ct. 2882, 69 L.Ed.2d 800 (1981) (upholding the prohibition of commercial speech on billboards but striking down the prohibition of noncommercial speech on billboards). Recent Supreme Court cases teach that to regulate truthful commercial speech, the government must have a substantial interest that the regulation directly advances. In addition, the regulation must be no "more extensive than is necessary to serve that interest." Central Hudson Gas v. Public Service Commission, 447 U.S. at 566, 100 S.Ct. at 2351. See also In Re R.M.J., 102 S.Ct. at 2892 (plurality opinion). Applying this analysis to Galveston's restraint on adult theater advertising, we conclude that the restraint is constitutionally infirm.
59
Galveston offered no justification in its brief for its advertising ban and the ordinance itself gives no clue of its purpose. Trial testimony suggests however, that Galveston was attempting to shield the public from lurid advertisements for sexually explicit films. The interest in so doing is both strong and legitimate. Provocative posters depicting the celluloid delights within an adult theater may be kept from the eyes of minors, at the least. New York v. Ferber; supra, FCC v. Pacifica Foundation, supra. Moreover, a ban directly serves that governmental interest. The prevention of advertising keeps sexually explicit posters off the streets. But the regulation in this case fails to serve this interest narrowly.20 The ordinance, as written, prohibits even a simple sign announcing the existence of an adult theater. The sign posted by Basiardanes did no more. Such a restraint goes far beyond the City's legitimate interest. The absolute proscription of adult theater street advertising cannot be sustained.21
60
Our conclusion that the advertising ban is unconstitutional does not imply that Basiardanes can recover substantial damages for the violation of his rights. Damages may be recovered only upon a showing of actual injury. For a violation of the First Amendment unaccompanied by any real injury, a plaintiff may recover only nominal damages. Familias Unidas v. Briscoe, 619 F.2d 391, 402 (5th Cir. 1980). Accord: Kincaid v. Rusk, 670 F.2d 737, 746 (7th Cir. 1982); Murray v. Board of Trustees, 659 F.2d 77, 79 (6th Cir. 1981). See Carey v. Piphus, 435 U.S. 247, 98 S.Ct. 1042, 55 L.Ed.2d 252 (1978). Our review of the record fails to disclose that Basiardanes has shown any actual injury as a result of the advertising ban. We therefore hold that he is entitled only to nominal damages for the unconstitutional restraint of his commercial speech rights.22 We note, however, that an attorneys' fees award may be supported by an award of nominal damages since the successful claim serves to vindicate constitutional rights. Carey v. Piphus, 435 U.S. at 257 n.11, 98 S.Ct. at 1049 n.11; Milwe v. Cavuoto, 653 F.2d 80, 82 (2d Cir. 1981).
CONCLUSION
61
Cities have authority to use zoning to protect the living quality of their commercial and residential areas. The power to zone, however, may not overwhelm the guarantees of the Bill of Rights. A distaste for adult theaters, no matter how responsive it is to community values, is not a strong enough state interest to justify a massive incursion into the First Amendment rights of viewers and exhibitors of non-obscene completely lawful adult films. We conclude that Galveston has regulated protected speech without showing a sufficient interest to warrant the magnitude of the restraint accomplished.
62
To summarize, we hold, first, that Ordinance 78-1 unconstitutionally restricts the opening of adult theaters in Galveston, Texas. To the extent that Basiardanes was denied lease revenues because of the ordinance, he suffered compensable damages. Second, the ordinance's total prohibition of adult-theater advertising visible from the street impermissibly restrains commercial speech. For this constitutional violation, Basiardanes is entitled to nominal damages. Third, Basiardanes lacks standing to challenge Ordinance 78-1 for vagueness, and also lacks standing to challenge the permit scheme of the ordinance. The judgment of the district court is affirmed in part and reversed in part, and the case remanded.
63
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
1
The ordinance is set out as an appendix to the district court's opinion, reported in 514 F.Supp. at 983-85
2
The Texas Penal Code, Article 43.24 V.T.C.A. (1974), makes it an offense knowingly to sell to an individual younger than 17 material:
... whose dominant theme taken as a whole:
(A) appeals to the prurient interest of a minor, in sex, nudity, or excretion;
(B) is patently offensive to prevailing standards in the adult community as a whole with respect to what is suitable for minors; and
(C) is utterly without redeeming social value for minors.
3
Cf. Stansberry v. Holmes, 613 F.2d 1285, 1289-1290 (5th Cir. 1980) (holding that the terms "school" and "sexually oriented commercial enterprise" were not impermissibly vague when read in light of limiting conditions in the statute), cert. denied, 449 U.S. 886, 101 S.Ct. 240, 66 L.Ed.2d 112 (1980)
4
The Third Circuit has held that recipients of protected speech have standing to challenge restraints on speech only if the speaker himself is precluded from making the challenge. Frissell v. Rizzo, 597 F.2d 840, 848 (3d Cir. 1979), cert. denied, 444 U.S. 841, 100 S.Ct. 82, 62 L.Ed.2d 54 (1979). In Frissell, the plaintiff was a newspaper reader who alleged that the mayor of Philadelphia had withdrawn city advertising from local newspapers and thereby chilled the exercise of First Amendment rights. The Third Circuit acknowledged that newspaper readers' First Amendment rights were at stake. Nevertheless, the court held, on prudential grounds, that only the newspapers themselves could complain of the mayor's action
The Frissell court attempted to square its reasoning with Virginia State Board by arguing that the restrictions on pharmacists' advertising in that case created a "pharmacists' cartel, sheltered from competition, which sharply reduced the incentive for any individual pharmacist to oppose the regulations." 597 F.2d at 849. According to the Third Circuit, consumers were proper parties to litigate the restrictions on pharmacists' price advertising only because pharmacists themselves had little incentive to do so.
We must reject this narrow view of Virginia State Board. Not only does the Frissell court's view on standing appear nowhere in the Supreme Court's opinion, it also contradicts economic experience. Restraints on price advertising create entry barriers to new arrivals in the market. Advertising enables these new entrants to gain a foothold in an otherwise closed marketplace. Pharmacists who are fresh in a community would have every incentive to challenge an advertising ban. We are unwilling to assume that pharmacists are more timid than lawyers in this regard, see In Re R. M. J., --- U.S. ----, 102 S.Ct. 929, 71 L.Ed.2d 64 (1982) (challenge by an attorney to advertising restraints); Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977) (same). In our view, Virginia State Board 's holding on consumer standing may not be limited to situations in which the speaker is prevented from raising the First Amendment question.
5
Only two witnesses in the theater business testified at trial. Neither expressed an intent to open a new theater. James Ohmart, Vice-President of Theaters West, Inc., testified that his company had no plans to open a new adult theater in Galveston because a new theater would only compete with an existing theater, the Broadway, to which he supplied adult films. William Butler, the former manager of the Martini Theater in Galveston, testified that the Martini Theater had been affected by the Ordinance and did have an interest in showing adult films while open. He also testified, however, that the theater had closed almost two years before trial. There was no testimony that the Martini intended to reopen
6
The City argues that Basiardanes lacks standing to challenge Ordinance 78-1's dispersal provisions because Basiardanes sold his downtown building before trial. We reject this argument. Basiardanes claims monetary damages because Ordinance 78-1 denied him lease revenues while he owned the building. The out-of-pocket injury suffices to confer standing upon Basiardanes. See Duke Power Co. v. Carolina Environmental Study Group, Inc., 438 U.S. 59, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978) (litigant must have an injury-in-fact)
7
Were we to agree that Ordinance 78-1 is merely a time, place, and manner regulation, we would not apply the strict scrutiny test of Schad v. Borough of Mount Ephraim, supra. See Globe Newspaper Co. v. Superior Court, --- U.S. ----, ---- n.17, 102 S.Ct. 2613, 2620 n.17, 73 L.Ed.2d 248 (1982)
8
The regulation of adult theaters was part and parcel of an Anti-Skid Row Ordinance by which Detroit strived to prevent the concentration of businesses deemed likely to cause deterioration of adjacent areas. The other regulated uses included cabarets, establishments selling liquor, motels, pool halls, pawn shops, and shoeshine parlors. See American Mini Theatres, 427 U.S. at 53 n.3, 96 S.Ct. at 2444 n.3
9
See Note, Developments in the Law-Zoning, 91 Harv.L.Rev. 1427, 1557 (1978) ("In the wake of Mini Theatres, many municipalities enacted pornography zoning laws, usually imitating Detroit by requiring adult business to be dispersed")
10
Justice Powell separately concurred in the judgment in American Mini Theatres, thus furnishing the vote necessary for a majority of the Court. Nevertheless, Justice Powell expressly concurred in the portion of the plurality opinion noting that American Mini Theatres did not involve a significant restraint of speech or of viewer access to speech. See 427 U.S. at 73, 96 S.Ct. at 2453-54 (Powell, J., concurring in part to II of the Court's opinion); id. at 78-79, 96 S.Ct. at 2456-57 (the ordinance does not involve "any significant overall curtailment of adult movie presentations, or the opportunity for the message to reach an audience.")
11
One theater, the Broadway Theatre, continues to show X-rated films (those to which minors may not be admitted under the motion picture industry's own rules) under a grandfather clause in the ordinance
12
See American Mini Theatres, 427 U.S. at 71 & n.34, 96 S.Ct. at 2452-53 & n.34 (plurality opinion noting that Detroit's adult theater ordinance aimed at "the secondary effects"-nurturing crime and promoting blight-of concentrations of adult theater, and that such a goal must be accorded "high respect"); id. at 80, 96 S.Ct. at 2457 (Powell, J., concurring and noting that Detroit's ordinance served "important and substantial" interests)
13
We do not, of course, pass upon the obvious hypothetical undertaking to protect the opera house through condemnation of nearby areas under the power of eminent domain or by a narrowly drawn zoning ordinance protecting the immediate vicinity of the opera house from various undesirable businesses
14
Again, the ordinance in American Mini Theatres stands on a different footing. Detroit had dispersed regulated uses not including adult theaters for ten years in its Anti-Skid Row Ordinance before deciding to add adult theaters to the list of regulated businesses. 427 U.S. at 53-54, 96 S.Ct. at 2444-45. Detroit officials had thus made clear their concern with urban blight long before deciding to halt the adverse effects attributed to concentrations of adult theaters
15
Basiardanes has pointed to "Last Tango in Paris," which received an X-rating from the Motion Picture Association of America, and "Midnight Cowboy," which received an R-rating, as films that deal explicitly with sex in a fashion that may lead a state to shield them from minors, but whose very popularity negates any notion that they pose a threat to the health of a city. The ordinance at issue here does not refer to the film industry standards, and we do not rely on them in concluding that Ordinance 78-1 is unduly restrictive
16
The mayor of Galveston acknowledged that R-rated films, to which youths may be admitted only when accompanied by a parent or guardian, Erznoznik v. City of Jacksonville, 422 U.S. at 206 n.1, 95 S.Ct. at 2271 n.1, are not considered by the City Council to cause urban blight. While the R-rating has no relation to the standard of Ordinance 78-1, many films rated R could be subject to 78-1
17
It is, of course, well settled that a litigant who is up to the point of needing a permit has standing to challenge the permit scheme even without applying for a permit. Freedman v. Maryland, 380 U.S. at 56, 85 S.Ct. at 737-38; Beckerman v. City of Tupelo, 664 F.2d 502, 625 (5th Cir. 1981). Not every anticipatory challenge to a permit scheme, however, is justiciable. For example, in Fernandes v. Limmer, 663 F.2d 619 (5th Cir. 1981), we held that the plaintiff had standing to challenge a scheme for granting permits even though she had not applied for one, but denied her standing to challenge the scheme for revoking permits. We reasoned that the threat posed by the revocation scheme was too contingent to confer standing upon a litigant who had not yet obtained a permit. 663 F.2d at 626
18
The court commented in a footnote, however, that it viewed the advertising ban as "patently unconstitutional." 514 F.Supp. at 979 n.8
19
Basiardanes need not have flouted Ordinance 78-1 in order to have standing to challenge it. Laws restraining First Amendment rights may be challenged by those who allege a desire to engage in the proscribed or regulated activities although they have not yet done so. Beckerman v. City of Tupelo, 664 F.2d 502, 506 (5th Cir. 1981). For example, in Hynes v. Mayor of Oradell, 425 U.S. 610, 96 S.Ct. 1755, 48 L.Ed.2d 243 (1976), plaintiffs alleged that they wished to campaign door-to-door, but made no allegation that they had actually begun to campaign in this manner. Nevertheless, the Supreme Court allowed them to challenge an ordinance requiring a permit before one could canvass door-to-door
20
The Mayor of Galveston acknowledged as much at trial;
Question: And isn't it true that this portion of the ordinance isn't directed at, say garish signs; it is directed at all signs that have nothing to do with urban blight, nothing to do with signs that are distasteful to the public?
Answer: I would say so.
Question: This paragraph really goes far beyond the intentions of City Council; isn't that true?
Answer: I would guess it does.
21
If Galveston adopted its ban on advertising as a means to prevent people from attending adult films, the ban is flatly invalid. A city cannot restrict truthful commercial speech because the city "is fearful of that information's effect on its disseminator and its recipients." Metromedia, Inc. v. City of San Diego, 101 S.Ct. at 2191 (plurality opinion); Linmark Associates v. Willingboro, 431 U.S. at 96, 97 S.Ct. at 1620 (striking down a ban on "for sale" signs on property, which ban was designed to stem racial blockbusting). Galveston must aim at legitimate and substantial purposes when restricting commercial speech
22
Basiardanes' claim that Ordinance 78-1 cost him lease revenues stands on different footing, however. We express no opinion here on the extent of those damages other than to indicate that elements of actual damages are revealed by the record | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2459511/ | 516 S.W.2d 167 (1974)
John Craner JACKSON, Appellant,
v.
The STATE of Texas, Appellee.
No. 48900.
Court of Criminal Appeals of Texas.
November 20, 1974.
Rehearing Denied December 18, 1974.
*169 James P. Finstrom and Kerry P. Fitzgerald, Dallas (both Court-appointed), for appellant.
Henry Wade, Dist. Atty., W. T. Westmoreland, Jr., Asst. Dist. Atty., Dallas, and Jim D. Vollers, State's Atty., Austin, for the State.
OPINION
ONION, Presiding Judge.
This appeal arises out of a conviction for the offense of murder with malice. After returning a verdict of guilty, the jury assessed appellant's punishment at confinement in the Texas Department of Corrections for life.
Some of the more salient facts must be detailed before considering appellant's grounds of error in view of the extremely complex nature of the case. Jan Hein and *170 Patsy Shelton, two employees of Memorex Corporation, opened said corporation's office in Farmers Branch in Dallas County about 8:30 a. m. on August 23, 1971. Upon entering the office, they discovered what were later shown to be bloodstains on the walls, carpet and furniture. At approximately 9:45 a. m. Police Officer Martin Brown of Farmers Branch began an investigation which culminated about 7:30 p. m. that same day with the discovery of the body of Billie C. Barnes. Barnes' body was discovered locked in the truck of his car which had been left in the parking area at Love Field Airport. Investigators from the Dallas County Sheriff's Office later located a fingerprint inside the door handle positioned immediately to the left of the driver's seat. This fingerprint was identified by James Cron, a fingerprint expert employed at the Dallas County Sheriff's Office, as being made by appellant's left thumb. Appellant was arrested some seven months later in California and returned to Dallas for trial.
At trial the witness Robert Overton, a Memorex employee then in the process of moving to California to begin new employment, testified that he was present at the Memorex office with appellant (then known to him as Larry Patterson) on the night of August 22, 1971. While they were both present, the deceased (Barnes) arrived and entered Overton's office. After a brief discussion, Overton left his office and walked some thirty-five or forty feet down a hallway when he heard a dull, metallic sound and then heard the deceased say, "Bob, you can't do that to me." Overton returned to his office and saw Barnes lying on the floor bleeding profusely from his head. After helping appellant load the body into Barnes' automobile, Overton assisted appellant in an effort to clean up the bloodstains. During this time appellant remarked that, "He (Barnes) must be Sicilian. He had a hard head." Overton then accompanied appellant to the airport where, after they had abandoned the deceased's automobile, he boarded a flight to San Francisco. Appellant remained in Dallas until the following day.
Through the testimony of Overton and of another witness, Mark Enright, the State proved that appellant was hired to kill Barnes by a Eugene Oliver. Oliver was the president of Memorex Corporation, which was then engaged in attempting to market a computerized device designed to improve a person's golf game. This product was to be promoted by a prominent professional golfer who had allowed his name to be used to promote the enterprise. For a number of reasons not here important, Memorex was in dire financial straits. During this time Barnes had threatened to persuade the professional golfer to remove his name from the sales promotion. Barnes, a former stockholder and executive of Memorex, was still covered by a Memorex "key man" life insurance policy in the amount of $200,000. In addition, there was considerable personal animosity between Oliver and Barnes which had resulted in threats by Barnes against Oliver, his family and his home.
This situation provoked Oliver, who also was indicated for this murder but tried separately, to inquire of Enright if he knew someone who would kill Barnes for him. Subsequently, Enright introduced appellant to Oliver. Enright testified that he did not believe Oliver was capable of committing such a crime and that the introduced appellant to him in order to gain time to dissuade him. The trial court submitted to the jury the fact issue of whether Enright was an accomplice witness, but declined to charge that he was an accomplice witness as a matter of law.
Overton returned to Dallas from San Francisco shortly after the murder but was not prosecuted for his role in the crime (luring Barnes to the Memorex offices and participating in the coverup) in return for his cooperation with the police and prosecutors. The trial court charged that he was an accomplice witness as a matter of law.
*171 At the conclusion of the State's case, appellant took the witness stand in his own behalf and admitted killing Barnes, but he claimed that he did so in self-defense. Appellant testified that he had gone to the Memorex office to persuade Barnes to refrain from blackmailing Oliver. According to appellant, Barnes became violent and attacked him, whereupon he struck Barnes on the head first with a three-hold paper punch and then with a plastic satchel containing a length of pipe. Appellant had brought the satchel or plastic bag containing the pipe with him due to a "premonition that there might be trouble." Appellant testified that all blows struck by him were in self-defense.
Appellant's first ground of error contends that there was insufficient evidence to corroborate the accomplice witness testimony. In determining the sufficiency of the corboration, it is necessary to eliminate the evidence of the accomplice witness and examine the remaining evidence to ascertain if there be inculpatory evidence or evidence of incriminating character which tends to connect the appellant with the commission of the offense. See, e. g.; Rodriquez v. State, 508 S.W.2d 80 (Tex.Cr.App.1974); Cherb v. State, 472 S.W.2d 273 (Tex.Cr.App.1971); Rogers v. State, 461 S.W.2d 399 (Tex.Cr.App.1970). See also: Article 38.14, Vernon's Ann.C.C. C.P. However,
"The law forbidding a conviction upon the uncorroborated testimony of an accomplice does not demand that there be direct evidence pointing to the accused as the offender, but merely requires that there be `other evidence tending to connect the defendant with offense committed.'" Minor v. State, 108 Tex. Crim. 1, 299 S.W. 422 (1927). Quoted with approval in Edwards v. State, 427 S.W.2d 629 (Tex.Cr.App.1968), and Miller v. State, 507 S.W.2d 203 (Tex.Cr.App. 1974).
In addition to holding that circumstantial evidence is sufficient to corroborate an accomplice witness, we have also held, "It is the combined cumulative weight of the evidence which supplies the answer to the test." Chambers v. State, 508 S.W.2d 348 (Tex.Cr.App.1974).
Looking then to the corroborating evidence, we find appellant's fingerprint on the inside door handle next to the driver's seat of the deceased's car (the trunk of which contained his body). There is also evidence tending to prove flight by appellant after commission of the offense.[1] Appellant left Dallas the day following the night Barnes was murdered. He then remained in California for seven months where, although he used his own name, he made no attempt to contact his family or relatives, failed to obtain a new license plate for his automobile or to use gasoline credit cards which could reveal his whereabouts. In Edwards v. State, 427 S.W.2d 629 (Tex.Cr.App.1968), we held that such an "immediate journey ... may reasonably be considered as flight," Edwards at p. 633.
Finally, there is appellant's judicial confession as to the killing, although he testified it was not murder because he had acted in self-defense. It is well established that appellant's admission or confession, under most circumstances, will be sufficient to corroborate the accomplice witness. We reject any contention that the appellant's testimony must be excluded in ascertaining the sufficiency of the evidence to corroborate the accomplice witness because he testified he acted in self-defense. We conclude the evidence was clearly sufficient to corroborate the accomplice witness without any consideration of the witness Enright's testimony.
Next, appellant complains that the trial court erred in submitting to the jury the fact issue of whether the witness Mark *172 Enright was an accomplice witness because, according to appellant, he was an accomplice witness as a matter of law. Although Enright introduced appellant and Eugene Oliver, after Oliver inquired about someone to kill Barnes, Enright also testified that he made such introduction in an effort to gain time to convince Oliver not to go through with the crime. His testimony was that he did not willingly participate in the crime. In Allen v. State, 461 S.W.2d 622 (Tex.Cr.App.1970), we held:
"... where there is any doubt as to the fact that a given witness is an accomplice witness and such fact issue is submitted to the jury, such procedure is sufficient even though the evidence appears largely to preponderate in favor of the fact that such witness is an accomplice as a matter of law." Allen at p. 625. Accord: Dears v. State, 506 S.W.2d 606 (Tex.Cr.App.1974); Zitterich v. State, 502 S.W.2d 144 (Tex.Cr.App. 1973); Van Buskirk v. State, 492 S.W.2d 279 (Tex.Cr.App.1973); Lopez v. State, 92 Tex. Crim. 97, 242 S.W.2d 212 (1922).
Under the holdings of these cases, we cannot say that the trial court erred in refusing to charge that Enright was an accomplice witness as a matter of law.
Ground of error number three also pertains to the court's charge. Appellant contends that he was entitled to a charge on the lesser included offense of aggravated assault. This court has held that in cases where death was caused by a weapon that was not deadly per se or deadly in the manner of its use and where the evidence raises a lack of intent to kill the appellant is then entitled to a charge on aggravated assault. See e. g., Matheson v. State, 508 S.W.2d 77 (Tex.Cr.App.1974). In Corbett v. State, 493 S.W.2d 940 (Tex.Cr.App. 1973), a weapon not deadly in the manner of its use was held to be "one which in the manner of its use, is not ordinarily calculated to produce death." Corbett at p. 951. See also: Boazman v. State, 501 S.W.2d 894 (Tex.Cr.App.1973), which stated that whether a weapon was deadly in the manner of its use could be ascertained from "the mode and manner in which it is used, along with the wounds inflicted on the injured party ..." Boazman at p. 896. Like the instant case, Corbett involved a murder in which the deceased was bludgeoned to death by blows from a length of pipe. In Corbett we held that refusal to charge on aggravated assault was not error. The same result should obtain in this case.
Appellant attacks the indictment for its failure to sufficiently allege the means used in the commission of the offense and complains of the court's action in overruling his motion to quash. The one court indictment alleged the appellant killed Billie C. Barnes "by beating and striking him with an instrument the exact nature and description of which is to the Grand Jurors unknown."
"The means used to commit the charged offense should be alleged; if not known, that fact must be stated. An averment that the accused killed the deceased in some manner and by some means, instruments or weapons to the grand jurors unknown is sufficient." 29 Tex.Jur.2d, Homicide, Sec. 128, p. 150.
The grand jury, of course, must use reasonable diligence to ascertain the nature of the instrument which causes death. Anderson v. State, 479 S.W.2d 57 (Tex.Cr.App.1972). L. B. Strange, foreman of the grand jury, testified that the nature of the instrument causing death was unknown and that a proper effort through detectives had been made to determine its description.
Appellant complains that Overton was not called to appear before the grand jury, but his testimony showed he was not an eyewitness to the actual killing and did not know what instrument had been used His appearance would not have thus aided the grand jury. Appellant also seizes upon *173 the testimony of Dr. Petty, the medical examiner, that the blows to the deceased's head were made "with some kind of a semi-sharp or blunt instrument," and it appears that the grand jury did not attempt to obtain the autopsy report in its quest for a description of the instrument used. The autopsy report is not in the record, and it is not reflected such report contained the medical examiner's description of the instrument. While it might have been better practice to have called the doctor before the grand jury, it is observed that he also testified he could not be specific "nor specifically state the nature of the instrument that caused the wounds," and that forensic pathology is "an inexact science." If it be appellant's contention that the words "blunt and semi-sharp" should have preceded the word "instrument" in the indictment, we reject such contention and fail to see how such omission could have harmed the appellant in any material way. It is clear from the evidence that the precise manner and means were left uncertain until the appellant testified he killed the deceased with a pipe. A similar contention to appellant's was raised in Corbett v. State, 493 S.W.2d 940, 952 (Tex.Cr.App.1973), and decided adversely to the position he takes. See and compare Cavazos v. State, 365 S.W.2d 178, 180 (Tex.Cr.App.1963).
By his next two grounds of error, appellant asserts that the trial court erred in admitting hearsay statements of co-conspirators Overton and Enright prior to the existence of any conspiracy and in admitting hearsay statements of the deceased. The single ground of error relating to hearsay statements by Overton and Enright complains of at least twenty-seven separate instances of improper admission of such hearsay. The ground of error relating to hearsay statements by the deceased encompasses at least three separate instances. Our study of appellant's brief and of the record reveals that a number of these statements were admissible, but, more significantly, it fails to reveal precisely how appellant was prejudiced. For present purposes, however, we decline to ferret out and examine each complained of statements since these two grounds of error are clearly multifarious and thus not in compliance with Article 40.09, Sec. 9, Vernon's Ann.C.C.P. As we said in Hinkle v. State, 442 S.W.2d 728 (Tex.Cr.App.1969),
"A general and multifarious assignment of error has been expressly held to be improper. The brief, in assigning error, must state the grounds separately." Hinkle at p. 734. See also: Akridge v. State, 493 S.W.2d 928 (Tex.Cr.App. 1973); Ames v. State, 499 S.W.2d 110 (Tex.Cr.App.1973).
Appellant's seventh ground of error challenges the entirety of Robert Overton's testimony as being incompetent. The basis for this challenge is an interview of Overton conducted while he was under the influence of the drug sodium amytal, often described as a "truth serum." Upon his return from California, Overton made several extensive statements to the investigating officers which recounted various details of the murder. Subsequent to these statements, he was given injections of sodium amytal and interviewed by Dr. James P. Grigson, a psychiatrist. During this interview Overton recalled appellant's statement that Barnes must have been Sicilian since he had a hard head. At a pretrial hearing on a motion to suppress his testimony, Overton stated that he had no independent recollection of this remark until he listened to a tape recording of the sodium amytal interview. Overton testified that this had the effect of refreshing his recollection. He also acknowledged that the statement was correct. The trial court then denied the motion to suppress Overton's testimony.
Initially, we note that when Overton testified at trial there was no objection to his testimony as being incompetent. Appellant also concedes that the trial court has great discretion in determining the competency of witnesses. From our study of appellant's brief we have concluded that the real *174 thrust of his argument is aimed at appellant's remark about Barnes having a hard head. Indeed, it must be so since the rest of Overton's testimony before the jury was not confined to statements first made while under sodium amytal. The difficulty with this position for appellant is that there was no specific objection at trial to the statement of which he now complains. Moreover, the sodium amytal interview was never alluded to before the jury and appellant's testimony during that interview was never introduced. Under these circumstances, we are unable to say that the trial court abused its discretion in admitting Overton's statement.
In the course of his jury argument at the guilt or innocence stage of the trial, the prosecutor attacked appellant's claim that he killed Barnes in self-defense by arguing that this theory was recently conceived for use at trial. Appellant now advances a ground of error asserting that such argument was outside of the record. The record reveals that the following transpired during the State's cross-examination of appellant.
"Q (Mr. Ormesher) Now in connection with this case, will you tell the jury who the first person was after you were arrested that you told this self defense story to?
"MR. FINSTROM: I would object to that. I believe I was the first person and it would be a privilege (sic) communication. We would object on that basis unless the attorney in asking that had something else in mind.
"THE COURT: Overruled. He would know which one he talked to about it.
"THE WITNESS: I just can't recall.
"Q You didn't tell me about it did you?
"A No.
"Q And you didn't tell Johnny Webb about it?
"A No.
"Q Do you remember Pat Boyd?
"A Who?
"Q Pat Boyd?
"A I remember a Mr Boyd that brought me back on the plane.
"Q That's the one.
"A I don't believe I told him anything about it.
"Q You didn't tell him any story about self defense did not John Craner Jackson?
"A No.
"Q But you told him you killed him didn't you?
"A I don't recall that.
"Q If he testified to that I guess he's lying too?
"A Not at all. Except for you and Johnny Webb in California and my attorney there has never been a time when anyone asked me if I killed a man regardless of circumstances and I said yes I killed him.
"Q But you didn't tell him anything about self defense did you John Craner Jackson?
"A I don't recall telling him how I killed him."
On the basis of this portion of the record, it appears that the argument was adequately supported by the testimony and the inferences which might be justifiably drawn from it.
Ground of error number nine also presents a claim of improper argument. During this argument at the guilt or innocence phase of the trial, the prosecutor stated: "Ask yourselves why Sargent Charles Ripley of the Los Angeles Police *175 Department knows John Craner Jackson, why he was looking at him and watching him on January 5th with a felony warrant?" Appellant now contends that this argument implied he had committed some extraneous offense. Yet at trial his objection was, "Your Honor we object to his argument before the jury going behind the testimony of this witness other than the way it was presented." This somewhat nebulous objection did not adequately inform the trial court of the complaint now urged on appeal. The failure to make a specific objection to the issue raised on appeal precludes our review. Campbell v. State, 492 S.W.2d 956 (Tex.Cr.App.1973).
By his tenth ground of error appellant contends that he was denied his attorney-client privilege. Although this ground of error has two distinct components making it multifarious, we are able to discern and evaluate both of them. First, appellant states that prosecution questions regarding a conversation he had with the attorney Fred Burner denied his attorney-client privilege. Attorney Bruner, however, represented Eugene Oliver and never represented appellant; therefore, the attorney-client privilege never existed between them. Even if there was a fact issue raised as to whether Burner was appellant's attorney, the trial court's determination of such issue was within its discretion and will not be disturbed on appeal. Maldonado v. State, 425 S.W.2d 646 (Tex.Cr. App.1968).
Appellant also complains of a denial of his attorney-client privilege as to his counsel James P. Finstrom. After appellant testified that he acted in self-defense, he was cross-examined as follows:
"Q Now in connection with this case, will you tell the jury who the first person was after you were arrested that you told this self defense story to?
"MR. FINSTROM: I would object to that. I believe that I was the first person and it would be a privilege (sic) communication. We would object on that basis unless the attorney in asking that had something else in mind.
"THE COURT: Overruled. He would know which one he talked to about it.
"THE WITNESS: I just can't recall."
Inasmuch as appellant's attorney's objection volunteered the very information he was attempting to keep from the jury, we are unable to perceive that appellant has been harmed.
Appellant's next two grounds of error assert that the State was improperly allowed to impeach its own witnesses. The general rule, of course, is that the State may not impeach its own witness unless it shows the testimony to be harmful to its case and that such testimony was unexpected or a surprise. See, e. g., Wood v. State, 511 S.W.2d 37 (Tex.Cr.App.1974). In the instant case, appellant directs one ground of error to the State's being allowed to show that Robert Overton gave prior inconsistent statements before his testimony at trial. The other ground of error asserts that the State was improperly allowed to show that Mark Enright gave prior inconsistent statements and had been convicted of a felony: mail fraud. The general rule, however, has no application to either of these situations because the State was not impeaching its own witnesses.
"... the term `impeachment' is broadly used to connote any attempt to discredit the testimony of a witness, it is also used in the narrower sense of such an attack on the credibility of a witness that for the first time evidence as to his credibility becomes admissible." 62 Tex.Jur.2d, Witnesses, § 221, p. 154 (1965). See also: Brown v. State, 475 S.W.2d 938, 952 (Tex.Cr.App.1971).
*176 Clearly the State was not attacking the credibility of these two witnesses; indeed, its case was dependent upon the jury's believing the truth of their trial testimony.[2] Therefore, the two grounds of error are without merit.
Appellant's thirteenth and final ground of error is directed to what appellant claims is the erroneous admission of hearsay statements of co-conspirators. This contention is similar to the two grounds of error complaining of hearsay testimony which have already been considered. Like them, it too is multifarious and fails to comply with Article 40.09, Sec. 9, Vernon's Ann.C.C.P. This ground of error enumerates at least twenty separate instances of such alleged hearsay in addition to "hearsay too extensive to list in detail." As stated before, such failure to comply with Article 40.09, supra, precludes appellate review.
For the reasons stated, the judgment is affirmed.
NOTES
[1] Flight alone, of course, would not be adequate corroboration. Ysasaga v. State, 444 S.W.2d 305 (Tex.Cr.App.1969); Nolley v. State, 368 S.W.2d 218 (Tex.Cr.App.1963).
[2] McCormick and Ray's treatise states three "policy reasons" for the rule prohibiting a party from impeaching his own witness: (1) That a party is bound by the statements of his witnesses. (2) That a party guarantees his witness' general credibility. (3) That a party should not have the means to coerce his own witness. See 1 C. McCormick & R. Ray, Texas Law of Evidence, § 631, p. 479 (2d ed. 1956). The fact that none of these policy reasons is offended by the State's questions to the two witnesses further indicates that no impeachment of them was being attempted. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2459549/ | 392 S.W.2d 385 (1965)
Terry Earl BROGDON, Appellant,
v.
Doris BROGDON, Appellee.
No. 16651.
Court of Civil Appeals of Texas, Fort Worth.
June 11, 1965.
Rehearing Denied July 16, 1965.
Friberg & Parish and Elmer H. Parish, Wichita Falls, for appellant.
John E. McKelvey, Electra, for appellee.
MASSEY, Chief Justice.
This is an appeal from an order denying appellant's motion for reduction of child support payments.
Appellee was granted a divorce from appellant in March, 1961. She was awarded custody of the three young children. Appellant was ordered to pay $300 per month child support, and to pay the balance due on an automobile which was awarded to the appellee.
On June 6, 1961, at appellant's request, the support payments were reduced to the sum of $200 per month until the appellant paid the balance of $2,913 due on the automobile. The judgment provided for resumption of $300 per month support payments when the automobile payments were completed.
In December, 1964, appellant filed a motion for reduction of the $300 per month support payments on the ground that he *386 could not pay said amount because of greatly reduced income. His request was denied.
Appellee testified she was employed at a salary of $250 per month. She was "barely" able to support the children on the $200 monthly support payments and her salary.
Appellant testified: his income, because of decreased prices for cattle and diminishing income from oil royalty, dropped from $18,000 in 1960 to $4,100 in 1964; the combined income of appellant and his present wife was $3,485.60 in 1962, and of that amount his wife earned $2,300; in 1963 the combined income was $6,000, of which $2,157 was earned by his wife; his wife will lose her job in January; he owns some farm and ranch land, all of which is heavily mortgaged; the price of cattle declined fifty per cent for 1963; operating expenses, however, are rising; Production Credit Co. has a lien on his cattle and equipment to secure an $18,000 indebtedness; he is required to pay over to the Credit Company all proceeds of cattle sales; during current year he borrowed $500 from his mother and $1,000 from his father-in-law for living expenses; he is going "deeper in debt" all the time and if required to pay $300 per month child support will "just go that much deeper."
The appellate court will not disturb the trial court's child support order unless there is a clear abuse of discretion. Brito v. Brito, 346 S.W.2d 133 (El Paso Civ.App., 1961, ref., n. r. e.); Madden v. Madden, 365 S.W.2d 427 (Fort Worth Civ.App., 1963, no writ hist.); Beaird v. Beaird, 380 S.W.2d 730 (Dallas Civ.App., 1964, no writ hist.).
The amount of support in cases of this kind is always dependent not only upon the needs of the child but upon the ability of the parents to contribute. Art. 4639a, Vernon's Ann.Tex.Civ.St.
In determining the duty of the father to supply necessaries to his children after divorce, it is to be borne in mind that his duty corresponds to his financial ability, having due regard to all his lawful obligations. Gully v. Gully, 111 Tex. 233, 231 S.W. 97, 15 A.L.R. 564 (1921); Barlow v. Barlow, 282 S.W.2d 429 (El Paso Civ.App., 1955, no writ hist.); Angel v. Todd, 368 S.W.2d 224 (Houston Civ.App., 1963, no writ hist.).
Appellee did not in this case contradict, deny or rebut any part of appellant's testimony concerning his financial condition, nor did she attack his credibility.
Appellant's testimony that his income dropped from $18,000 in 1960 to $4,100 in 1964 was undisputed, as was his testimony as to increased expenses, debts, mortgages, etc.
If his testimony were true, and it was not disputed, contradicted or rebutted, it is manifest appellant was financially unable to pay $300 per month, taking into account his financial condition, the needs of the children, and all circumstances shown in the record.
However, in our opinion, the trial court was entitled to disbelieve the testimony of appellant, he being an interested party and such evidence having a character which appellee could not readily rebut. Obviously he did disbelieve it.
Judgment affirmed.
RENFRO, J., dissents.
RENFRO, Justice (dissenting).
In my opinion the appellant was, under the undisputed evidence, entitled to some reduction in support payments. I would reverse and remand. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584169/ | 172 P.3d 1286 (2007)
2007-NMCERT-010
DURHAM
v.
GUEST.
No. 30,656 (COA 26,123).
Supreme Court of New Mexico.
October 29, 2007.
Writ Granted. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584206/ | 172 P.3d 1286 (2007)
2007-NMCERT-010
STATE
v.
BILLINGTON.
No. 30,676 (COA 27,469).
Supreme Court of New Mexico.
October 25, 2007.
Denials of Certiorari. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/294890/ | 438 F.2d 441
UNITED STATES of America, Appellee,v.Roy Lee CRAWFORD, Appellant.
No. 20310.
United States Court of Appeals, Eighth Circuit.
Feb. 17, 1971.
Ivan E. Barris, Joseph W. Louisell, Detroit, Mich., for appellant.
Robert G. Renner, U.S. Atty., Neal J. Shapiro, Asst. U.S. Atty., Minneapolis, Minn., for appellee.
Before VAN OOSTERHOUT and HEANEY, Circuit Judges, and HANSON, District judge.
HEANEY, Circuit Judge.
1
Roy Crawford was convicted on all four counts of an indictment charging him with the sale of cocaine and heroin to a government informant on September 26 and September 30, 1969, in violation of 26 U.S.C. 4704(a) and 4705 (a). He was sentenced to ten years on each count, the sentences to run concurrently.
2
Crawford contends on appeal that the trial court erred in (1) permitting the prosecution to cross-examine the defendant about his association with persons who were addicts or convicted drug sellers, (2) admitting evidence of and allowing the prosecutor to comment upon Crawford's alleged sales of narcotics to the Government informant on occasions other than those charged in the indictment, and (3) refusing to permit the defense counsel to ask the government informant whether or not she had some hope of leniency by virtue of the testimony she was giving against the defendant.1
3
The government established its case through the informant Geraldine Parker, and Special Agents of the Bureau of Narcotics and Dangerous Drugs. Mrs. Parker, a confessed addict and drug dealer, was arrested on September 25, 1969, for selling heroin to a Special Agent. In return for preferential treatment, she agreed to cooperate with the government in building a case against Crawford. At trial, Mrs. Parker testified, over defense objections, that her husband had purchased heroin and cocaine from Crawford on a regular basis from March, 1967, to September, 1969, and that she had purchased narcotics from Crawford on about six occasions during the same period. She stated that the drugs had either been used by her or her husband, or had been resold to others. Mrs. Parker testified that she purchased heroin and cocaine from Crawford on September 26 and September 30, 1969. Her testimony with respect to these purchases was corroborated by Special Agents who observed the contact between Mrs. Parker and Crawford on both dates. The agents testified that they gave Mrs. Parker money to make the purchases, searched her before the contact, and received narcotics from her after the contact.
4
Crawford, who took the stand on his own behalf, testified that he had known Sam Parker since 1967, but that he first met Mrs. Parker on September 26, 1969. He stated that Mrs. Parker had sought to purchase narcotics from him on that date but that he had told her he knew nothing about narcotics. He denied meeting Mrs. Parker on September 30. Crawford's direct examination ended with the following colloquy:
5
'Q. Mr. Crawford, have you at any time sold narcotics, transferred narcotics to either Geraldine Parker or Sam Parker? A. No, I haven't. 'Q. Have you ever in your life had occasion to handle in any way-- for profit or otherwise-- narcotics? A No. 'Q. Have you ever in your lifetime been convicted of a crime? A. No.'
6
He was asked the following questions on cross-examination:
7
'Q. Mr. Crawford, do you know any people who are either drug addicts or who have been convicted of selling drugs, or do sell drugs? * * * '* * * A. No. I know some people. Whether they sell drugs or not, I don't know. 'Q. Well, do you know Samuel Parker? A. Yes, I know Sam Parker. 'Q. And has Sam Parker ever been at your house? 'A. Yes. 'Q. Do you know Geraldine Parker? A. I met Geraldine Parker in (pause) 'Q. But you do know her? A. Yes, I know her. 'Q. Now, I am sure you are aware that Samuel Parker has pled guilty to the possession of narcotic drugs? A. No. 'Q. Do you know that Sam Parker has indicated and petitioned the United States Attorney indicating that he is a drug addict and requesting that he be committed to Lexington, Kentucky? A. I do now. I didn't then. 'Q. You heard Geraldine Parker admit that she was a drug addict? A. Yes. 'Q. You heard Geraldine Parker admit that she sold drugs? A. Yes. 'Q. Do you know any other drug addicts or people who sell drugs? A. * * * I know some other people, but as far as their drug addiction, I have no knowledge of it. 'Q. Do you know a man named Freddie Golden? 'A. Yes, I know Freddie Golden. 'Q. You know that Freddie Golden-- has he ever been at your house? A. Yes, he has been at my house. 'Q. Do you know that Freddie Golden about six weeks ago one court room over was convicted of selling drugs? 'A. No, I didn't know that. 'Q. You didn't know that. Do you know a man named Joe Tanksley? A. Yes, I know Joe. 'Q. Has he ever been at your house? A. No. 'Q. Now, do you know that Joe Tanksley about two weeks ago pled guilty in the United States District Court in St. Paul for the sale of drugs? A. No, I didn't know that. 'Q. Do you know a man named Carl Boyd? 'A. Yes, I knew Carl Boyd. 'Q. Do you know that Carl Boyd has a record for usage of drugs? A. No. 'Q. Did you know that he was convicted in 1952 for the sale of heroin in the United States District Court? A. No, I didn't. 'Q. Mr. Crawford, do you know a man named Bobby Bannarn? A. Yes, I know Bobby Bannarn. 'Q. You know he has got a record for possession of narcotic drugs? A. No, I didn't.' An unsuccessful objection to the above line of questioning was taken at an early point in the cross-examination.2
We turn first to:
THE CROSS-EXAMINATION OF CRAWFORD
8
We hold that the trial court exceeded its discretion in permitting the government to cross-examine Crawford with respect to his alleged acquaintance with Golden, Tanksley, Boyd and Bannarn, who were identified in the questioning as having been convicted for the possession or sale of drugs.
9
The questions prejudiced the defendant in the eyes of the jury by insinuating that he was a member of a ring of narcotics users and peddlers. Whatever the truth of the insinuations, it was not proper to raise and explore the issue in this manner.
10
The defendant, by testifying that he had not met Mrs. Parker until September 26 and that he had never sold narcotics to her or her husband, opened himself to a searching examination of his dealings with them in narcotics. But testimony with respect to the Parkers and his denial that he handled narcotics did not place his general character in issue, so as to permit cross-examination into matters beyond the scope of the direct examination which the prosecution could not prove on direct examination and which tended to prejudice the defendant.3 Specifically, he did not open the door to questions regarding his association with unsavory characters, i.e., convicted drug users, possessors and sellers.4
11
This holding establishes no new principle. We follow a long line of precedents in which we have held that it is improper to ask a defendant, who has not placed his general character in issue, whether he has been previously arrested,5 jailed,6 indicted,7 convicted of a crime other than a felony,8 whether he has committed acts of misconduct,9 or whether he is in possession of stolen property other than that which is the subject of the prosecution.10
12
The government argues that the defendant 'opened the door' to the cross-examination in question by his direct testimony. While we agree that a defendant can open the door to otherwise impermissible cross-examination by his direct testimony, we do not believe that the cross-examination can be so justified in this case. In our view, cross-examination in response to statements of the defendant made on direct examination must either clarify the point raised or tend to directly impeach the defendant on that point. The cross-examination here did neither. It merely threw a shroud of suspicion over the defendant and his knowledge of the drug traffic.11
13
The cases cited by the government are distinguishable on their facts on this basis.
14
In Hayes v. United States, 407 F.2d 189 (5th Cir. 1969), the defendant had testified in his direct examination that:
15
'One day I left (prison) and went back about three or four months later and they marked up an escape against me, and they still turned me outside even then. I was never locked up.'
16
In light of this testimony, the prosecutor was allowed to ask the defendant whether he had escaped from prison. The question was one of mere clarification.
17
In United States v. Whiting, 308 F.2d 537 (2nd Cir. 1962), the prosecutor was permitted to question the defendant about a non-felony conviction in the military, where earlier, on direct examination, the defendant had made the bald assertion that he had never been convicted of a crime. The cross-examination directly refuted the defendant's testimony and was thus a permissible attack on his credibility.
18
The defendant in Burrows v. United States, 371 F.2d 434 (10th Cir. 1967), testified in his defense that he had been in Des Moines, Iowa, in order to join the Marine Corps and had then decided to travel to California for that purpose. While the facts in the case are briefly drawn, it appears that the prosecutor, in subsequent cross-examination, sought to show that the defendant had actually been in Des Moines for a parole violation investigation and that such a violation would disqualify the defendant from the Marine Corps. It is clear that the prosecutor's line of questioning tended to directly impeach the defendant's testimony concerning the reason for his presence in Des Moines. For this purpose, we would have permitted the cross-examination.
19
The last case cited by the government is United States v. Taylor, 312 F.2d 159 (7th Cir. 1963). There, the defendant was charged with facilitating the sale of narcotics. A government agent testified that the defendant, when arrested, admitted his guilt stating that he had allowed his apartment to be used for the sale in hopes of obtaining a portion of the narcotics for himself. The defendant denied making such a statement in direct testimony and was then cross-examined as to whether he was a drug addict. Here, we think the cross-examination was proper. It showed a motive for the admissions attributed to the defendant and discredited his denial of these admissions.
20
The government next argues that even if the cross-examination of Crawford was error, we should not reverse because it was harmless error as defined by Rule 52(a), Fed.R.Crim.P.
21
We do not agree. The government case was of sufficient strength to support the jury's verdict but the prejudicial impact of the improper cross-examination was so severe as to require reversal.
22
Our Court has long taken a jaundiced view of the harmless error argument in this context:
23
'When, in the prosecution of a defendant, counsel for the government indulges in unfair and improper cross-examination, the only purpose of which is to degrade the defendant and to prejudice the jury against him, the government, upon appeal, will not ordinarily be heard to say that the methods which were used did not have the effect which they were obviously intended to have.'
24
Salerno v. United States, 61 F.2d 419, 424 (8th Cir. 1932). See also, Little v. United States, 93 F.2d 401, 408 (8th Cir. 1937), cert. denied, 303 U.S. 644, 58 S.Ct. 643, 82 L.Ed. 1105 (1938); Echert v. United States, 188 F.2d 336, 341 (8th Cir. 1951); United States v. Pennix, 313 F.2d 524, 531 (4th Cir. 1963).
25
In our view, the proper test for us to apply was set out in Kotteakos v. United States, 328 U.S. 750 at 764, 66 S.Ct. 1239 at 1247, 90 L.Ed. 1557 (1946):
26
'* * * The question is, not were (the jurors) right in their judgment, regardless of the error or its effect upon the verdict. It is rather what effect the error had or reasonably may be taken to have had upon the jury's decision. The crucial thing is the impact of the thing done wrong on the minds of other men, not on one's own, in the total setting.'
27
See also, Krulewitch v. United States, 336 U.S. 440, 69 S.Ct. 716, 93 L.Ed. 790 (1949); Echert v. United States, supra.
28
Here, the government portrayed for the jury a defendant all of whose friends or acquaintances were addicts or peddlers. This effort was the main thrust of the government's cross-examination of the defendant. The prosecutor began the line of questioning by asking the defendant if he knew any people who were 'either drug addicts or who have been convicted of selling drugs, or do sell drugs.' A negative answer was given. This question itself was far broader than the testimony given by the defendant on direct examination. The prosecutor then proceeded to intersperse the remaining cross-examination with questions relating to the defendant's friends or acquaintances and to his knowledge of their addiction or drug records. While the government never did produce evidence indicating that the defendant knew that these people were addicts or sellers, it was able to connect him in the eyes of the jury with an entire group of undesirables.
29
A new trial without the cross-examination found objectionable here may well bring the same result. We are unable, however, to say that the present verdict was reached without the prejudicial influence of improper cross-examination. In today's society, possibly no act is more abhorred than the selling of narcotics. And nothing makes it more difficult for a defendant to receive a fair and unbiased trial than for the jury to think that the defendant or his acquaintances are men of bad character. When the act with which the defendant is charged is related to the evidence of bad character, the prejudice is intensified. See, e.g., Osborne v. United States, 351 F.2d 111, 117, 118 (8th Cir. 1965).
30
In view of the fact that this case will probably be retried, we believe it advisable to discuss, though we need not decide, whether the trial court erred in receiving:
31
MRS. PARKER'S TESTIMONY WITH RESPECT TO PRIOR NARCOTICS SALES BY THE DEFENDANT
32
The federal courts have long excluded from a criminal prosecution evidence of prior criminal activity not charged in the indictment or information.
33
'The general rule is that in a criminal prosecution proof which shows or tends to show that the accused is guilty of the commission of other crimes and offenses at other times, even though they are of the same nature as the one charged in the indictment, is incompetent and inadmissible for the purpose of showing the commission of the particular crime charged. The accused is to be convicted, if at all, on evidence showing his guilt of the particular offense charged in the information. It is not competent to prove that the accused committed other crimes of a like nature for the purpose of showing that he would be likely to commit the crime charged in the information. Evidence of other crimes compels a defendant to meet charges of which the information or indictment gives no information, confuses him in his defense and raises a variety of false issues. Thus, the attention of the jury is diverted from the charge contained in the indictment or information. * * *'
34
Kempe v. United States, 151 F.2d 680, 687 (8th Cir. 1945).
35
Several exceptions to this rule have developed which permit the admission of evidence of prior criminal activity to show (1) motive, (2) intent, (3) absence of mistake or accident, (4) common scheme or plan, or (5) the identity of the accused.12
36
Mrs. Parker's testimony that she had previously purchased narcotics from Crawford was received by the trial court 'only as it may relate to the intent of the defendant.'13 The difficulty with this theory ordinarily would be that 4704(a) and 4705(a) have been construed as requiring no proof of intent.14 Under the Harrison Narcotics Act, which preceded the present act and was substantially identical to it '* * * criminal intent is not an element of the offense of selling narcotic drugs in violation of (the precursor of 4705(a)). * * * The motive with which one may have engaged in such forbidden selling * * * is wholly immaterial.' Davis v. United States, 306 F.2d 317 (8th Cir. 1962), cert. denied, 372 U.S. 920, 83 S.Ct. 734, 9 L.Ed.2d 725 (1963); Daugherty v. United States, 2 F.2d 691 (8th Cir. 1925), reversed on other grounds, 269 U.S. 360, 46 S.Ct. 156, 70 L.Ed. 309 (1926); Guilbeau v. United States, 288 F. 731 (5th Cir. 1923).
37
'The offense described in * * * 4704(a) * * * does not include a particular state of mind as an element of the offense. Any sale of narcotic drugs is a violation of 4704(a) unless the drugs are sold in the original stamped package or sold from the original stamped package. * * *'
38
United States v. Dillard, 376 F.2d 365, 368 (7th Cir. 1967).
39
Here, however, the trial court submitted the case to the jury on the theory that the government had the burden of proving a specific intent to willfully violate the law. In the light of such submission, the receipt of the evidence for the purpose of showing intent was not error.
40
We do not decide at this time whether the evidence may also be admissible under another exception. See, United States v. Lewis, 423 F.2d 457 (8th Cir. 1970). We point out only that care must be exercised in receiving it.
41
The danger of prejudice to a defendant because of the admission of evidence of other crimes is always great. The nature of such prejudice is demonstrated by the case before us. After Mrs. Parker's testimony respecting Crawford's alleged prior narcotics sales had been introduced, the defense had two alternatives: to either let the testimony stand, or to cross-examine the witness and run the risk of eliciting more damaging testimony. The defendant elected to rebut her testimony by both a specific and a general denial in his own direct examination. These denials were then used by the government as the basis for the line of cross-examination which we have held to be prejudicial error.15
42
If Crawford's defense had raised the questions of mistake, identity, motive, or lack of scheme or plan, the government could have met this defense on its rebuttal. The Second Circuit has suggested that the preferable method of dealing with evidence of prior crimes is to defer its introduction until the defense case makes the proof of prior crimes necessary. United States v. Adams, 385 F.2d 548 (2nd Cir. 1967). We think the suggestion is one deserving serious consideration.
43
Reversed and remanded for a new trial.
1
Mrs. Parker was jailed for one day and released without bail. She had not been brought to trial for selling drugs as of the date of Crawford's trial
We find no merit in the defendant's contention that he was denied an adequate opportunity to cross-examine the informant. The government conceded in its opening statement that the informant 'in agreed to work for the government 'in the hopes of getting some preferential treatment.' Furthermore, the court permitted the defense to examine the informant in some detail with respect to the inducements offered her to cooperate with the government. McWilliams v. United States, 394 F.2d 41 (8th Cir. 1968), cert. denied, 393 U.S. 1044, 89 S.Ct. 643, 21 L.Ed.2d 593 (1969); Pope v. United States, 372 F.2d 710 (8th Cir. 1967), vacated on other grounds, 392 U.S. 651, 88 S.Ct. 2145, 20 L.Ed.2d 1317 (1968); United States v. DeLeo, 422 F.2d 487 (1st Cir. 1970), cert. denied, 397 U.S. 1037, 90 S.Ct. 1355, 25 L.Ed.2d 648 (1970); United States v. Battaglia, 394 F.2d 304 (7th Cir. 1968); Levin v. United States, 119 U.S.App.D.C. 156, 338 F.2d 265 (1964), cert. denied, 379 U.S. 999, 85 S.Ct. 719, 13 L.Ed.2d 701 (1965); Deschenes v. United States, 224 F.2d 688 (10th Cir. 1955).
2
The government raises no question respecting the form or timeliness of the defendant's objection
3
Gideon v. United States, 52 F.2d 427 (8th Cir. 1931); United States v. Nettl, 121 F.2d 927 (3rd Cir. 1941)
4
Apt v. United States, 13 F.2d 126 (8th Cir. 1926); Miller v. Territory of Oklahoma, 149 F. 330, 338 (8th Cir. 1906) (involving a witness other than the accused); United States v. Tomaiolo, 249 F.2d 683, 687-689 (2nd Cir. 1957)
5
Echert v. United States, 188 F.2d 336 (8th Cir. 1951); Salerno v. United States, 61 F.2d 419, 424 (8th Cir. 1932); Terzo v. United States, 9 F.2d 357 (8th Cir. 1925) (involving a witness other than the accused)
6
Packineau v. United States, 202 F.2d 681, 688 (8th Cir. 1953) (involving a witness other than the accused)
7
Glover v. United States, 147 F. 426 (8th Cir. 1906) (involving a witness other than the accused); United States v. Yarbrough, 352 F.2d 491 (6th Cir. 1965)
8
Haussener v. United States, 4 F.2d 884 (8th Cir. 1925)
The trial court may permit a defendant to be cross-examined, however, as to prior felony convictions for the honest purpose of affecting credibility. Williams v. United States, 3 F.2d 129 (8th Cir. 1924) (involving a witness other than the accused); United States v. Pennix, 313 F.2d 524 (4th Cir. 1963).
9
Little v. United States, 93 F.2d 401, 407-408 (8th Cir. 1937), cert. denied, 303 U.S. 644, 58 S.Ct. 643, 82 L.Ed. 1105 (1938). See also for prejudicial error, Salerno v. United States, supra at n. 5
10
Edwards v. United States, 18 F.2d 402 (8th Cir. 1927)
11
See generally, United States v. Tomaiolo, supra, n. 4; United States v. Provoo, 215 F.2d 531 (2nd Cir. 1954). A good example of the proper application of the 'opened door' exception is found in Walder v. Unite d States, 347 U.S. 62, 74 S.Ct. 354, 98 L.Ed. 503 (1954)
12
United States v. Lewis, 423 F.2d 457 (8th Cir. 1970); Love v. United States, 386 F.2d 260 (8th Cir. 1967), cert. denied, 390 U.S. 985, 88 S.Ct. 1111, 19 L.Ed.2d 1286 (1968); Hamilton v. United States, 409 F.2d 928 (5th Cir. 1969); United States v. Phillips, 401 F.2d 301 (7th Cir. 1968); Robinson v. United States, 366 F.2d 575 (10th Cir. 1966), cert. denied, 385 U.S. 1009, 87 S.Ct. 717, 17 L.Ed.2d 547 (1967); Medrano v. United States, 285 F.2d 23 (9th Cir. 1960), cert. denied, 366 U.S. 968, 81 S.Ct. 1931, 6 L.Ed.2d 1258 (1961)
13
In admitting the evidence, the District Court admonished the jury to consider the evidence only on the question of intent and gave limiting instructions before the jury retired to consider its verdict
14
If intent is an essential element of the crime, evidence of other acts similar in nature and closely related in time to those encompassed in the charge is admissible to establish intent. Von Feldt v. United States, 407 F.2d 95 (8th Cir. 1969) and cases cited therein. See, United States v. Bessesen, 433 F.2d 861 (8th Cir. 1970); Spinelli v. United States, 382 F.2d 871 (8th Cir. 1967), reversed on other grounds, 393 U.S. 410, 89 S.Ct. 584, 21 L.Ed.2d 637 (1969)
But when intent is not an element of the offense, the admission of evidence of prior criminal activity under the intent exception is error. See, Hamilton v. United States, supra; Baker v. United States, 227 F.2d 376 (5th Cir. 1955); United States v. Klass, 166 F.2d 373 (3rd Cir. 1948).
15
The trial court, in the light of Crawford's general denial, in its discretion might have permitted the government to cross-examine Crawford as to sales to others but such an examination should have been permitted only if the trial court had determined that its purpose was an honest one and was not asked merely to arouse unjust suspicion in the minds of the jurors. In such event, the government would be bound by the defendant's answer unless it produced evidence as to such sales | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1538132/ | 6 B.R. 695 (1980)
UNITED BANK OF DENVER, Master Charge Division and Visa Division, Plaintiff,
v.
Joseph Melvin KELL, Debtor/Defendant.
Proceeding No. 80 M 1410.
United States Bankruptcy Court, D. Colorado.
October 27, 1980.
*696 Dennis P. Walker, Denver, Colo., for plaintiff.
Jeffrey L. Hill, Denver, Colo., for debtor/defendant.
MEMORANDUM OPINION
JOHN P. MOORE, Bankruptcy Judge.
THIS MATTER arises upon a complaint to determine the dischargeability of a debt pursuant to 11 U.S.C. § 523(a)(2)(A) which excepts from discharge any debt for obtaining money, property, or services by "false pretenses, a false representation, or actual fraud * * *." The alleged false pretense or fraud asserted in this case was the Defendant's continued use of credit cards issued by the Plaintiff at a time when the Defendant was insolvent, a Chapter 13 debtor, and when the Defendant knew or should have known he was and would be unable to repay the debts incurred with the use of those cards.
The Defendant is a 48-year old mechanical engineer employed by an internationally known company in a responsible supervisory position. His demeanor and speech clearly indicate he is a person of above average intelligence. Yet, the tale which unfolds about this Defendant is a saga of a man who, for various reasons, and despite his intelligence, has obviously chosen to live beyond his means. While there are unrefuted reasons which underlie the choice, it is nonetheless manifest that the Defendant has placed himself in debt far beyond any reasonable and justified expectation that he would be able to extricate himself. This case must be judged in light of that circumstance.
While the instant complaint deals with a Mastercharge and a Visa card issued the Defendant by The United Bank of Denver (Bank) in the month of November, 1979, there are germane dealings between the parties which arose prior to that time. It appears that the Bank had issued a Mastercharge card to the Defendant and his former wife in October, 1977.[1] The details of the transactions between the parties emanating from this relationship are not essential. Suffice that for one reason or another this account was substantially in arrears on October 4, 1979 with a balance due on that date of $2,064.45.
The date is significant because it was on that day the Defendant chose to write the Bank stating:
I am gravely concerned over my account and I am writing to explain my situation. Since, earlier this year I was involved in a bitter divorce action which has now finally ended. However, this divorce action has put me in a bad financial situation presently because all of my assets were awarded to my ex-wife leaving me broke.
I am therefore unable to currently maintain my minimum payment requirement and shall only be able to pay $75.00 per month until my situation improves. Your help and understanding in this matter will be appreciated. (emphasis added)
*697 The letter is significant because on the same day as the letter is dated, the Defendant had a telephone conversation with Geri Japhet, a Bank collector. During the course of this conversation the Defendant told Ms. Japhet he was unable to pay the arrearage on the account. He suggested the Bank make a settlement with him because he was contemplating bankruptcy.[2] No settlement was agreed upon, however.
Approximately six days after this conversation, the Defendant returned his Mastercharge card to the Bank apparently in compliance with a demand made by Ms. Japhet. Despite the return of the card, the Defendant made one payment of $75.00 on this account which was credited to his balance on October 18, 1979.[3] Thereafter, the account remained dormant and no further payments were made by the Defendant.
Then, on October 26, 1979, only two weeks after returning his former credit card because of his inability to pay, the Defendant made application to the Bank for both a Mastercharge and a Visa account. Despite the return of his original Mastercharge card, the Bank apparently made no connection or cross reference between this application and Mr. Kell's prior Mastercharge account.[4] It should be noted, however, that the Defendant's application did not disclose the debt owed the Bank on the former Mastercharge account even though the application required the listing of "all current obligations".
Indeed, it would appear from a comparison of the Chapter 13 Statement signed by the Defendant on October 31, 1979, only four days after he filed his credit application with the Bank, that the Defendant omitted from the credit application reference to no less than 13 other then current obligations. A subsequent amendment to the Chapter 13 Statement filed on December 21, 1979 discloses six additional obligations which were also in existence at the time of his application but undisclosed therein.[5]
Before the Bank could act upon the Defendant's application, he made good on his statement to Ms. Japhet and filed a Chapter 13 petition on November 2, 1979. Because the Bank was not scheduled as a creditor in the Chapter 13 Statement, a notice of the filing was not sent to it. Nonetheless, some notice was apparently received, for the cards pertinent to the Defendant's original account bear a legend indicating the communication of the Defendant's bankruptcy case number to the Bank by the Defendant's counsel on November 6, 1979.[6]
Despite the bankruptcy filing, the Bank proceeded to investigate Mr. Kell's application. Astounding as it may seem, the application was approved on November 22, 1979. The decision, however, was based only upon the facts contained in the application and the contents of a credit bureau report.[7]
Mr. Kell acknowledges the apparent inconsistency between filing a bankruptcy petition and contemporaneously seeking a new line of credit from a pre-bankruptcy creditor, but he attempts to justify the inconsistency on the basis he was simply trying to "re-establish" himself following the financial disaster occasioned by an earlier divorce. He also avows that even though his bankruptcy petition was verified only five days after he applied for the credit *698 cards, he had already forgotten the credit card application had been made.
Nevertheless, the Defendant started using the Visa card in December, 1979. Thereafter, for a period of the next several months the Defendant used both cards amassing a Visa balance of $1,207.16 and a Mastercharge balance of $1,273.22. Both balances are net of payments of $361.00 and $230.00 respectively.
While the Defendant was using these credit cards, Mr. Kell was under an obligation to pay the Chapter 13 Trustee $200.00 per month in accordance with the plan confirmed by the Court on January 3, 1980. According to the budget on file in this case, this should have left the Defendant a monthly surplus of $261.00 over his regular monthly living expenses.
Apparently, such was not the case, however. According to the record, the Defendant made only two payments to the Trustee between the date of confirmation and June 6, 1980, the date on which the case was converted to Chapter 7. Moreover, including the Mastercharge and Visa obligations, he amassed seven new unsecured debts totalling $17,100.00 from the time the Chapter 13 petition was filed to the date of conversion. See: Amended Schedule A-3, filed June 9, 1980.
When asked what this new debt represented, the Defendant stated that in January, 1980, his mother had become terminally ill, and he made five trips to Atlanta, Georgia, where she lived. In addition to the cost occasioned by those trips, he contributed to payment of the expenses of her illness and subsequent burial. The money for these expenses came from credit obligations incurred and set forth in the amended A-3 schedule.
According to Mr. Kell's testimony, these expenditures totaled $9,230.00. Taking into account the Bank's Visa and Mastercharge debts together with an unrelated attorney fee, the amended A-3 schedule thus represents debts of $4,000.00 for which Mr. Kell cannot account. When this is coupled with the fact that Mr. Kell was unable to make required Chapter 13 payments in the amount of $800.00, and thus apparently consumed his monthly budgetary excess of $261.00 (or $1,827.00 for the period of seven months) some things become evident.
First it is clear that during the period from December, 1979 through May, 1980, Mr. Kell was accumulating debt greater than his ability to pay. Second, at the rate this debt was accumulating-over $2,400.00 per monthit is clear he did not have sufficient income from which to support himself and make repayment.
Furthermore, from the very outset of the use of his cards, Mr. Kell was clearly insolvent. His Chapter 13 Statement indicates he had debts of $35,645.00 against assets of $9,330.00. Moreover, those stated assets include a leased vehicle valued at $7,000.00 which was not an asset in reality. Hence, at the time Mr. Kell entered into his agreement with the Bank, he was not just insolvent, he was hopelessly so.
It is obvious that Mr. Kell was well aware of his circumstances, for in his October 4, 1979 letter to the Bank, he indicated all his assets had been awarded to his ex-wife and he was "broke". Additionally, in his return of his original Mastercharge card on October 9, 1979, there must be implicit a recognition he was unable to sustain the required responsibilities. Indeed, he admitted as much in his letter of October 4.
Moreover, he must have been aware that the only means he had to repay the Bank was his income. Yet, despite the fact that income was charged with the burden of Chapter 13 payments, and despite the fact that it was obviously insufficient to meet his other needs, Mr. Kell continued to use his Mastercharge and Visa cards to acquire obligations which pushed his debt even further beyond his ability to pay.[8]
*699 In my judgment, if Mr. Kell's conduct is viewed in its entirety, it is clear that he entered into the relationship with the Bank with full knowledge that his financial condition was extremely precarious and that he was without any financial resources other than his salary. It is equally clear that after his mother became ill and that tragedy caused an enormous drain on his income, Mr. Kell continued to make purchases of goods and services (many of which would appear to have been frivolous) in spite of that drain.
Again, Mr. Kell testified he always thought he would be able to repay, and thus he continued to use his cards. Yet, in light of the circumstances, that thought was clearly unrealistic. In fact, if such a thought had been entertained, it had to be a reckless disregard for reality.
Even assuming some justification for the sizable drain the illness of Mr. Kell's mother caused to his income, there is no evident justification for the remaining unexplained debts acquired while Mr. Kell was protected by the Chapter 13 stay. It is thus obvious that Mr. Kell was simply living far beyond his means. Given his sophistication, age, and intelligence, it would belie credence to assume he was ignorant of that fact.
In light of that knowledge and the other circumstances of this case already related, I am convinced the debt owed the Bank here falls within the exceptions to discharge provided in 11 U.S.C. § 523(a)(2)(A).
In arriving at this conclusion, I am aware that no evidence exists that establishes an overt false pretense on the part of the Defendant. Yet, inherent in his continued used of his credit cards without a disclosure of his insolvency when he was manifestly unable to repay the Bank in full, is a circumstance from which an intent not to pay may be inferred. As stated in Collier on Bankruptcy, 15th Ed. ¶ 523.08:
To require an overt misrepresentation where hopeless insolvency makes payment impossible, is an unduly restricted interpretation of the purposes of the Bankruptcy Code.
Moreover, credit card purchases made with an intent not to repay constitute debts which are not dischargeable. In re Black, 373 F. Supp. 105 (E.D.Wis.1974); Lincoln First Bank v. D'Amico, 1 B.R. 170 (Bkrtcy. W.D.N.Y.1979).
The Defendant relies upon In re Parker, 1 B.R. 176 (Bkrtcy.E.D.Tenn.1979); however, the case is easily distinguishable and hence inapposite. In Parker, the court determined that a credit card holder who exceeds the card's credit limit does not create a nondischargeable debt by simply making charges beyond his credit limit. Because the debtor was unaware the limit had been exceeded, the Court was unable to find fraud in the debtor's acts. Those are not the circumstances here.
In contrast, the instant case is more like In re Black, supra. In that case, credit card purchases were made while the debtors were in a position of hopeless insolvency. The court observed that because of their insolvency, they could have had "no realistic intention of paying * * *". The Court stated:
Each time they presented their credit cards and signatures for the purchases in question, the Blacks impliedly represented to [the creditor] that they had the wherewithall, as well as the intention, to pay for them.
* * * * * *
The Blacks' active purchasing conduct and symbolic representations involved in the use of their credit card constituted a form of fraud on [the creditor]. 373 F. Supp. at 107.
Of a like conclusion is the older case of California Conserving Co. v. D'Avanzo, 62 F.2d 528 (2nd Cir., 1933).
Another factor that adds a dimension to this case is the clear evidence of the Defendant's knowledge of his condition contained in his October 4 letter to the Bank in *700 which he stated his assets were gone and he was "broke". Upon very similar facts in Bache Halsey Stuart Shields, Inc. v. Greenwald, 2 B.R. 35 (Bkrtcy.S.D.Fla.1979), the court concluded the debtor knew he could not pay for credit purchases, and the debt created by making them was not dischargeable. I believe the same result must obtain here without question, and the debt owed by the Defendant to the United Bank of Denver must be adjudged excepted from discharge. Judgment shall be entered accordingly.
NOTES
[1] This is a separate card from the one issued in 1979, and the two should not be confused.
[2] The Defendant has denied making the statement; however, given the relative bias of the witnesses, what they have to gain from their testimony, and other instances in which Mr. Kell's testimony was demonstrably inaccurate, I would find Ms. Japhet to be more credible.
[3] See Plaintiff's Exhibit H.
[4] It is not the practice of the Bank to cross reference all applications. According to Ms. Saenz of the Bank's Mastercharge-Visa Division, "This was just a case of the left hand not knowing what the right hand was doing."
[5] While this disparity has not been raised in the complaint, it is certainly a part of the fabric of this case as it bears upon the nature of the Defendant's conduct.
[6] See Plaintiff's Exhibit H.
[7] In fairness, it should be stated that apparently because of the size of the Bank, the person approving the application was not aware of Mr. Kell's bankruptcy.
[8] In the use of these credit cards, Mr. Kell exceeded his credit limit on both cards by 20 percent. While he attempts to negate the implications which arise out of this conduct by showing he made a payment each month that would have been sufficient to reduce his balance below his credit limit, he fails to mention the payment would have achieved that end only had he not continued to use his cards. Since that use continued despite what must have been certain knowledge that such use would once again put him beyond the credit limit, his attempt at justification rings hollow. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/537790/ | 898 F.2d 21
29 Soc.Sec.Rep.Ser. 58, Unempl.Ins.Rep. CCH 15320ACleveland HATCHER, SSN cyv-nc-kcbs Plaintiff-Appellant,v.SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES,Defendant-Appellee.
No. 88-2918.
United States Court of Appeals,Fourth Circuit.
Argued March 10, 1989.Decided Oct. 6, 1989.
Mary J. Wiesen-Kosinski, Aiken, S.C., for plaintiff-appellant.
David L. Stephens, Asst. Regional Counsel (Bruce R. Granger, Chief Counsel, Region IV, Mack A. Davis, Deputy Chief Counsel, Social Security Litigation and Programs, Mary Ann Sloan, Principal Regional Counsel, Social Security Litigation, Dept. of Health and Human Services, Office of the Chief Counsel, Region IV, John R. Bolton, Asst. Atty. Gen., Washington, D.C., Vinton D. Lide, U.S. Atty., Columbia, S.C., on brief), for defendant-appellee.
Before WIDENER and WILKINSON, Circuit Judges, and WILLIAMS, District Judge for the Eastern District of Virginia, sitting by designation.
WIDENER, Circuit Judge:
1
Cleveland Hatcher filed his present application1 for social security disability on July 6, 1972 alleging disability due to "spinal trouble" and "heart trouble". Some seventeen years later, after six administrative hearings before administrative law judges, four considerations by the social security appeals council, and three times having been before the district court, Hatcher appeals the Secretary's denial of disability benefits to this court. He argues that there was insufficient evidence to sustain the burden of proof imposed on the Secretary that Hatcher could perform a range of sedentary work and that such work existed in the national economy; that the Secretary failed to give proper consideration to the vocational implications of pain; that the Secretary did not give proper weight to the opinion of the treating physician; and that the Secretary ignored testimony of Hatcher and his family without making the proper credibility findings. We find that the Secretary did not adequately consider Hatcher's pain in his finding that Hatcher was physically capable of performing a narrow range of non-skilled sedentary work, and we vacate and remand for the award of benefits.
2
Hatcher filed the present application for social security disability on July 6, 1972. Hatcher's insured status apparently ended in 1973. On February 6, 1973 the application was denied. Hatcher requested a reconsideration, which on October 23, 1973 affirmed the initial denial. Hatcher then requested a hearing. Administrative hearings before an A.L.J. were held on November 13, 1974 and July 13, 1975. On November 24, 1975, the A.L.J. conceded a prima facie showing of disability but concluded that there were jobs available for the claimant within the narrow range of sedentary activity which Hatcher could perform. On March 25, 1976, the appeals council sustained the A.L.J.'s findings as the final decision of the Secretary. Hatcher commenced a civil action and on September 20, 1977 the district court adopted the magistrate's recommendation which remanded the case for further administrative action. The remand was for the Secretary to consider new and additional evidence in support of the plaintiff. The new evidence included affidavits from Hatcher and his family which "generally corroborate the plaintiffs' subjective complaints" and detail Hatcher's restrictions in daily activity. The new evidence also included Hatcher's South Carolina Vocational Rehabilitation record which closed Hatcher's case in October 1970 because his handicap was "too severe" and a medical report from Dr. Sell who believed that Hatcher was disabled due to a psychiatric overlay to Hatcher's physical impairments. On October 13, 1978, an additional administrative hearing was held. The A.L.J. issued his opinion on January 19, 1979, finding that even considering the additional evidence, Hatcher was not totally disabled at the critical time. The appeals council issued a revised opinion in the case on May 30, 1979, using the grid regulations, and found Hatcher not disabled at the critical time. Hatcher again appealed to the district court, which, on April 23, 1981, again remanded the case to the Secretary. The district court found that Hatcher had shown a prima facie case of physical disability but that the Secretary successfully rebutted that by showing that Hatcher could perform sedentary work that was available in the national economy. However, the district court also found that Hatcher had made a prima facie case of disability due to mental impairment that the Secretary had not attempted to rebut. The district court remanded the case for further consideration. Neither party appealed the remand order, which will be mentioned later. On September 24, 1981, a hearing was held and additional testimony was received from Mr. Hatcher, and testimony was taken from another vocational expert, a psychologist. The A.L.J., in his January 26, 1984 opinion, found that Hatcher's emotional problems were not disabling at the critical time. On August 3, 1984, the appeals council remanded the case back to the A.L.J. because of its finding that the testimony of a psychiatrist was needed to make a disability determination. After additional hearings were held on July 29, 1985 and June 3, 1986, the A.L.J., on August 22, 1986, found that Hatcher could have performed a narrow range of unskilled sedentary jobs at the critical time despite his physical and mental impairments. On December 18, 1986, the appeals council sustained the A.L.J.'s findings as the final decision of the Secretary for judicial review. Hatcher again appealed to the district court which, on August 12, 1988, affirmed the decision of the Secretary. Hatcher then appealed to this court.
3
In August of 1963, Hatcher underwent an anterior dissectomy and fusion of a cervical disc. In April of 1964, Hatcher underwent a lumbar laminectomy with intraspinous fusion. Again, shortly prior to February 3, 1969, Hatcher underwent a lumbar laminectomy with a disc excision. Before and after Hatcher's repeated back surgeries, he experienced moderate to severe pain and complained to various physicians and surgeons. Hatcher has also suffered chest pains and sought help. In 1969 x-rays revealed a mild cardiomegaly. Also in 1969, Hatcher's treating physician, T.W. Mappus, Jr., diagnosed congestive heart failure probably secondary to coronary artery disease and said that the E.C.G. showed an incomplete right bundle branch block and left ventricular hypertrophy.2
4
We next address the claimant's challenge that the Secretary ignored testimony of Hatcher and his family without making the proper credibility findings. It is well settled that:
5
[t]he ALJ is required to make credibility determinations--and therefore sometimes make negative determinations--about allegations of pain or other nonexertional disabilities. Smith v. Schweiker, 719 F.2d 723, 725 n. 2 (4th Cir.1984). But such decisions should refer specifically to the evidence informing the ALJ's conclusion. This duty of explanation is always an important aspect of the administrative charge, see Gordon v. Schweiker, 725 F.2d at 235-236 [ (4th Cir.1984) ] (citing cases), and it is especially crucial in evaluating pain, in part because the judgment is often a difficult one, and in part because the ALJ is somewhat constricted in choosing a decisional process.
6
Hammond v. Heckler, 765 F.2d 424, 426 (4th Cir.1985).
7
In the many years of considering Hatcher's application, only two findings of credibility were made by the Secretary. In 1979 an A.L.J. found the following to be an inconsistency in Hatcher's testimony: that in 1970 Hatcher stated he could not drive because of problems with his legs, that in 1974 Hatcher testified his feet swelled, which was corroborated by medical evidence, that in 1974 Hatcher testified that his legs gave out; yet in 1979 Hatcher testified he had recently renewed his driver's license but could not drive often or for long distances. We fail to see any significant inconsistency in this testimony. It is quite conceivable that a man who could not drive in 1970 because of his legs, could occasionally drive for short distances in 1979. In 1984 an A.L.J. found that Hatcher's statement about his use of valium some eleven years earlier was not consistent with previously provided evidence. We do not believe that noting such a minor inconsistency in testimony in a case that has been ongoing for seventeen years is a sufficient attack on Hatcher's credibility for a wholesale rejection of his testimony regarding pain.3
8
The Secretary argues that Hatcher is precluded from challenging the finding that Hatcher was physically capable of performing a narrow range of sedentary work because he did not appeal the district court's April 23, 1981 remand order which included such a finding. We find no merit in the Secretary's argument, for "... remand orders in social security cases are not final, appealable orders." Guthrie v. Schweiker, 718 F.2d 104, 106 (4th Cir.1983). Hatcher's challenge cannot be precluded because he did not appeal an order which was not appealable.
9
In a review of whether the Secretary properly found that Hatcher was physically capable of performing a narrow range of sedentary work, we first note that from the time of the district court's April 23, 1981 remand order the A.L.J.'s assumption was that Hatcher was physically capable of sedentary work. Therefore, only the proceedings prior to the April 23, 1981 remand order are relevant as to whether the Secretary made proper findings. 20 C.F.R. 404.1520(f) requires the Secretary to show that the claimant can do other work if the claimant has shown that he is not capable of performing work that he has done in the past. The Secretary concedes that Hatcher is physically incapable of performing his past work. To meet his burden of showing that Hatcher can do other work, the Secretary offered Lawrence Hartlage, Ph.D., who testified as the V.E. The A.L.J.'s hypothetical question to Hartlage improperly failed to include Hatcher's pain. When, during cross examination, Hatcher's attorney asked the V.E. if in making his opinion he considered Hatcher's pain, the V.E. said that he had not. When Hatcher's attorney attempted to have the V.E. include Hatcher's pain in the analysis, the A.L.J. said: "If you wish, you can add an assumption that he has only minimal muscle spasm in the lumbar spine, as found by Dr. Bridges. That's up to you. I didn't put it in because it was only minimum." The V.E. then said that it would not change his opinion.4 "This court has held that pain itself can be disabling and that it is incumbent on the A.L.J. to evaluate the effect of the pain on the claimant's ability to function." Foster v. Heckler, 780 F.2d 1125, 1128 (4th Cir.1986). 42 U.S.C. 423(d)(5)(A) provides that a claimant's statements alone as to pain are insufficient and requires medical evidence of an impairment "which could reasonably be expected to produce the pain or other symptoms alleged." Hatcher had undergone three back operations involving the fusion or excision of spinal discs and was experiencing continued back problems as well as being diagnosed with congestive heart failure and a partial bundle branch blockage. There is no question that such conditions could result in the pain Hatcher described. It was improper for the A.L.J. to ignore the evidence as to Hatcher's pain and reduce it to a "minimal muscle spasm" without the proper credibility findings.
10
The only other testimony from a V.E. that was prior to the April 23, 1981 remand order was that of Beverly Johnson, Ph.D., at the October 13, 1978 hearing. At this hearing, when the V.E. was asked to consider the situation but to disregard the testimony of Dr. Sells, Hatcher and his family, she testified that Hatcher could engage in gainful employment. But when the V.E. was asked to include either Dr. Sell's testimony or the testimony of Hatcher and his family, she testified that Hatcher, in either case, could not engage in gainful employment. Much of Hatcher's testimony and the corroborative testimony of his family went into the pain that he was experiencing and its limiting effect on Hatcher. When the V.E. considered such evidence, she believed that Hatcher could not work. Given the relevant vocational testimony relied on by the Secretary to meet his burden, we hold that he has failed to meet his burden to prove that Hatcher could perform a narrow range of sedentary work.
11
Accordingly, we vacate the judgment of the district court and remand with instructions that the Secretary be instructed to award benefits.
12
VACATED AND REMANDED.
1
Hatcher had twice previously filed for social security disability. His June 19, 1967 application (Vol. II at 103) was denied on October 4, 1967. His September 26, 1969 application was denied on August 6, 1971 by the Appeals Council. Hatcher did not seek judicial review of either of these decisions
2
Our discussion of Hatcher's medical problems is not meant to be all encompassing. We are only noting problems which have direct relevance to Hatcher's pain
3
There has never been a credibility finding regarding the testimony of Hatcher's family which corroborated the extent and disabling impact of Hatcher's pain
4
We note that in the V.E.'s opinion, he stated that Hatcher could perform the jobs he had earlier discussed despite the minimal muscle spasm because they involved primarily sitting. Hatcher had earlier testified that the back pain was made worse by sitting | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1555299/ | 36 So.3d 111 (2010)
LEVIN
v.
STATE.
No. 4D08-4078.
District Court of Appeal of Florida, Fourth District.
May 19, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555334/ | 36 So.3d 673 (2010)
WHITE
v.
STATE.
No. 2D10-1883.
District Court of Appeal of Florida, Second District.
April 29, 2010.
Decision Without Published Opinion Prohibition denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2584205/ | 172 P.3d 1285 (2007)
2007-NMCERT-010
STATE
v.
KLEINHENZ.
No. 30,653 (COA 26,226).
Supreme Court of New Mexico.
October 25, 2007.
Denials of Certiorari. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1557248/ | 673 F. Supp. 1432 (1987)
Lialan M. THOMAS, Plaintiff,
v.
COLECO INDUSTRIES, INC., et al., Defendant/Third-Party Plaintiff
v.
Susan YOUNG, et al., Third-Party Defendant.
No. C85-1865.
United States District Court, N.D. Ohio, E.D.
September 17, 1987.
*1433 Joseph A. Condeni, Jerome & Smith, Cleveland, Ohio, for plaintiff.
Thomas A. Dugan, Jeffrey W. Van Wagner, Ulmer, Berne, Laronge, Glickman & Curtis, Cleveland, Ohio, for defendant and third party plaintiff.
George W. Lutjen, Davis & Young Co., Cleveland, Ohio, for third-party defendant.
MEMORANDUM OPINION AND ORDER
BATTISTI, Chief Judge.
Plaintiff Lialan M. Thomas commenced this diversity case against defendant Coleco Industries, Inc. ("Coleco") on July 3, 1985. Her complaint avers that she was severely injured when she dove into an above-ground swimming pool. Plaintiff alleges that defendant negligently designed and manufactured the pool, failed to warn consumers adequately of certain dangerous conditions, and breached express and implied warranties of fitness. She seeks $1,000,000 in damages for emotional and physical injury suffered, including a fracture of the neck and injuries to the head and spinal cord area.
Defendant filed a third-party complaint on February 19, 1987 against Susan Young and Duane Young, owners of the above-ground pool and the property on which it was located. Coleco seeks indemnification from the Youngs, alleging that their negligence was the direct and proximate cause of plaintiff's injuries. On July 6, 1987, third-party defendants filed a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. The motion is hereby granted.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Based on the papers filed in this case, the Court finds that the following material facts are uncontroverted:
1. Plaintiff, a twenty-one-year-old woman, arrived with a companion early in the morning of July 3, 1983 at the home of Susan and Duane Young. Plaintiff and her companion had been invited to spend the Fourth of July weekend at the Youngs' home at 2951 Lilac Court in Perry, Ohio, a residential area in Lake County.
2. The Youngs owned and maintained an above-ground swimming pool, which was located in the backyard of their property.
3. At approximately 2:00 a.m. on July 3, the Youngs and their two guests decided to go swimming in the above-ground pool. The Youngs and plaintiff's companion jumped into the pool feet first. Plaintiff entered the pool by diving head first.
4. Plaintiff was immediatley admonished by Susan Young, who told her "we don't allow diving and please don't do it again." (Deposition of Susan Young, p. 13). She explained to plaintiff that the water was too shallow for diving. Duane Young also asked plaintiff not to dive into the pool because it was not deep enough.
5. Despite these warnings, plaintiff again dove into the pool later that morning. Plaintiff alleges she received severe physical and emotional injury as a result of the dive.
A.
Third-party defendants claim that they are absolutely immune from liability for plaintiff's injuries under Section 1533.18.1 of the Ohio Revised Code, which provides:
No owner, lessee, or occupant of premises:
1. Owes any duty to a recreational user to keep the premises safe for entry or use;
*1434 2. Extends any assurance to a recreational user, through the act of giving permission, that the premises are safe for entry or use;
3. Assumes responsibility for or incurs liability for any injury to person or property caused by any act of a recreational user.
Section 1533.18 provides:
(A) "Premises" means all privately-owned lands, ways, waters, and any buildings and structures thereon, and all state-owned lands, ways, and waters leased to a private person, firm, organization, or corporation, including any buildings and structures thereon.
(B) "Recreational user" means a person to whom permission has been granted, without the payment of a fee or consideration to the owner, lessee, or occupant of premises, other than a fee or consideration paid to the state or any agency thereof, to enter upon premises to hunt, fish, trap, camp, hike, swim, or engage in other recreational pursuits.
Ohio courts are divided regarding the applicability of Section 1533.18.1 to privately owned swimming pools in residential areas. In Florek v. Norwood, 25 Ohio App. 3d 47, 495 N.E.2d 585 (Cuyahoga County, 1985), the Ohio Court of Appeals affirmed a lower court summary judgment ruling on the ground that owners of an above-ground swimming pool are absolutely immune from liability to a guest who dives head first into the pool. The court held that the plain language of the statute "establishes that a private property owner owes no duty to a recreational user of the property." Id. at 48. In Hager v. Griesse, 29 Ohio App. 3d 329, 505 N.E.2d 982 (Licking County, 1985), the Court of Appeals held that, although "the statute is `inartfully drafted'" and is "generally considered to be applicable primarily to more remote areas for the sport of hunting and fishing," it applies to invited guests at a private swimming pool. Id. at 332, 505 N.E.2d 982.
The Court of Appeals reached a different conclusion in Loyer v. Buchholz, Slip Opinion, No. E-87-5 (Ohio App., July 17, 1987) [Available on WESTLAW, OH-CS database]. The court held that Section 1533.18.1 does not extend to residential landowners who invite guests to swim in their pool. Citing law review articles and numerous decisions in other states that have enacted similar legislation, the court found that the purpose of recreational use statutes was to supplement federal and state park systems by encouraging rural landowners to open their private land for recreational use by the general public. Id. A grant of immunity from liability was viewed as the quid pro quo for owners who made their private land available for public recreation free of charge. Id. Noting that the statute is contained in Title 15 of the Ohio Revised Code, which is devoted to the conservation of natural resources and the protection of wildlife, the court concluded that it is limited in its application to "essentially undeveloped land and water areas (primarily rural or semi-rural land, water or marsh)." Id. (citing Gibson v. Keith, 492 A.2d 241 (Del.1985)).
This Court agrees with the holding in Loyer. Although no record is available to demonstrate the Ohio legislature's intent in enacting Section 1533.18.1, it is suggested by other legal authority. The statute is similar to a model act proposed by The Council of State Governments in 1965. The Council of State Governments, Suggested State Legislation, Vol. XXIV (1965). The comments attached to the model act state:
Recent years have seen a growing awareness of the need for additional recreational areas to serve the general public. The acquisition and operation of outdoor recreational facilities by governmental units is on the increase. However, large acreages of private land could add to the outdoor recreation resources available.... [I]n those circumstances where private owners are willing to make their land available to members of the general public without charge, ... every reasonable encouragement should be given to them.
Id. at 150. Recreational use statutes, such as the model act and Section 1533.18.1, were intended to supplement government park systems by inducing private landowners *1435 to open their land to the general public without charge. Providing such an inducement to the residential owner of a swimming pool would not further this goal.
The Ohio legislature's intent is further evidenced by the statute's inclusion in Title 15 of the Revised Code, entitled "Conservation of Natural Resources", and Chapter 1533, covering hunting and fishing. Had the legislature intended Section 1533.18.1 to apply to private swimming pools in urban or residential areas, it would not have placed it with statutes dealing solely with natural resources and wildlife. In addition, the nature of the activities of a "recreational user"hunting, fishing, trapping, camping, hiking, and swimmingsuggests that the statute was meant to apply to rural or semi-rural tracts of undeveloped land where the public can engage in these outdoor sports. Although "swimming" is included in the list, it must be considered in context with the other terms of the statute. The remaining activities occur "in the true outdoors, not in someone's backyard." Boileau v. De Cecco, 125 N.J.Super. 263, 310 A.2d 497, 500 (1973).
Several state courts have ruled on the scope of recreational use statutes, which have been enacted in forty-seven states. Gibson, 492 A.2d at 248. For example, the Delaware Supreme Court held that its recreational use statute was inapplicable to "urban or residential areas improved with swimming pools, tennis courts and the like." Id. at 248. The Court of Appeals of Georgia similarly concluded that the legislation was not intended "to apply to the friendly neighbor who permits his friends and neighbors to use his swimming pool without charge." Herring v. Hauck, 118 Ga.App. 623, 165 S.E.2d 198, 199 (1968).
The Supreme Court of Wisconsin found that the purpose of the recreational use statute was to encourage private owners of forest and farmlands to open their land for public outdoor recreation. LePoidevin v. Wilson, 111 Wis. 2d 116, 330 N.W.2d 555, 562 (1983). The court observed that the state legislature had apparently decided that "the social good of encouraging landowners to open their land to the public for recreational purposes outweighs the social cost of imposing the expense of injuries on the entrant to the land." Id.
These state court interpretatons, together with the language of Section 1533.18.1 and its location in the Ohio Revised Code, persuades the Court that the statute was not intended to provide immunity to the owner of a private swimming pool in an urban or residential area.[1] The statute thus does not apply to the Youngs.
B.
Since this Court concludes that Section 1533.18.1 does not provide immunity to owners of private swimming pools, the statute does not abrogate the common law duty of care owed by third-party defendants to plaintiff. The applicable standard of care is defined by the host-social guest relationship. In most jurisdictions, a social guest is regarded as a licensee, sometimes referred to as a bare or gratuitous licensee. 88 C.J.S. Negligence § 63 (134) (1966). Under Ohio law, however, the relationship between a host and a social guest is not equivalent to the licensor-licensee relationship. The duty owed by a host to a social guest is:
to exercise ordinary care not to cause injury to his guest by any act of the host or by any activity carried on by the host while the guest is on the premises ... [and]
to warn the guest of any condition of the premises known to the host and which one of ordinary prudence and foresight in the position of the host should reasonably consider dangerous, if the host has reason to believe that the guest does not know and will not discover such dangerous condition.
*1436 Scheibel v. Lipton, 156 Ohio St. 308, 102 N.E.2d 453, 463 (1951). The Supreme Court of Ohio added that "a host is not an insurer of the safety of a guest while upon the premises of the host and ... there is no warranty, express or implied, on the part of the host that the premises to which the guest is invited by him are in safe condition." Id.
Coleco does not allege that third-party defendants were negligent under the first standard of care set forth in Scheibel. No facts have been presented suggesting that any act of the Youngs caused plaintiff's injury.
Regarding the duty to warn, Coleco alleges that the Youngs failed to provide adequate warning to plaintiff of the danger of diving into the above-ground swimming pool. On motion for summary judgment, a court must view evidence in a light most favorable to the party opposing the motion. U.S. v. Articles of Device Consisting of Three Devices "Diapulse", 527 F.2d 1008, 1011 (6th Cir.1976). For the purposes of the summary judgment motion before the Court, therefore, the Court presumes that the Youngs were aware of the danger of diving into their pool, that plaintiff was unaware of the danger, and that the Youngs had reason to believe that plaintiff did not know and would not discover the danger. Under these circumstances, the Youngs owed a duty to warn plaintiff of the dangerous condition pertaining to the swimming pool.
Coleco contends that whether the Youngs acted negligently by failing to warn plaintiff adequately is a question of fact that cannot be resolved on a motion for summary judgment. Although summary judgment is rarely appropriate in negligence actions, it is warranted where only one conclusion may be reasonably drawn from the undisputed facts. Flying Diamond Corp. v. Pennaluna & Co., Inc., 586 F.2d 707, 713 (9th Cir.1978). A court may properly grant summary judgment where it determines, as a matter of law, that defendant discharged its duty to warn plaintiff. Adams v. Union Carbide Corp., 737 F.2d 1453, 1457 (6th Cir.1984).
It is difficult to conceive of a clearer warning than those given by third-party defendants to plaintiff instructing her not to dive into the pool. Explaining that the water level was too low, Susan Young told plaintiff: "we don't allow diving and please don't do it again." Her warning was reiterated by Duane Young. Based on these undisputed facts, no reasonable person could conclude that the hosts failed to provide an adequate warning to plaintiff. Plaintiff's injury, which was the result of diving into the pool less than ten hours after being warned not to do so, was not proximately caused by any failure to warn by third-party defendants.[2]
Summary judgment is hereby granted to third-party defendants Susan and Duane Young.
IT IS SO ORDERED.
NOTES
[1] If the Court were to conclude that the recreational use statute extends to the owner of private swimming pools in residential areas, the statute effectively would repeal the common law duty owed to a social guest, while maintaining the duty owed a trespasser. Hager, 29 Ohio App.3d at 332, 505 N.E.2d 982. This situation, where a trespasser is owed a higher duty than a social guest, could not have been intended by the Ohio legislature.
[2] Although the Youngs did not warn plaintiff before her initial dive at approximately 2:00 a.m. on July 3, 1983, this failure to warn did not cause any injury to plaintiff. She received adequate warnings before again diving into the pool several hours later, which dive resulted in the injuries alleged in plaintiff's complaint. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2857998/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-90-316-CR
ROBERT E. DRAPER,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF BELL COUNTY, 264TH JUDICIAL DISTRICT
NO. 39,301, HONORABLE RICK MORRIS, JUDGE
PER CURIAM
Over his plea of not guilty, appellant was convicted by the trial court of possession
of less than twenty-eight grams of cocaine. Tex. Health & Safety Code Ann. § 481.115 (a), (b)
(Pamph. 1992). The trial court assessed punishment at ten years' imprisonment. We will affirm
the judment of conviction.
I. CHAIN OF CUSTODY
In his first point of error, appellant asserts the trial court erred in overruling his
objection to the introduction of the State's Exhibit 10 and the three razor blades it contained.
Appellant argues that the State failed in its burden to show the beginning of the chain of custody
of the exhibit and blades.
A. Authorities
Questions concerning the admission of evidence lie within the sound discretion of
the trial court. Jackson v. State, 575 S.W.2d 567, 570 (Tex. Crim. App. 1979). The trial court's
determination on admissibility will not be reversed on appeal unless a clear abuse of discretion
is shown. Werner v. State, 711 S.W.2d 639, 643 (Tex. Crim. App. 1986). Tagging an item of
physical evidence at the time of its seizure and then identifying it at trial based upon the tag is
sufficient for admission barring any showing by the defendant of tampering or alteration. Stoker
v. State, 788 S.W.2d 1, 10 (Tex. Crim. App. 1989), cert. denied, 111 S. Ct. 371 (1990). The
chain of custody is conclusively proven if an officer is able to identify that he or she seized the
item of physical evidence, put an identification mark on it, placed it in the property room, and
then retrieved the proffered item on the day of trial. Id.
B. Facts
The State has shown the chain of custody from the time the matchbox containing
the blades were seized until their delivery to the court. Killeen police officer John Moseley
testified that when he searched appellant, he found two Blue Diamond-brand matchboxes in
appellant's shirt pocket. One matchbox, containing three single-edged razor blades was marked
as State's exhibit 10. (1) Moseley did not personally mark the matchbox or blades. Moseley
testified that he kept custody of the matchbox containing the blades until he turned it over to the
evidence-marking officer present at the scene.
Killeen police officer Jackie Cox testified that he was the evidence officer at the
scene of appellant's arrest and that Moseley gave him the items removed from appellant, including
Exhibit 10. Cox testified that he personally marked Exhibit 10 with the case number and his
initials on June 21, 1990. Cox personally inventoried the contents of the matchbox and found it
contained three single-edged razor blades. Cox did not individually mark the razor blades. Cox
also testified that the razor blades were kept in the matchbox the entire time they were in his
custody. Cox placed Exhibit 10 into an individual bag and marked this bag as "item number 2."
Cox subsequently placed the bag containing the matchbox and blades in the Killeen Police-Department-evidence depository. Cox testified that the evidence depository is a secured area
containing individual lockers with locks. The only person with access to the lockers is the
evidence custodian.
Officer George Lane is the Killeen Police-Department-evidence custodian. He
testified that he counter-initialed Exhibit 10 and the individual razor blades when they came into
his custody. Lane testified that the blades were initialed when he received them. He maintained
the matchbox with the blades in a secured area until he personally carried it to the United States
post office, sealed it in an envelope, and sent it registered mail, return receipt requested, to the
Department of Public Safety (DPS) laboratory.
Joel Budge, a DPS chemist, testified that he received Exhibit 10 from George Lane
via registered mail, return receipt requested, on October 12, 1990. Budge initialed the exhibit and
razor blades, and put a DPS case number on them. He testified the matchbox and blades were
maintained in the laboratory pending analysis. Budge analyzed them and personally brought them
to the courtroom.
At trial, Cox, Lane, and Budge each positively identified Exhibit 10 and their
respective markings made on the exhibit when they took custody of it. Lane and Budge also
identified their markings on the razor blades.
C. Discussion and Holdings
Appellant complains about: (1) Moseley and Cox's failure to mark the individual
razor blades; (2) inconsistencies in testimony concerning when and by whom the razor blades
were marked; and (3) inconsistencies in the testimony regarding whether the blades were new or
in wrappers.
Cox's marking of Exhibit 10 and subsequent positive identification of the exhibit
at trial are sufficient to establish the beginning of the chain of custody of the exhibit. See
Hallmark v. State, 789 S.W.2d 647, 650 (Tex. App. 1990, pet. ref'd); King v. State, 710 S.W.2d
110, 113 (Tex. App. 1986), cert. denied, 484 U.S. 829 (1987).
Moseley's and Cox's failure to mark the individual blades and the conflicting
testimony about when and by whom the blades were eventually marked do not amount to a break
in the chain of custody. To hold that the contents of an exhibit must be marked would require that
the cocaine inside a matchbox found on the loading dock also be marked. The law does not
require this. See Stoker, 788 S.W.2d at 10; Garza v. State, 573 S.W.2d 536, 538 (Tex. Crim.
App. 1978); Mendoza v. State, 552 S.W.2d 444, 448 (Tex. Crim. App. 1977). Cox, who was
at the scene of the arrest, testified that Moseley gave him the items taken from appellant, including
the matchbox containing the blades. Cox testified that while the matchbox and blades were in his
custody, the blades were kept inside the matchbox. Thereafter, the record shows that the chain
from Cox to Lane was established, with Lane marking both the matchbox and the blades. The
chain from Lane to Budge was likewise established. Budge also marked the blades well as the
matchbox. Appellant has not shown a break in the chain of custody. Consequently, conflicting
testimony regarding the condition of the blades, when and by whom they were marked, or whether
they were in wrappers, goes to the weight to be given the evidence, not its admissibility. Stoker,
788 S.W.2d at 10; Mendoza, 552 S.W.2d at 448. Appellant's first point of error is overruled.
II. SUFFICIENCY OF THE EVIDENCE
A. Standard of Review
In his second point of error appellant challenges the sufficiency of the evidence to
prove that he intentionally and knowingly possessed cocaine. In reviewing the sufficiency of the
evidence to sustain the conviction, the standard of review on appeal is the same for both direct
and circumstantial-evidence cases. The critical inquiry is whether, after reviewing 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,
318-19 (1979); McGoldrick v. State,, 682 S.W.2d 573, 577 (Tex. Crim. App. 1985). In
circumstantial-evidence cases we must also determine whether the evidence viewed in the light
most favorable to the verdict excludes every reasonable hypothesis except the defendant's guilt.
Carlsen v. State, 654 S.W.2d 444, 447 (Tex. Crim. App. 1983). (2) The appellate court must
consider all of the evidence presented whether properly or improperly admitted. Nickerson v.
State, 810 S.W.2d 398, 400 (Tex. Crim. App. 1991).
B. Facts
The indictment alleges that appellant, on June 21, 1990, "did then and there
intentionally and knowingly possess a controlled substance, to-wit: Cocaine in the amount of less
than 28 grams by aggregate weight including any adulterants and dilutants." Officer Moseley is
assigned to the narcotics section of the Killeen Police Department's Organized Crime Division.
He testified that on June 21, 1990, he was in plain clothes patrolling in an unmarked police
vehicle with officer Jack Abbot of the Killeen Independent School District Police. At 8:10 p.m.,
Moseley received a call from a confidential informant (3) who reported that one Robert Draper was
in possession of a quantity of crack cocaine. The informant told Moseley that Draper had the
cocaine in two matchboxes. The informant provided a description of Draper as a black male, five-feet-eleven-inches to six-feet tall, medium build wearing a striped shirt, black shorts, and high-topped-tennis shoes with no socks.
The initial tip indicated that Draper was alone. However, while en route to the
location where the informant had indicated Draper could be found, Moseley received further
information from Killeen Police Officer Jackie Cox, who had subsequently spoken to the same
confidential informant. Cox told Moseley that Draper was now in the company of a black female
known as "Little Bit." Moseley testified that he did not know Draper, but did know Little Bit and
would recognize her on sight.
Within twenty minutes of the initial informant's tip, Moseley located the suspect
and Little Bit two blocks from the indicated location. Appellant was sitting on a loading dock and
Little Bit was standing in front of him. Appellant and Little Bit were the only individuals the
officers observed in the area. Appellant fit the description given by the informant. As Moseley
and Abbot approached in their unmarked car, appellant stood up and began to walk toward them.
He stopped approximately fifteen feet from the car. Moseley got out of the car, identified himself
and asked appellant to place his hands on the hood of the car. Appellant was carrying a white
plastic bag, which Moseley instructed him to put down.
Moseley searched appellant and the plastic bag. He found two Blue Diamond-brand
matchboxes in appellant's shirt pocket; one contained matches, the other contained three single-edged razor blades. In the white plastic bag, Moseley found numerous boxes of Blue Diamond
matches, loose wooden stick matches, and the paper packaging matchboxes are wrapped in when
bought in a group.
Moseley testified that officer Abbot participated in the stop and search. Within two
minutes of stopping appellant, Abbott found another matchbox on a trailer located on the loading
dock, approximately ten feet from where appellant had been sitting. Moseley testified that Abbott
searched the loading dock because it is common in narcotics cases for suspects to throw or discard
items of contraband when approached, and maybe "something would be around." Officer Abbott
testified that inside the matchbox he found "faded whitish colored rocks"; some were loose and
some were inside a plastic baggie. DPS chemist Joel Budge testifed that he analyzed the eleven
rocks inside the matchbox and they were cocaine.
D. Discussion and Holdings
Appellant argues that the State failed affirmatively to link appellant to the crack
cocaine found on the loading dock and, therefore, failed to exclude every reasonable hypothesis
except the appellant's guilt.
1. Cocaine on Appellant's Person
Before addressing appellant's contentions regarding the cocaine found on the
loading dock, we note that cocaine was found on appellant's person. DPS chemist Budge testified
that he found traces of cocaine on the razor blades found inside the matchbox that was seized from
appellant's shirt pocket. Budge estimated that the trace amounts were less than one milligram.
The cocaine was visible to the naked eye. Budge did not weigh the cocaine.
The State argues that proof that appellant possessed any cocaine is sufficient to
support the trial court's finding of guilt. As support for its argument, the State cites Thomas v.
State, 807 S.W.2d 786 (Tex. App. 1991, pet. granted) for the proposition that if the amount of
the substance is visible, it is sufficient to prove it was knowingly possessed. If Thomas stood for
this proposition, it would certainly provide support for the State's argument. However, Thomas
held that if the substance can be seen and measured, it is sufficient to establish that the defendant
knew it was a controlled substance. Thomas, 807 S.W.2d at 789. Thomas does not expressly
require that the measurable amount be measured, but in Thomas, the chemist did measure the
substance and could testify to its exact weight. Here, Budge did not specifically testify that the
amount was measurable. He stated that he did not attempt to measure it, because it was his
laboratory's policy not to report amounts less than one milligram. (4)
In Coleman v. State, 545 S.W.2d 831, 835 (Tex. Crim. App. 1977), the accused
was charged with possession of cocaine found inside a vial seized from his car. The chemist in
Coleman testified that 1/280,000 of an ounce of cocaine is weighable. The chemist estimated that
the amount of cocaine he recovered from the vial, and tested, was no more than 5/28,000 of an
ounce and maybe as little as 1/28,000 of an ounce. The trace amount involved in Coleman was
not weighable, however, because it could not be removed from the vial. The court of criminal
appeals found the unweighed amount insufficient to show that the cocaine was knowingly
possessed. See Coleman, 545 S.W.2d at 835.
Budge did not specify how much less than one milligram the cocaine found on the
razor blades might be. Since it is possible that Budge's estimate could include less than 1/10th
of a milligram, which is less than 1/280,000 of an ounce of cocaine, it cannot be inferred from
Budge's testimony that the cocaine on the razor blades was weighable. We decline to hold that
the cocaine found on the razor blades is sufficient, by itself, to support the finding of guilt.
2. Cocaine Found on the Loading Dock
In a circumstantial evidence case, when an accused is charged with unlawful
possession of a controlled substance, mere presence at the place where the narcotics are being
used or possessed is not enough when others are present. To show possession, the State must
prove two elements: (1) that the defendant exercised actual care, custody, control, or management
over the contraband; and (2) that he knew the matter possessed to be contraband. McGoldrick,
682 S.W.2d at 578. Therefore, there must be additional independent facts and circumstances
which affirmataively link the accused to the contraband in such a manner that it can be concluded
he had knowledge of the contraband as well as control over it. Control may be shown by actual
or constructive possession, and knowledge must always be inferred to some extent, in the absence
of an admission by the accused. Id. The circumstantial evidence must exclude every reasonable
hypothesis other than the appellant's guilt. Trejo v. State, 766 S.W.2d 381, 383 (Tex. App. 1989,
no pet.). Each case must be viewed on its own facts for evidence of sufficient affirmative links
in a particular case. Humason v. State, 728 S.W.2d 363, 367, n.12, (Tex. Crim. App. 1987).
a. Care, Custody, Control, or Management
We believe a rational trier of fact might infer that appellant exercised the requisite
element of care, custody, control, or management of the cocaine found on the loading dock,
beyond a reasonable doubt, from the aggregate logical force of the following factors: (1) a
confidential informant of proven reliability told Moseley that appellant was in possession of
cocaine inside two matchboxes; (5) (2) when stopped, appellant possessed a plastic bag containing
seven Blue Diamond matchboxes; (3) the plastic bag contained a wrapper for the Diamond-brand
matchboxes; (4) appellant had two more Blue Diamond-brand matchboxes in his shirt pocket; (5)
one of the matchboxes found in appellant's shirt pocket contained three single-edged razor blades,
on which were found traces of cocaine; (6) the Blue Diamond-brand matchbox found on the
loading dock was identical in appearance to the other matchboxes found in appellant's possession;
(7) the matchbox found on the loading dock was within ten feet of where appellant had been sitting
when the officers approached; (8) consistent with the informant's tip, the matchbox found on the
loading dock was the second matchbox found to contain cocaine; (9) the informant indicated that
only one person, appellant, would possess cocaine; (10) the informant never suggested that Little
Bit possessed any cocaine.
The logical force of these factors would support a rational trier of fact in
concluding beyond a reasonable doubt that appellant, who had actual possession of nine Blue
Diamond matchboxes and their wrapper, also exercised control and custody of the identical Blue
Diamond matchbox found nearby on the loading dock. Based on Moseley's testimony that
suspects discard items of contraband when approached, the jury could infer that even though the
officers did not actually see appellant do so, he discarded the matchbox containing cocaine rocks
when he saw the unmarked police car approaching.
b. Knowledge
We believe a rational trier of fact might also infer the element of guilty knowledge,
that is that appellant knew of the presence of the forbidden substance and its forbidden nature,
from the above factors. Based on the traces of cocaine on the blades, a jury could reasonably
conclude that the razor blades were drug paraphernalia related to the use of cocaine and were in
fact used by appellant for that purpose. This, coupled with the factors showing appellant
exercised custody and control of the matchbox containing cocaine rocks, and the reasonable
inference that he discarded it when the unmarked police car approached, is sufficient to show
appellant's knowledge of the cocaine's presence and its forbidden nature.
The factors we have listed, taken together, have logical force in establishing both
of the essential elements of the offense and in eliminating exculpatory hypotheses. Appellant's
second point of error is overruled.
The judgment of conviction is affirmed.
[Before Chief Justice Carroll, Justices Aboussie and B. A. Smith]
Affirmed
Filed: February 19, 1992
[Do Not Publish]
1. We will refer to the matchbox containing the razor blades as Exhibit 10 in the remainder
of our opinion.
2. This holding in Carlsen was prospectively overruled in Geesa v. State, No. 290-90 (Tex.
Crim. App., Nov. 6, 1991). Carlsen continues to apply to cases tried before November 6, 1991.
3. Moseley testified that he had worked with the informant in the past and found his information
to be reliable and credible. He further testified that the informant was familiar with crack cocaine
and could identify it.
4. One milligram is less than 1/28,000 of an ounce:
1/28,000 of an ounce = 0.00101247 gr. = 1.01247 mg.
5/28,000 of an ounce = 0.00506294 gr. = 5.06294 mg.
Thomas, 807 S.W.2d at 789.
5. There being no hearsay objection at trial, we shall consider the probative value of the
testimony regarding the information received from the informant. Tex. R. Crim. Evid. Ann. 802
(Pamph. 1991). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1298846/ | 53 Wash. 2d 321 (1958)
333 P.2d 680
THE CITY OF SEATTLE, Respondent,
v.
HAROLD S. BRYAN, Appellant.[1]
No. 34609.
The Supreme Court of Washington, Department Two.
December 26, 1958.
P.R. McIntosh and Wm. S. Lewis, for appellant.
A.C. Van Soelen, Thomas J. Owens, and C.V. Hoard, for respondent.
ROSELLINI, J.
The defendant was charged with driving while under the influence of or affected by the use of intoxicants and with reckless driving. A jury found him guilty of the first charge but innocent of the second.
All of the assignments of error pertain to the admission of evidence and the giving of an instruction regarding a breath test for alcohol content of the blood, known as the Harger test, to which the defendant had voluntarily submitted when he was taken to the police station on the night of his arrest. It is not contended that the testimony of the arresting officer, who had formed the opinion that the defendant was under the influence of alcohol when he questioned him in his automobile, was insufficient to sustain the conviction. However, since the result of the Harger test *323 was strongly corroborative of the officer's testimony and undoubtedly influenced the jury in its verdict, a new trial is in order if there is any merit in the objections which the defendant raises in this court.
The probative value of chemical tests for alcohol content of the blood has been recognized by the legislature of this state. RCW 46.56.010 provides:
"... In any criminal prosecution for a violation of the provisions of this section relating to driving a vehicle while under the influence of intoxicating liquor, the amount of alcohol in the defendant's blood at the time alleged as shown by chemical analysis of the defendant's blood, urine, breath, or other bodily substance shall give rise to the following presumptions: ...
"If there was at that time 0.15 percent or more by weight of alcohol in the defendant's blood, it shall be presumed that the defendant was under the influence of intoxicating liquor.
"The foregoing provisions of this section shall not be construed as limiting the introduction of any other competent evidence bearing upon the question whether or not the defendant was under the influence of intoxicating liquor...."
Seattle had adopted the language of this statute in an ordinance under which the defendant was charged. The constitutionality of these enactments is not questioned on this appeal. Neither does the appellant question that, if properly performed, the Harger test is an accurate method of determining the alcohol content of a person's blood.[2] These questions are not before the court and we voice no opinion regarding them.
The state produced one expert, Dr. Loomis, a professor of pharmacology at the University of Washington Medical School, who also is in charge of the State Toxicological Laboratory. He asserted that there is a direct relationship between the amount of alcohol in the blood and the degree of intoxication, with attendant impairment of faculties. He *324 testified that the Harger test if properly done is now generally regarded as accurate. His testimony was uncontradicted. Also uncontradicted was his testimony that no special skill or training as a chemist is required to operate the device, and that he could teach an average layman to operate it properly in two days. The chart which accompanies the device is an accurately computed table for converting the reading obtained from the test to the corresponding alcohol content reading. According to his testimony, the chemicals used in the test should be obtained from a chemist or laboratory technician and should be kept free from contamination.
Officer Porter, who administered the test to the defendant, stated that he had received his training in the use of the Harger device at the police academy and from his superiors at the police department and that it was a part of his regular duties to give such tests. He gave an account of the procedure which he followed in administering the test to the defendant and gave the result of the test, a reading of .328, as it was recorded in a journal kept for that purpose. The chemicals used by the department were obtained from a commercial laboratory, he said, and were prepared by a Mr. George Ishii, who made deliveries to the police station every week or oftener. On cross-examination, he stated that he did not know the contents of the chemicals, did not know the formula used in preparing the chart, and did not believe there was a formula.
[1] The defendant's first assignment of error concerns the testimony of Officer Porter. While he does not question the officer's ability to perform the Harger test, he contends that his testimony as to the result of the test is hearsay, because the officer did not know of his own knowledge whether the chemicals had been properly prepared, and did not know how the chart was formulated. The defendant waived any possible error in admitting the testimony of the officer by failing to raise any objection until after the city had rested.
[2, 3] Aside from this fact, we fail to see wherein the officer's ignorance of the nature of the chemicals which *325 were furnished for his use, and his ignorance of the theory on which the conversion table was calculated, rendered his testimony regarding the procedure which he followed and the result which he obtained hearsay. The hearsay rule bars evidence of out of court utterances where it is offered to prove the truth of the matter contained therein. Hearsay evidence is excluded by the courts principally because it is not sanctioned by the oath of the person who made the offered statement and no opportunity is afforded for cross-examination. Steel v. Johnson, 9 Wn. (2d) 347, 115 P. (2d) 145. Officer Porter did not purport to testify to the composition of the chemicals he used or the correctness of the chart, except as he had so found in his own experiments. The fact that the officer was ignorant of matters about which he did not purport to testify does not make inadmissible his testimony regarding matters within his personal knowledge, that is, his procedure in administering the test and the result thereof.
The only argument in support of the plaintiff's contention is in the form of a quotation from a Texas case, Hill v. State, 158 Tex. Crim. Rep. 313, 256 S.W. (2d) 93, wherein the Texas court held that the state had failed to prove three elements which it considered essential to the admissibility of evidence of such tests: (1) Proof that the chemicals were compounded to the proper percentage for use in the machine; (2) proof that the operator and the machine were under the periodic supervision of one who has an understanding of the scientific theory of the machine; and (3) proof by a witness who was qualified to calculate and translate the reading of the machine into the percentage of alcohol in the blood.
That case is of little use to the defendant, since the rules which the Texas court laid down were based upon the testimony of an expert who had said in a prior case involving the test that these matters must be shown before the test could be relied upon as accurate. There is, in this case, testimony that the chemicals should be uncontaminated but there is no testimony that expert supervision or calculation of results is necessary. The uncontradicted testimony of *326 the city's expert was that the chart used is accurate and no expert supervision is needed. There is no evidence from which it could be inferred that the chemicals used were contaminated. On the contrary, Officer Porter testified that the accuracy of his test was checked by observing the displacement of water as well as the change in weight of the ascarite tube (a device which measures carbon dioxide in the subject's breath). If the two readings correspond, as they did in this case, the test has been run correctly. We see no merit in the contention that the jury should have been told to disregard as hearsay the testimony of this officer.
Error is next assigned to the refusal of the trial court to withdraw from the consideration of the jury the volunteered statement of the arresting officer:
"It was the highest Harger that I have ever heard of, highest alcohol reading. It means the person had the most alcohol in his system."
[4] The defendant did not advise the court of the ground for his objection to this statement, nor does his brief contain any authority for his position that the remark should have been taken from the consideration of the jury. Error cannot be predicated upon a ruling of the court on the admission or rejection of evidence, where the court was given no reason for the objection. State v. Estill, 50 Wn. (2d) 245, 310 P. (2d) 885; State v. Spangler, 92 Wash. 636, 159 P. 810.
[5] It is next suggested that the court erred in overruling the objection of the defendant and permitting the arresting officer to state the result of the Harger test, as told him by Officer Porter. Granting that the answer was hearsay and it was error to allow it, the error was harmless inasmuch as the result of the test was established by other competent evidence. State v. Sedam, 46 Wn. (2d) 725, 284 P. (2d) 292.
Finally, the defendant assigns as error the giving of an instruction to the effect that, should the jury find that the chemical analysis of the defendant's breath showed 0.15 per cent or more by weight of alcohol in his blood at the *327 time such sample was taken from him, it should be presumed that the defendant was under the influence of intoxicating liquor at such time.
[6-8] As we have already noted, the constitutionality of RCW 46.56.010 is not questioned. This instruction was based upon that statute, which makes a showing of 0.15 per cent or more of alcohol in the blood presumptive evidence of intoxication, and was proper under the evidence. Whether the presumption was overcome, as the defendant contends, by his own testimony that he was not under the influence of, or affected by, intoxicants at the time was a question for the jury. It is true that we have said that a presumption is not evidence and cannot be made to take the place of evidence. Gardner v. Seymour, 27 Wn. (2d) 802, 180 P. (2d) 564. But that rule does not prohibit the court from instructing the jury that, where certain facts have been proved, the law attaches a presumption of other facts, placing upon the party against whom the presumption arises the duty of producing rebutting evidence. None of the cases cited by the defendant so holds.
The judgment is affirmed.
HILL, C.J., DONWORTH, WEAVER, and OTT, JJ., concur.
NOTES
[1] Reported in 333 P. (2d) 680.
[2] As recently as 1953, the method had some severe critics. See Gardner, Breath-Tests for Alcohol; A Sampling Study of Mechanical Evidence, 31 Tex. L. Rev. 289; and 29 Temple Law Quarterly 210. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1302034/ | 159 Ga. App. 628 (1981)
284 S.E.2d 645
HENDRICKSON
v.
THE STATE.
61892.
Court of Appeals of Georgia.
Decided September 22, 1981.
Douglas Gibson, for appellant.
C. Deen Strickland, District Attorney, W. Fletcher Sams, Assistant District Attorney, for appellee.
CARLEY, Judge.
Appellant was convicted of intentionally escaping from lawful confinement. He appeals from the denial of his motion for new trial.
1. Appellant contends that the evidence is insufficient to support the verdict. Code Ann. § 26-2501 provides in pertinent part as follows: "A person commits escape when he: (a) having been convicted of a felony . . . intentionally escapes from lawful custody or from any place of lawful confinement . . ." The evidence adduced at trial showed the following: At the time of escape appellant was serving a life sentence at the Ware County Correctional Institute. Because of his good institutional record, appellant had been elevated to the status of trustee and was assigned to work during the day at the local Game and Fish Division of the Department of Natural Resources. While assigned to this particular agency, appellant was under its supervision and was confined to the perimeters of the State property upon which the offices of the Game and Fish Division were situated. On the day of appellant's escape, all of the employees of the Game and Fish Division with the exception of a radio operator who *629 worked inside the offices were out of town. Appellant was given directions to mow the grass and to perform other tasks while the other agency personnel were away. Approximately an hour to an hour and a half after the personnel had departed, appellant left the premises. Subsequently, appellant was found in Daytona Beach, Florida.
We find meritless appellant's argument that because he was left "unconfined and unsupervised" he did not escape from "lawful custody or from a place of lawful confinement" within the meaning of Code Ann. § 26-2501. Appellant was in the constructive custody of the county when he was working for the state agency. Smith v. State, 8 Ga. App. 297 (68 S.E. 1071) (1910); Holt v. State, 143 Ga. App. 438 (1) (238 SE2d 763) (1977); Bailey v. State, 146 Ga. App. 774 (1) (247 SE2d 588) (1978). Appellant knew his duties and responsibilities as a trustee and that he was not permitted without permission to leave the premises of the Game and Fish Division. There is no evidence that appellant had permission or authority to leave the premises.
The contention that the constitutional prohibition against double jeopardy was violated because appellant was subjected to criminal prosecution for escape after administrative punishment was imposed for the same act is resolved adversely to appellant by the application of the holding of the Supreme Court in Carruth v. Ault, 231 Ga. 547 (203 SE2d 158) (1974). See also McKenzey v. State, 140 Ga. App. 402 (2) (231 SE2d 149) (1976); Mincey v. Hopper, 233 Ga. 378 (1) (211 SE2d 283) (1974).
Our review of the record convinces us that any rational trior of fact could reasonably have found from the evidence adduced at trial proof of appellant's guilt beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307 (99 SC 2781, 61 LE2d 560) (1979); Baldwin v. State, 153 Ga. App. 35 (264 SE2d 528) (1980).
2. Appellant also contends the trial court erred in failing, without request, to instruct the jury as to the limited consideration which it could give to appellant's prior conviction. The lawful confinement of appellant at the time of his escape was a necessary element of that offense and, thus, evidence of the appellant's prior conviction was clearly admissible to prove lawful confinement. Code Ann. § 26-2501; Gillespie v. State, 140 Ga. App. 408 (1) (231 SE2d 154) (1976). "It is well recognized that when evidence is admitted for one purpose, as it was in the instant case, it is not error for the court to fail to instruct the jury to limit its consideration to the one purpose for which it is admissible, in the absence of a request to so instruct the jury. [Cits.]" Harrell v. State, 241 Ga. 181, 186 (2) (243 SE2d 890) (1978); accord, Suits v. State, 150 Ga. App. 285, 288 (257 SE2d 306) (1979). As there was no such request in the instant case, this enumeration is without merit.
*630 Judgment affirmed. Deen, P. J., and Banke, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/4204344/ | C-Track E-Filing
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of Nevada
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https://www.courtlistener.com/api/rest/v3/opinions/1298896/ | 616 S.E.2d 392 (2005)
In re L.L., a minor child.
No. COA04-783.
Court of Appeals of North Carolina.
August 16, 2005.
Holland & O'Connor, by W.B. Holland, Jr. and Jennifer S. O'Connor, Raleigh, for petitioner-appellant.
Richard Croutharmel for respondent-appellant mother.
Peter Wood for respondent-appellant father.
Wyrick, Robbins, Yates & Ponton, LLP, by K. Edward Greene and Kathleen A. Naggs, Raleigh, for intervenors-appellees.
*393 GEER, Judge.
Petitioner Johnston County Department of Social Services ("JCDSS") and the parents of L.L. ("the respondents") appeal from an order of the trial court transferring custody from JCDSS to the intervenor foster parents ("the Maples"). Our review of the record suggests that the trial court and the parties may have gotten sidetracked by the dispute between JCDSS and the Maples to the point that L.L. has become less the focus of attention and more a pawn in the dispute.
Perhaps as a result, the order on appeal was filed eight months late to the prejudice of L.L., the parents, and JCDSS. For this reason, we reverse. We also hold that the trial court erred in its order by not complying with the provisions of N.C. Gen.Stat. § 7B-906 (2003) and by not explaining why it declined to give preference to the child's relatives when considering placement of the child. Accordingly, we reverse the trial court's order and remand for a new review hearing and entry of an order consistent with this opinion.
Facts
L.L. was born to respondents on 4 October 2002. Because respondents' first child had been removed from respondents' custody and adjudicated abused, neglected, and dependent in December 2001, JCDSS obtained custody of L.L. on 16 October 2002 pursuant to an order for nonsecure custody. On that same day, JCDSS placed L.L. with the Maples.
Following a hearing on 20 November 2002, Judge Marcia K. Stewart entered an order on 19 December 2002 adjudicating L.L. to be neglected and dependent. In the dispositional order, the court "direct[ed] the JCDSS, despite the recommendations of the agency, to work towards reunification with the parents." The court also entered an order for an expedited Interstate Compact on the Placement of Children ("ICPC") home study to explore relative placement with L.L.'s maternal *394 great-great aunt and uncle, Gerald and Sandra Spears, in Virginia.
On approximately 30 January 2003, the Maples learned that JCDSS had changed its plan from foster care placement to relative placement with the Spears. The Maples subsequently met with the Spears to assist with L.L.'s move to the Spears' home, but the Maples according to the trial court "grew extremely concerned with [L.L.'s] placement with the Spears, given their age and the fact that they already had three other children in their custody under the age of seven and a limited family income."
On 12 February 2003, the court held a 90-day review hearing. Since JCDSS had not yet received a response from the State of Virginia regarding the home study of the Spears, the court determined that it was in L.L.'s best interest to remain in a foster care placement with the Maples. The court provided that the goal of the foster care placement was "to provide a temporary placement for the juvenile, pending reunification or location of a relative placement possibility." The court specifically stated that termination of parental rights should not be pursued because "the court determines that it is in the juvenile's best interest to continue to work towards reunification with the parents."
The 12 March 2003 90-day review hearing was continued until 19 March 2003 because the mother's attorney could not be present. At the 19 March 2003 hearing, the Maples made an oral motion to intervene that Judge Stewart granted without objection by JCDSS or the parents. The 90-day review hearing was then continued until 9 April 2003 because the guardian ad litem could not be present. A written order allowing the motion to intervene was not entered until 9 June 2004, 15 months later.
On the same day, 19 March 2003, the Maples filed petitions to terminate the parental rights of both respondent parents and to adopt L.L. On 20 March 2003, because of these petitions, JCDSS removed L.L. from the Maples' home and placed her in the care of another foster family. JCDSS filed a motion to dismiss the petitions to terminate respondents' parental rights on 7 April 2003 on the grounds that the court had ordered JCDSS to work towards reunification and that the Maples did not have standing to file the petitions.
At the 9 April 2003 hearing, Judge Franklin F. Lanier was assigned to hold juvenile court. Counsel for the Maples informed Judge Lanier that Judge Stewart, who was assigned that day to civil district court, had told him on the day before the hearing that she wanted to retain jurisdiction of the matter. Judge Lanier consulted with Judge Stewart and counsel for the parties and transferred the case to the courtroom in which Judge Stewart was presiding.
At the 9 April 2003 hearing before Judge Stewart, counsel for JCDSS, the guardian ad litem, and counsel for the parents informed the court that they had all stipulated to an order placing L.L. in the custody of her maternal relatives, the Spears. The Maples objected to the recommendation and the trial court then conducted a two-day hearing. At the conclusion of the hearing, on 10 April 2003, the court stated in open court that L.L. was removed from the custody of JCDSS and was placed in the custody of the Maples. The court, however, further ordered JCDSS to continue to work towards reunification with the parents and granted visitation to the parents. Judge Stewart also stated, at the close of the hearing, that she retained jurisdiction over the matter.
Although no written order had been entered, JCDSS and the parents each filed notices of appeal from the review hearing order rendered in open court. Simultaneously with its notice of appeal filed 17 April 2003, JCDSS filed a motion for a stay pending appeal, contending that granting custody to the Maples compromised the agency's ability to work towards reunification. The parents filed similar motions on 6 May 2003. On 7 May 2003, the parents also filed motions seeking recusal of Judge Stewart on the grounds that Judge Stewart had improperly retained jurisdiction of the case and also lived in the same neighborhood as the Maples.
JCDSS had noticed its motion to dismiss the Maples' petitions for termination of parental rights for hearing on 30 April 2003. *395 On 28 April 2003, however, the Maples moved to continue that motion on the grounds "that an Order related to this matter had not been signed by the Judge as yet and the Department of Social Services has filed the enclosed Notice of Appeal which has a material effect on this action. . . ."
On 27 May 2003, Judge Stewart denied JCDSS' and the respondents' motions for a stay pending appeal. After hearing arguments of counsel, Judge Stewart "reaffirm[ed] the decision of April 9, 2003, to place the child in the home of Mr. and Mrs. Maples." She entered a single conclusion of law stating that the matter was properly before the court, was within the exclusive jurisdiction of the district court, and was properly calendared with notice to all parties. Based on that conclusion of law, she ordered that the motion for a stay pending appeal be denied. On the next day, 28 May 2003, the Maples filed amended petitions for termination of respondents' parental rights to L.L.
On 30 May 2003, Judge Stewart denied the motions for recusal in an order stating that "[c]ase law does not allow the retention of jurisdiction in a District Court case" and that "although the Intervenors in this action, Mr. and Mrs. Maples, are nearby neighbors, the undersigned does not know them personally and has had no contact with them." She, therefore, denied the motion for recusal, but allowed the motion "that the court not retain jurisdiction."
With respect to the April 2003 review hearing, no written order was filed through the summer and fall of 2003. On 30 December 2003, JCDSS filed a notice of hearing for 14 January 2004 "for the purpose of reviewing this file and determining the best interest of the child." On 21 January 2004, the trial court entered its written order regarding the 9 and 10 April 2003 review hearing. JCDSS and the parents filed new notices of appeal from the written order.
Discussion
I. The Transfer of the Review Hearing to Judge Stewart.
JCDSS argues that the trial court's order should be reversed because the court erred by improperly retaining jurisdiction over the case. Specifically, JCDSS asserts that Judge Stewart improperly presided over the review hearing when she had no authority to act because Judge Lanier was the judge assigned to hear juvenile cases on that date. Judge Stewart was assigned to preside over Johnston County civil district court.
JCDSS and respondents did not, however, object to Judge Stewart's presiding over the review hearing. In fact, counsel for JCDSS expressly stated that he had no objection and acknowledged that the hearing had been calendared for 9 April 2004 specifically because the parties believed it to be Judge Stewart's term of juvenile court. N.C.R.App. P. 10(b)(1) states that "[i]n order to preserve a question for appellate review, a party must have presented to the trial court a timely request, objection or motion, stating the specific grounds for the ruling the party desired the court to make if the specific grounds were not apparent from the context." Appellants thus did not properly preserve this issue for appellate review.
Nevertheless, JCDSS contends that because Judge Stewart was not assigned to preside over juvenile court on 9 April 2003, she lacked subject matter jurisdiction over the review hearing. The question of subject matter jurisdiction "may be raised at any point in the proceeding, and such jurisdiction cannot be conferred by waiver, estoppel or consent." Sloop v. Friberg, 70 N.C.App. 690, 692-93, 320 S.E.2d 921, 923 (1984).
JCDSS cites Wolfe v. Wolfe, 64 N.C.App. 249, 255, 307 S.E.2d 400, 404 (1983), disc. review denied, 310 N.C. 156, 311 S.E.2d 297 (1984), in which this Court held that an individual judge may not retain exclusive jurisdiction over a case. More recently, in In re McLean, 135 N.C.App. 387, 399, 521 S.E.2d 121, 129 (1999), this Court acknowledged "that as a matter of practice some trial courts have [retained jurisdiction for future hearings] for reasons of consistency and efficiency, particularly in family law cases," but pointed out that there is no express statutory authority for the practice. The Court therefore held that the trial court "erred in attempting to retain exclusive jurisdiction over future hearings in this matter and that portion *396 of the dispositional order must be vacated. . . ." Id. at 400, 521 S.E.2d at 129.
Nothing in Wolfe or McLean suggests that retention of jurisdiction implicates subject matter jurisdiction. In fact, the Court in Wolfe found the error to be harmless, a result that is not consistent with a lack of subject matter jurisdiction. Moreover, neither Wolfe nor McLean nor any other authority cited by JCDSS precludes parties from consenting to a particular judge's hearing a case. Cf. Circle J. Farm Center, Inc. v. Fulcher, 57 N.C.App. 206, 207, 290 S.E.2d 798, 799 (1982) ("In the absence of a proper objection, an action begun in the wrong division may continue in that division to its conclusion."). Accordingly, because the parties did not object to Judge Stewart's conducting the review hearing, that issue was not properly preserved for appellate review and the assignment of error is dismissed.
II. Order Allowing Intervention by the Foster Parents.
The respondent parents assign error to the granting of the Maples' oral motion to intervene at the 19 March 2003 hearing. The respondent parents argue that allowing the Maples to intervene was not in the best interests of the child and was an abuse of discretion. As with the prior assignment of error, this issue is not properly before this Court.
The Maples contend that respondents did not file a notice of appeal with respect to the intervention order. Rule 3(d) of the North Carolina Rules of Appellate Procedure requires that the notice of appeal "designate the judgment or order from which appeal is taken." While the parties did file a timely notice of appeal with respect to the 21 January 2004 review order, this notice of appeal did not mention the order allowing intervention. At that point, there was no written order of intervention; the court had simply orally allowed the oral request for intervention. The intervention order was not entered until 9 June 2004 15 months after the oral order and three months after the notices of appeal.
In order for this Court to review the order of intervention, either (1) the intervention order must have been referenced in the notice of appeal filed 20 February 2004, or (2) another notice of appeal needed to be filed following the entry of the written order. See Stachlowski v. Stach, 328 N.C. 276, 278, 401 S.E.2d 638, 640 (1991) (holding that rendering of judgment in open court, when oral ruling leaves no matters undetermined, is the earliest point from which a party may appeal while entry of the written judgment marks the beginning of the period during which a party must file notice of appeal). Ordinarily, because "[t]he provisions of Rule 3 are jurisdictional," the failure to notice appeal from the intervention order would "require[ ] dismissal of [this] appeal." Abels v. Renfro Corp., 126 N.C.App. 800, 802, 486 S.E.2d 735, 737, disc. review denied, 347 N.C. 263, 493 S.E.2d 450 (1997).
The respondent father, however, has assigned error to finding of fact number 33 of the 21 January 2004 review order from which the appellants have properly appealed. It specifically addresses the Maples' intervention:
While the Maples as foster parents may not advocate the position of Johnston County DSS in possibly reuniting the [parents and L.L.] or in placement with L.L.'s great-great maternal aunt and uncle in Virginia, their intervention does not prejudice the adjudication of the rights of the original parties and the best interest [sic] of the child is served by allowing them to intervene. The Maples had and continue to cooperate with the Johnston County DSS by taking the child to all scheduled visits and even volunteering to transport the child when a DSS visit had to be canceled due to weather.
Assuming arguendo that the father's assignment of error as to this finding provides jurisdiction in this Court over the issue of intervention, review is still precluded because no party objected to the Maples' oral request to intervene. In the absence of an objection at trial, a question may not be reviewed on appeal. N.C.R.App. P. 10(b)(1). This assignment of error is dismissed.
III. The Timeliness of the Review Hearing Order.
JCDSS next argues that the trial court's order should be reversed because it *397 was not filed within the time limitation set forth in the Juvenile Code. The review hearing concluded on 10 April 2003, but the court did not enter its order until 21 January 2004 over nine months after the hearing. N.C. Gen.Stat. § 7B-906(d) requires that the order following a review hearing "must be reduced to writing, signed, and entered within 30 days of the completion of the hearing." Therefore, in order to be timely filed, the order in this case should have been filed by 10 May 2003. It was eight months late.
This Court has held that a trial court's failure to adhere to the time requirements set out in certain portions of the Juvenile Code is not reversible error absent a showing of prejudice. See In re J.L.K., 165 N.C.App. 311, 316, 598 S.E.2d 387, 391 (no prejudice shown by respondent parent from the entry of an order terminating parental rights 59 days late), disc. review denied, 359 N.C. 68, 604 S.E.2d 314 (2004); In re E.N.S., 164 N.C.App. 146, 153, 595 S.E.2d 167, 171 (holding that a court's failure to enter adjudication and disposition orders in accordance with N.C. Gen.Stat. §§ 7B-807(b) and -905(a) was not reversible error because "the trial court's failure to timely enter the orders did not prejudice [respondent]"), disc. review denied, 359 N.C. 189, 606 S.E.2d 903 (2004).
Recently, this Court, in applying N.C. Gen.Stat. § 7B-1109 (2003), held that a delay of over six months between a termination of parental rights hearing and the resulting order was "highly prejudicial." In re L.E.B., ___ N.C.App. ___, ___, 610 S.E.2d 424, 426 (2005) (emphasis omitted), disc. review denied, ___ N.C. ___, 616 S.E.2d 538, 2005 WL 1754664 (2005). In L.E.B., the concurring judge noted that the six-month delay required reversal because the "juveniles, their foster parents, and their adoptive parents are each affected by the trial court's inability to enter an order within the proscribed time period." Id. at ___, 610 S.E.2d at 428 (Timmons-Goodson, J., concurring).
Similarly, we hold that the nine-month delay in this case was prejudicial and requires reversal. First, because of the failure to enter an order, the aggrieved parties in this case JCDSS, the mother, and the father could not appeal. Compare In re B.M., 168 N.C.App. 350, 354, 607 S.E.2d 698, 701 (2005) (finding that delay in filing a petition to terminate parental rights under N.C. Gen.Stat. § 7B-907(e) (2003) was not prejudicial since respondents could effectively appeal from the order changing the permanent plan from reunification and, therefore, "[r]espondents' right to appeal was not affected by the untimely filing"). The appellants attempted to appeal by filing notices of appeal after the hearing, but could not perfect the appeal because no written order existed. Abels, 126 N.C.App. at 803, 486 S.E.2d at 737 ("This Court is without authority to entertain appeal of a case which lacks entry of judgment.").
In addition, this delay was directly contrary to the permanent plan of reunification and L.L.'s best interests. In appeals from a termination of parental rights, there has, at least, been a judicial determination that the permanent plan should be changed from reunification to termination and a second judicial determination that the parents' rights should be terminated. Here, to the contrary, the only judicial determination has been that reunification should continue to be the permanent plan. Yet, the court failed to provide any specific direction to ensure that all the parties worked towards reunification instead of their own individual, adverse interests. The Maples' interests became adverse to the parents and JCDSS once they filed their petition to terminate parental rights in the face of the permanent plan of reunification. The nine-month delay in entry of the order left the parties in limbo as to exactly what the plan was to be since the oral findings simply told JCDSS to continue to work with the parents and also significantly delayed the date by which the child might be reunited with the parents.
Further, without a filed order, there was no order with which anyone had to comply because "`an order rendered in open court is not enforceable until it is "entered," i.e., until it is reduced to writing, signed by the judge, and filed with the clerk of court.'" Carland v. Branch, 164 N.C.App. 403, 405, 595 S.E.2d 742, 744 (2004) (quoting West v. Marko, 130 N.C.App. 751, 756, 504 S.E.2d 571, 574 (1998)). Without any written order providing *398 direction to the Maples, the appellants had no means to compel the Maples to cooperate in reunification efforts. Mr. Maples' testimony established that such cooperation could not be taken for granted:
Q. So right here and now today, you're not willing to cooperate in any kind of reunification plan, are you?
A. I assume not if we filed termination of parental rights.
Q. In fact, really I mean, you would be unable to do it due to your feelings and the things that led you to file these actions.
A. We feel like we didn't act any different than DSS since termination of parental rights had already been pursued with another child.
Thus, given the unusual circumstances of this case and the nature of the oral order, the delay undermines the permanent plan of reunification and prejudices L.L., the parents, and JCDSS.
Although the Maples were not prejudiced by the delay, any cognizable interest of the Maples "derives from the child's right to have his or her best interests protected." In re Baby Boy Scearce, 81 N.C.App. 531, 541, 345 S.E.2d 404, 410, disc. review denied, 318 N.C. 415, 349 S.E.2d 589 (1986). Yet, because of the permanent plan of reunification, the delay may well harm L.L. Here, from the time of the review hearing until the present, L.L. has aged from being six months old to being almost three years old while living with a couple committed to adopting her and opposing reunification. As Judge Becton noted in a dissenting opinion:
Given the tender ages of the children involved in most of these cases and the length of time it generally takes from temporary removal to termination . . . bonding between the child and the foster parents is likely to occur and is, therefore, likely to be unduly weighted when balanced against the interest of parents. . . .
In re Webb, 70 N.C.App. 345, 359, 320 S.E.2d 306, 314 (1984) (Becton, J., dissenting), aff'd per curiam, 313 N.C. 322, 327 S.E.2d 879 (1985). Because of the bonding, the delay will either afford the Maples increased leverage in the "best interests" analysis or will cause greater trauma to the child if the plan for reunification prevails. We cannot condone a mode of proceeding that risks making a termination of parental rights a fait accompli.
JCDSS and the parents attempted to call the potential prejudice to the attention of the trial court by moving to stay the order and preserve the status quo pending appeal. In its motion, JCDSS noted (1) that the Maples, who had been granted custody, did not support the plan of reunification and intended to adopt L.L., (2) that JCDSS was nonetheless under a duty, pursuant to the court's order, to continue efforts to reunify L.L. with her biological family, and (3) that placement in the Maples' home, pending the appeal, would compromise JCDSS' ability to work towards reunification. JCDSS also stated that "upon information and belief, if execution of the Order is not stayed, the child's IV-E eligibility funding will be affected in the future. . . ." JCDSS specifically noted that it could take one to two years for the appeal to be resolved. Not only did the trial court deny the stay, but despite the concerns expressed by JCDSS, the court further delayed any appeal by not entering its order for another eight months.
We acknowledge that the record also suggests that had JCDSS requested another review hearing earlier or petitioned for writ of mandamus, some of the delay may have been avoided. Nevertheless, the circumstances of this case demonstrate prejudice to L.L., the parents, JCDSS, and the statutorily-mandated permanency planning process. See In re R.T.W., 359 N.C. 539, ___, 614 S.E.2d 489, 494 (2005) (observing that "protracted custody proceedings that leave the legal relationship between parent and child unresolved and the child in legal limbo . . . thwart the legislature's wish that children be placed `in . . . safe, permanent home[s] within a reasonable amount of time'")(quoting N.C. Gen.Stat. § 7B-100(5) (2003)). Accordingly, we reverse the order of the trial court and remand for a new review hearing.
IV. Failure to Make Adequate Findings.
We address the appellants' arguments regarding the adequacies of the order's findings *399 of fact because the issues are likely to recur on remand. Appellants contend that the trial court erred (1) in failing to make findings to justify not giving priority in placement to L.L.'s relatives, the Spears; and (2) in failing to make findings of fact required under N.C. Gen.Stat. § 7B-906. We agree.
A. Priority Placement to Family Members.
At the review hearing, appellants notified the trial court that JCDSS had received an approved ICPC home study for the Spears and that JCDSS, the parents, and L.L.'s guardian ad litem all had stipulated to placement of L.L. with the Spears. In arguing that the trial court failed to make sufficient findings of fact to support its rejection of that stipulation, appellants point to N.C. Gen.Stat. § 7B-903(a)(2)(c) (2003). N.C. Gen.Stat. § 7B-903(a)(2)(c) mandates that "[i]f the court finds that the relative is willing and able to provide proper care and supervision in a safe home, then the court shall order placement of the juvenile with the relative unless the court finds that the placement is contrary to the best interests of the juvenile." Appellants argue that the trial court's order must be reversed because the court neither placed L.L. with her relatives, the Spears, nor made any findings of fact that placement with the Spears would be contrary to L.L.'s best interests.
The Maples contend that trial courts entering orders following review hearings are not required to comply with N.C. Gen.Stat. § 7B-903(a)(2). "The primary rule of statutory construction is to effectuate the intent of the legislature." In re Estate of Lunsford, 359 N.C. 382, 392, 610 S.E.2d 366, 373 (2005).
N.C. Gen.Stat. § 7B-906, which the parties agree governed the hearing below, specifically provides that "[t]he court, after making findings of fact, . . . may make any disposition authorized by G.S. 7B-903, including the authority to place the juvenile in the custody of either parent or any relative found by the court to be suitable and found by the court to be in the best interests of the juvenile." N.C. Gen.Stat. § 7B-906(d). The plain language of the statute thus incorporates N.C. Gen.Stat. § 7B-903's dispositional alternatives, which, with respect to placement of the child, give priority to a suitable relative "unless the court finds that the placement is contrary to the best interests of the juvenile." N.C. Gen.Stat. § 7B-903(a)(2).
To interpret N.C. Gen.Stat. § 7B-906 in the manner urged by the Maples would be inconsistent with the overall scheme adopted by the General Assembly to comply with federal law. In 1996, in the Personal Responsibility and Work Opportunity Reconciliation Act, Congress provided that a State, as a condition for receiving federal foster care funds, must have a plan for foster care that, in pertinent part, "provides that the State shall consider giving preference to an adult relative over a non-related caregiver when determining a placement for a child, provided that the relative caregiver meets all relevant State child protection standards." 42 U.S.C. § 671(a)(19) (2003).
Consistent with that requirement, N.C. Gen.Stat. § 7B-505 (2003) (emphasis added) specifically requires that the trial court in entering a nonsecure custody order for placement outside the home "shall first consider whether a relative of the juvenile is willing and able to provide proper care and supervision of the juvenile in a safe home." If so, then "the court shall order placement of the juvenile with the relative unless the court finds that placement with the relative would be contrary to the best interests of the juvenile." Id. (emphasis added). N.C. Gen.Stat. § 7B-506(h) (2003) (emphasis added) then provides that, following that initial order, "[a]t each hearing to determine the need for continued custody, the court shall:. . . (2)[i]nquire as to whether a relative of the juvenile is willing and able to provide proper care and supervision of the juvenile in a safe home." Again, "[i]f the court finds that the relative is willing and able to provide proper care and supervision in a safe home, then the court shall order temporary placement of the juvenile with the relative unless the court finds that placement with the relative would be contrary to the best interests of the juvenile." Id. (emphasis added). As noted above, N.C. Gen.Stat. § 7B-903 setting out dispositional alternatives for abused, neglected, *400 or dependent children contains an identical provision. N.C. Gen.Stat. § 7B-903(a)(2). We do not believe that the General Assembly intended to require trial courts to give priority consideration to relatives in the initial nonsecure custody proceedings, at "each hearing" to determine the need for continued custody, and in dispositions for abused, neglected, or dependent children, but despite its express reference to N.C. Gen.Stat. § 7B-903 did not intend to incorporate a similar requirement when trial courts are reviewing custody placements.
In addition, each of the statutes further provides that "[p]lacement of a juvenile with a relative outside of this State must be in accordance with the Interstate Compact on the Placement of Children," as set out in Article 38 of the Juvenile Code (the "ICPC"). N.C. Gen.Stat. §§ 7B-505, 7B-506(h)(2), and 7B-903(a)(2). Exempting review hearings from the requirement that relatives be given first consideration risks undermining the ICPC. Under the ICPC, a "child shall not be sent, brought, or caused to be sent or brought into the receiving state until the appropriate public authorities in the receiving state shall notify the sending agency, in writing, to the effect that the proposed placement does not appear to be contrary to the interests of the child." N.C. Gen.Stat. § 7B-3800, Art. III(d) (2003). In other words, a child cannot be placed with an out-of-state relative until favorable completion of an ICPC home study. Further, the policies underlying the ICPC anticipate that states will cooperate to ensure that a state where a child is to be placed "may have full opportunity to ascertain the circumstances of the proposed placement" and the State seeking the placement "may obtain the most complete information on the basis of which to evaluate a projected placement before it is made." Id., Art. I(b), (c).
In short, compliance with the ICPC may take time and often may not be completed until a review hearing is held, as this case demonstrates. The order for nonsecure custody was entered on 17 October 2002 and the order under N.C. Gen.Stat. § 7B-506 for continued nonsecure custody was dated 23 October 2002. On 20 November 2002, following the adjudication of L.L. as neglected and after finding that the Spears had expressed a desire and willingness to provide care for L.L., Judge Stewart entered an order for a "Priority Placement Request from the State of North Carolina to the State of Virginia, pursuant to Article III of I.C.P.C.," requesting a home study of the Spears. If the Maples' argument were accepted, the trial court, at the point when the ICPC home study had only just been ordered, would no longer have been required to give any consideration to placement with the Spears. In fact, JCDSS did not receive the approved home study from Virginia until immediately before the April 2004 review hearing. Thus, the trial court could not have given consideration to relative placement until the very hearing at which the Maples contend consideration was no longer required.
The Maples' proposed construction of the statute thus creates a conflict between the requirements of the ICPC and the mandate for priority consideration of relatives. We can, however, avoid any such conflict by construing N.C. Gen.Stat. § 7B-906 as incorporating N.C. Gen.Stat. § 7B-903's requirement that the court give first consideration to placement of a child with relatives. See State v. Boltinhouse, 49 N.C.App. 665, 667-68, 272 S.E.2d 148, 150 (1980) ("`Statutes dealing with the same subject matter must be construed in pari materia and harmonized, if possible, to give effect to each. Any irreconcilable ambiguity should be resolved so as to effectuate the true legislative intent.'" (quoting 12 Strong's North Carolina Index 3d, Statutes § 5.4, pp. 69-70)).
Accordingly, we hold that the trial court was required to first consider placing L.L. with the Spears unless it found that such a placement was not in L.L.'s best interests. The trial court's review order does not, however, include the necessary findings of fact. Although L.L.'s guardian ad litem, JCDSS, and the parents all agreed to placement with the Spears and Virginia approved the Spears for placement, the trial court's order included only two findings of fact regarding the Spears as a possible placement:
19. . . . As stated above, the Spears have custody of [L.L.'s] half siblings via Lenoir *401 County DSS. Mr. Spears testified at trial that he lives in Virginia, approximately four hours away; he is 53 years old with a 12th grade education, has a deceased father and currently has 3 children, ages 7, 4 and 3 residing with he and his wife, who is not employed outside the home and who has an 11th grade education. The total family income is $30,000.00 per year.
. . . .
24. After meeting with the Spears, the Maples grew extremely concerned with [L.L.'s] placement with the Spears, given their age and the fact that they already had three other children in their custody under the age of seven and a limited family income. Mr. Spears's father is already deceased and Mr. Spears would be 70 by the time [L.L.] could get a driver's license.[1]
The trial court made no specific finding that placement with Mr. and Mrs. Spears would not be in L.L.'s best interests. Further, the above findings recite certain facts about the Spears and the Maples' views, but draw no factual conclusions. See Williamson v. Williamson, 140 N.C.App. 362, 364, 536 S.E.2d 337, 339 (2000) (noting that "mere recitations of the evidence" are not the ultimate findings required, and "do not reflect the processes of logical reasoning" required (internal quotation marks omitted)); Appalachian Poster Adver. Co. v. Harrington, 89 N.C.App. 476, 479, 366 S.E.2d 705, 707 (1988) (holding that the trial court failed to find the "ultimate facts" where "[f]or the greater part, [the findings of fact] are only recitations of the evidence"). We also note that the Maples' concerns which cannot substitute for a finding by the trial court address the question of a permanent placement and not the question before the trial court: who should have custody pending reunification efforts?
On remand, the trial court must give first consideration to placement with the Spears. Before placing L.L. with the Maples or with anyone else, the court must make specific findings of fact explaining why placement with the Spears is not in L.L.'s best interests. See Shore v. Norfolk Nat'l Bank of Commerce, 207 N.C. 798, 799, 178 S.E. 572, 572-73 (1935) (holding that the trial court must specifically find the facts and cannot simply "indicate from what source the facts may be gleaned").
B. Findings of Fact Required Under N.C. Gen.Stat. § 7B-906.
In a review hearing pursuant to N.C. Gen.Stat. § 7B-906, the trial court is required to consider the following criteria and make written findings regarding those that are relevant:
(1) Services which have been offered to reunite the family, or whether efforts to reunite the family clearly would be futile or inconsistent with the juvenile's safety and need for a safe, permanent home within a reasonable period of time.
(2) Where the juvenile's return home is unlikely, the efforts which have been made to evaluate or plan for other methods of care.
(3) Goals of the foster care placement and the appropriateness of the foster care plan.
(4) A new foster care placement, if continuation of care is sought, that addresses the role the current foster parent will play in the planning for the juvenile.
(5) Reports on the placements the juvenile has had and any services offered to the juvenile and the parent, guardian, custodian, or caretaker.
(6) An appropriate visitation plan.
(7) If the juvenile is 16 or 17 years of age, a report on an independent living assessment of the juvenile and, if appropriate, an independent living plan developed for the juvenile.
*402 (8) When and if termination of parental rights should be considered.
(9) Any other criteria the court deems necessary.
N.C. Gen.Stat. § 7B-906(c).
An examination of the 23 January 2004 order reveals that the order fails to meet the requirement of N.C. Gen.Stat. § 7B-906(c)(3) & (4) that the court address the goals of the foster care placement and the role that the foster parents should play in the planning for the juvenile. The trial court ordered JCDSS to continue reasonable efforts at reunification, but at the same time granted legal and physical custody to the Maples, who had confirmed their determination to terminate the respondent parents' parental rights by amending their petitions shortly after the review hearing in which they obtained custody. Yet, the court's order imposes no requirements on the Maples at all; it does not even direct the Maples to cooperate with JCDSS in connection with the court-ordered "reasonable reunification efforts." Without specification of the goal for the placement with the Maples and the role they were to play in connection with L.L.'s permanent plan of reunification, the purposes of a permanent plan and a review hearing could not be met.
The Maples contend that N.C. Gen.Stat. § 7B-906(c)(3) & (4) were not relevant because they were no longer foster parents. The Maples rely on N.C. Gen.Stat. § 131D-10.2(8) (2003), which defines a "Family Foster Home" as "the private residence of one or more individuals who permanently reside as members of the household and who provide continuing full-time foster care for a child or children who are placed there by a child placing agency . . . ." (Emphasis added.) The Maples reason that they are not a "Family Foster Home" because L.L. was placed with them by the court and not by a child placing agency.
Assuming, arguendo, that the definitions in N.C. Gen.Stat. § 131D-10.2 are relevant to the Juvenile Code,[2] it is undisputed that L.L. was originally placed with the Maples by JCDSS, a child placing agency as defined by N.C. Gen.Stat. § 131D-10.2(4). Further, they continue to provide "foster care" within the meaning of N.C. Gen.Stat. § 131D-10.2(9):
"Foster Care" means the continuing provision of the essentials of daily living on a 24-hour basis for dependent, neglected, abused, abandoned, destitute, orphaned, undisciplined, or delinquent children or other children who, due to similar problems of behavior or family conditions, are living apart from their parents, relatives, or guardians in a family foster home or residential child-care facility. The essentials of daily living include but are not limited to shelter, meals, clothing, education, recreation, and individual attention and supervision.
In addition, a "foster parent" is simply "any individual who is 18 years of age or older who is licensed by the State to provide foster care." N.C. Gen.Stat. § 131D-10.2(9a). The Maples have not argued that they are not "foster parents."
Our review of the trial court's order reveals no intent to alter the original status of the Maples as that of being foster parents. The ramifications of such a change of status could be profound. For example, L.L. might be denied foster care benefits under N.C. Gen.Stat. § 108A-49 (2003). Further, the Maples would no longer be regulated under Article 1A of Chapter 131D. In light of the potential consequences, we do not construe the trial court's order as making such a fundamental change, especially when the order consistently refers to the Maples as "foster parents."
Since the trial court did not expressly indicate any intention to change the Maples' status from that of foster parents, it was required to make findings of fact under N.C. *403 Gen.Stat. § 7B-906(c)(3) & (4). Even if the trial court determines on remand that the Maples should not be considered foster parents, but should play some other currently unspecified role, the trial court would be required under N.C. Gen.Stat. § 7B-906(9), given the circumstances of this case, to make findings regarding the role of the Maples in conjunction with the existing permanent plan of reunification. The order itself establishes the ongoing animosity between JCDSS and the Maples. The order must provide a workable plan for all parties to cooperate in achieving L.L.'s best interests.
On remand, we remind all parties that policing a game of tit-for-tat between a Department of Social Services and foster parents is not the function of a review hearing. Nor should disagreement with an agency's policies, practices, or casework distract from L.L.'s best interests. Our review of the review hearing order indicates that more than a third of the 38 findings of fact relate in whole or in part to a discussion of JCDSS' treatment of the Maples, the effect of JCDSS' actions on the Maples, the Maples' beliefs regarding their ability to adopt, or disapproval of JCDSS. Significantly, L.L.'s guardian ad litem is only mentioned in fleeting fashion, with no description of his recommendation and no explanation as to why the court found the guardian ad litem's recommendation not to be worthy of consideration or, alternatively, entitled to less weight than the views of the Maples. The guardian ad litem is, however, appointed and present solely to represent L.L.'s best interests.
Reversed and remanded.
Judges McGEE and TYSON concur.
NOTES
[1] One finding of fact does acknowledge the need to make findings regarding relative placement: "DSS Requirement [sic] to work toward relative placement priority can be followed by allowing [L.L.] to remain in this area where her only full sister lives and with whom the Maples will continue a relationship." Placement with non-relatives who live in the same area as a child's sibling does not equate to placement with a relative. This fact may, however, be a consideration in deciding L.L.'s best interests.
[2] The definitions contained in N.C. Gen.Stat. § 131D-10.2 apply only for the purposes of Article 1A of Chapter 131D, which has the stated purpose of "assign[ing] the authority to protect the health, safety and well-being of children separated from or being cared for away from their families." N.C. Gen.Stat. § 131D-10.1 (2003). The provisions of the Article relate to licensure and other regulatory requirements for persons and entities providing foster care or placing children with residential care facilities, foster homes, or adoptive homes. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/475440/ | 799 F.2d 944
Laura Jean DEEM, Appellant,v.CHARLES E. SMITH MANAGEMENT, INC., Appellee.
No. 85-1996.
United States Court of Appeals,Fourth Circuit.
Argued June 5, 1986.Decided Sept. 8, 1986.
Charles Shepherd Cox, Jr., Alexandria, Va., for appellant.
Anthony E. Grimaldi (Doherty, Sheridan & Grimaldi, Fairfax, Va., on brief), for appellee.
Before HALL, MURNAGHAN, and WILKINSON, Circuit Judges.
WILKINSON, Circuit Judge:
1
The plaintiff in this case sued the defendant landlord for failing to protect her from a criminal assault by an unknown third person. Because we find that Virginia law imposed no such duty of protection, we affirm the judgment for defendant.
I.
2
Laura Jean Deem was the resident manager of the Windsor Towers apartment complex in Arlington, Virginia. On the night of March 19, 1983, she returned to her apartment at 9:00 after a personal errand. Because the front lot was full, she parked her car behind the building and started to walk around to the entrance. At the rear corner, a man sprang from the bushes, accosted Deem, and beat and sexually assaulted her.
3
Deem sued her landlord and employer, Charles E. Smith Management, Inc. She alleged that Smith Management had left the parking lot in an unsafe condition, without adequate lighting, despite the company's knowledge of previous criminal attacks in the lot. This breach of Smith Management's duties to her as a tenant and as an employee, she argued, had led in part to her injuries.
4
The district court heard testimony on behalf of Deem and then directed a verdict for Smith Management. The court held that the landlord did not have a duty under Virginia law to protect its tenant from the criminal acts of third parties; even if such a duty did exist, the court ruled, Deem had not offered sufficient evidence to support the conclusion that the Windsor Towers lot was known to be unsafe. The court noted further that there was "no evidence" that an absence of lighting was a "particular cause" of the assault. We affirm.
II.
5
As a matter of Virginia common law, this case is controlled by Gulf Reston, Inc. v. Rogers, 215 Va. 155, 207 S.E.2d 841 (1974), where a tenant sued her landlord after her husband died from injuries suffered in an assault.* The Virginia Supreme Court described the principal issue as "whether the landlord owed the duty to protect the tenant from a criminal act of an unknown third party." Id. at 843. The court noted that this duty does inhere in some relationships, including those between a common carrier and its passenger or an innkeeper and its guest. Id. at 844. In the landlord-tenant relationship, however, "Gulf Reston was under no duty to protect Rogers from an intentional criminal act committed by an unknown third person." Id. at 845. The same conclusion applies equally to Smith Management and Deem: the landlord owed no duty of care. And "where there is no legal duty to exercise care, there can be no actionable negligence." Virginia Ry. & Power Co. v. Winstead's Adm'r., 119 Va. 326, 89 S.E. 83, 84 (1916) (citations omitted).
6
Deem argues that the common law rule of Gulf Reston v. Rogers has been superseded by the Virginia Residential Landlord and Tenant Act, Va.Code Secs. 55-248.2 et seq. In her view, this statute required Smith Management to maintain the premises so as to protect its tenants from foreseeable criminal acts. She points to the landlord's obligation under Sec. 55-248.13(a)(3) to "keep all common areas shared by two or more dwelling units of the premises in a clean and safe condition." She claims, in addition, that the lighting in the Windsor Towers parking lot did not satisfy the standards of the Arlington County Code and the landlord's obligation under Sec. 55-248.13(a)(1) to "comply with the requirements of applicable building and housing codes materially affecting health and safety." For the right to enforce these duties in a suit for damages, she relies on Sec. 55-248.21: "the tenant may recover damages and obtain injunctive relief for noncompliance by the landlord with the provisions of the rental agreement or of this chapter." See also Sec. 55-248.40.
7
We disagree with Deem's interpretation of the landlord's statutory duties to keep the premises in a safe condition and to comply with local housing codes affecting safety. The Virginia Residential Landlord and Tenant Act does not define a "safe condition" as used in Sec. 55-248.13(a)(3) or "safety" as used in Sec. 55-248.13(a)(1). We believe, however, that those terms refer to the protection of the tenant from injuries caused by failures of the building--collapsing stairs, faulty walls, dangerous windows. This interpretation is consistent with the common law recognition of a landlord's "duty to use ordinary care to keep [common areas] in a reasonably safe condition." Revell v. Deegan, 192 Va. 428, 65 S.E.2d 543, 546 (1951). This interpretation still recognizes that there exist legal duties in Virginia to promote tenant safety apart from the duty to protect against third-party acts.
8
Deem's version of the statutory notion of safety, on the other hand, conflicts directly with the common law rule of Gulf Reston v. Rogers that the landlord's duty to maintain safe conditions does not include a duty of care for criminal acts by unknown third parties. Virginia law has long been that "the best construction of the statute is, to construe it as near to the reason of the common law as may be...." Chichester v. Vass, 5 Va. (1 Call) 83, 102 (1797); see also Wicks v. City of Charlottesville, 215 Va. 274, 208 S.E.2d 752, 755 (1974), appeal dismissed, 421 U.S. 901, 95 S.Ct. 1548, 43 L.Ed.2d 769 (1975) ("The statute must therefore be read along with the provisions of the common law, and the latter will be read into the statute unless it clearly appears from express language or by necessary implication that the purpose of the statute was to change the common law.").
9
This conclusion is reinforced by the type of question involved in determining whether Smith Management had a duty to protect Deem from unknown criminals. The issue is one of "proximate cause," or as one authority has described it, "essentially a question of whether the policy of the law will extend the responsibility for the conduct to the consequences which have in fact occurred." Prosser, Law of Torts, Sec. 42 at 244 (4th ed. 1971).
10
That policy is one for Virginia to set. Its courts and legislature must strike the balance between the need to protect the safety of tenants and the need to ensure affordable low and moderate income rental housing throughout the state. The extent to which landlords are liable for third-party acts profoundly affects that equation. If landlords face such liability, tenant safety might be greater, but rents may be higher, and apartment units, especially in urban centers, may become more scarce. Such imponderables must be resolved by the state. The Virginia Supreme Court has said directly that no duty exists in this situation, and the General Assembly has not spoken distinctly. The federal court, following the available state declarations of policy, must respect the opinion in Gulf Reston v. Rogers. To substitute another version of the proper policy would be an improper interference of federal authority with the choices of the state.
11
The judgment of the district court is accordingly
12
AFFIRMED.
*
Although resident manager of Windsor Towers, Deem here appears more akin to a tenant than an employee. The attack occurred in the evening on Deem's return to her apartment from a personal errand after the close of the business day. Whatever her status, however, our reasoning would apply at a minimum to one such as plaintiff who resides in an apartment complex, who pays rent, and who seeks to hold his or her landlord responsible for the acts of a third party | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1555404/ | 775 F.Supp. 718 (1991)
VILLAGE OF MORRISVILLE WATER & LIGHT DEPARTMENT
v.
UNITED STATES FIDELITY & GUARANTY COMPANY.
Civ. A. No. 89-322.
United States District Court, D. Vermont.
October 4, 1991.
*719 *720 *721 Russell F. Smith, III, Spiegel & McDiarmid, Washington, D.C., and, William M. Piper, Primmer & Piper, St. Johnsbury, Vt., for plaintiff.
Michael B. Clapp, Dinse, Erdmann and Clapp, Burlington, Vt., for defendant.
COFFRIN, Senior District Judge.
This diversity action involves a dispute between an insurer and its insured concerning coverage for environmental clean-up costs mandated by the U.S. Environmental Protection Agency ("EPA"), pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"). Specifically, the Village of Morrisville Water & Light Department ("Morrisville") seeks an injunction and a declaratory judgment stating that the United States Fidelity & Guaranty Company ("Fidelity") must defend and indemnify Morrisville for the claims made against it concerning the clean-up of the "Rose Chemicals site" in Holden, Missouri. Both Morrisville and Fidelity have moved for summary judgment.
We heard argument on the parties' cross-motions for summary judgment on September 13, 1991. For the reasons stated below, we hold that the policies provide coverage for the claims concerning the Rose Chemicals site. Therefore, we deny Fidelity's motion for summary judgment. However, genuine issues of material fact exist concerning whether Fidelity's denial of coverage was made in bad faith. Thus, we grant Morrisville's motion for summary judgment in part and deny it in part.
BACKGROUND
Morrisville is a utility company owned by the Village of Morrisville, Vermont. Fidelity is a Maryland corporation authorized to sell insurance in Vermont. Morrisville was insured by Fidelity from 1983 through 1988, under a comprehensive general liability policy ("CGL policy") and a comprehensive excess indemnity policy ("Indemnity policy").
On July 23, 1984, Morrisville sent material which contained polychlorinated biphenyls ("PCBs") to the Rose Chemicals site in Holden, Missouri. The EPA had approved the site for the disposal of PCBs, but the owner of the site failed to properly treat, store, or dispose of the hazardous materials. The owner eventually abandoned the site, leaving behind soil and water contaminated with millions of pounds of PCBs.
Under CERCLA, the EPA identifies sites contaminated with hazardous materials, and it identifies the parties "potentially responsible" for the contamination. 42 U.S.C. §§ 9601-9625. The EPA may obtain an injunction to compel the potentially responsible parties to clean-up the site, or it may conduct the clean-up itself and then sue the polluters for reimbursement. 42 U.S.C. §§ 9606-07. However, the EPA's general practice has been to encourage the voluntary clean-up of the contaminated sites by the entities responsible for the pollution. See generally Note, Superfund Settlements: The Failed Promise of the 1986 Amendments, 74 Va.L.Rev. 123 (1988). An agreement between the EPA and the potentially responsible parties is generally embodied in a "consent decree." This consent decree is entered in the federal district court for the district where the contaminated site is located. 42 U.S.C. §§ 9622(a), (b), (d).
In the present case, the EPA notified Morrisville in 1986 of its status as a *722 "potentially responsible party"[1] for the contamination at the Rose Chemicals site. Previously, the EPA had notified other entities, who had also disposed of hazardous waste at the site, that they were considered potentially responsible parties. Some of these entities formed the Rose Chemicals Steering Committee ("Steering Committee"), which then developed a plan for cleaning-up the site.[2]
On January 29, 1989, Morrisville entered into a "Consent Party Agreement" with the EPA and the Steering Committee, and it paid the Steering Committee $15,920.00 for its allocated share of the clean-up costs for the Rose Chemicals site. Under the terms of the Consent Party Agreement, Morrisville remains potentially liable for further clean-up costs. On July 25, 1989, the Steering Committee filed a lawsuit in the United States District Court for the Western District of Missouri[3] against all potentially responsible parties who had not entered into an agreement with the EPA or the Steering Committee concerning the site. By signing the Consent Party Agreement, Morrisville avoided being named as a defendant in that case.
Morrisville timely notified Fidelity of the EPA's claim against it for clean-up costs. Fidelity denied coverage over two years after receiving this notification. Morrisville then brought this action to obtain a declaratory judgment stating that CERCLA clean-up costs are covered under the CGL and Indemnity policies. Morrisville also seeks a declaratory judgment that Fidelity is obligated to defend and indemnify it for all claims concerning the clean-up of the Rose Chemicals site. Finally, Morrisville seeks costs and attorneys' fees for Fidelity's "bad faith" denial of coverage.[4]
Morrisville now moves for summary judgment on its complaint. Fidelity opposes Morrisville's motion, and it moves for summary judgment. This opinion concerns those cross-motions for summary judgment.
DISCUSSION
A moving party is entitled to summary judgment if no genuine issues of material fact exist, and if the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Both Morrisville and Fidelity agree on the material facts of this case. What they disagree on is whether the CGL and Indemnity policies provide coverage for the claims brought against Morrisville under CERCLA. This issue is appropriately decided by summary judgment, because the construction of an insurance policy is a question of law, not fact. Vermont Inv. Capital, Inc. v. Granite Mut. Ins. Co., 705 F.Supp. 1019, 1021 (D.Vt.), aff'd, 888 F.2d 1377 (2d Cir.1989).
*723 In order to determine whether summary judgment is appropriate for either party, we must conduct a three-part analysis. First, we must determine whether Vermont or Missouri law applies to the interpretation of the policies at issue. Secondly, we must decide whether the claims against Morrisville are covered under the terms of the CGL and Indemnity policies. Finally, if we determine that the policies do provide coverage, then we must decide whether Fidelity's denial of coverage was made in bad faith.
I. Choice of Law
Morrisville argues that we should apply Vermont law to this case, while Fidelity argues that Missouri law governs the outcome of this case. To resolve this issue we must apply Vermont's choice of law rule for insurance contract actions. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941).
In Pioneer Credit Corp. v. Carden, 127 Vt. 229, 233, 245 A.2d 891, 894 (1968), the Vermont Supreme Court looked to the Restatement (Second) of Conflict of Laws § 188[5] to determine which state law applied to a dispute concerning promissory notes. The trial court had held that Vermont law applied to the promissory notes at issue, because the makers of the notes resided in Vermont and the property offered as security for the notes was located in Vermont. Id. at 233, 245 A.2d at 893. The Vermont Supreme Court reversed, because "[i]n evaluating the relative importance of these contact points of the contract, the place of the making and the place of performance are entitled to substantial weight." Id. The court concluded that the parties' rights and obligations under the notes were "governed by the law of Massachusetts where the notes were made, delivered and payable." Id.
In the present case, the only contact with Missouri is Morrisville's one-time delivery of hazardous waste to the Rose Chemicals site. In contrast, Vermont has many contacts with the policies and the parties. The policies were negotiated in Vermont, delivered in Vermont, and the premiums were paid in Vermont. Morrisville is located in Vermont and does most of its business in Vermont. The CGL policy also states that it "is issued and delivered subject to the Laws of Vermont ..." See CGL policy at Vermont Liability Endorsement.
Fidelity argues that "there can be little doubt that Missouri has a greater concern than Vermont with all the proceedings related to the cleanup of the Rose Chemicals site." Fidelity Motion for Summary Judgment at 3. Although Missouri has a great interest in the clean-up of hazardous waste sites within its borders, the issue in the present case involves a question of policy coverage, not pollution clean-up. We believe that the Vermont Supreme Court would find that Vermont law controls the interpretation of insurance policies which were negotiated, executed, and paid for in Vermont. Therefore, we will apply Vermont law to this case.[6]
*724 II. Interpretation of the Policies
When Morrisville sent its material to the Rose Chemicals site in 1984, it was the "Insured" under the CGL and Indemnity policies issued by Fidelity. The CGL policy states, in pertinent part, that Fidelity will:
pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of ... property damage to which this insurance applies, caused by an occurrence, and [Fidelity] shall have the right and duty to defend any suit against the Insured seeking damages on account of such ... property damage, even if any of the allegations of the suit are groundless, false or fraudulent....
See CGL Policy at Insuring Agreement (emphasis added). The Indemnity policy also states, in pertinent part, that Fidelity will:
indemnify the Insured for all sums which the Insured shall become legally obligated to pay as damages because of ... property damage ... to which this policy applies caused by an occurrence which takes place anywhere.
See Indemnity Policy at Insuring Agreement (emphasis added).
Fidelity argues that the policies do not provide coverage because: (A) CERCLA clean-up costs are not "damages;" (B) no "property damage" took place at the site; (C) no "occurrence" was triggered; (D) the EPA's letter to Morrisville is not a "suit;" and (E) public policy precludes coverage for the massive costs associated with CERCLA. We will address each one of these arguments individually.[7]
Our analysis must be guided by the principles which underlie Vermont's insurance law. In Vermont, an insurance policy must be construed according to "the evident intent of the parties" as discerned from the language used in the policy. Whitney v. Nationwide Mut. Ins. Co., 151 Vt. 510, 511, 562 A.2d 467, 468 (1989). Any disputed terms must be construed according to their "plain, ordinary, and popular" meaning. American Protection Ins. Co. v. McMahan, 151 Vt. 520, 522-23, 562 A.2d 462, 464 (1989). Because a policy is prepared by the insurer, all ambiguities must be resolved in favor of the insured. Peerless *725 Ins. Co. v. Wells, 154 Vt. 491, 494, 580 A.2d 485, 487 (1990).
Insurers, seeking to avoid their duty to defend, must show that a third party's claim against the insured is entirely excluded from coverage. City of Burlington v. Glens Falls Ins. Co., 133 Vt. 423, 424, 340 A.2d 89, 90 (1975). In the present case, Fidelity has not met its burden, because the CGL and Indemnity policies clearly provide coverage for the claims brought against Morrisville concerning the Rose Chemicals site.
A. Damages
According to the policies, Fidelity is obligated to defend and indemnify Morrisville for all sums which Morrisville "shall become legally obligated to pay as damages." The term "damages" is not defined. Fidelity maintains that the term only encompasses legal damages awarded by a court of law. Fidelity compares CERCLA clean-up costs to other equitable remedies, like an injunction. Thus, Fidelity concludes that the equitable remedies under CERCLA are not "damages" within the meaning of the CGL and Indemnity policies.
In support of its argument, Fidelity relies on Continental Ins. Co. v. Northeastern Pharmaceutical & Chem. Co., 842 F.2d 977 (8th Cir.) (en banc), cert denied, 488 U.S. 821, 109 S.Ct. 66, 102 L.Ed.2d 43 (1988) ("NEPACCO"). In that case, a divided panel of the Eighth Circuit held that, under Missouri law, CERCLA clean-up costs were not "damages" under a comprehensive general liability policy. Id. at 985-86. The court reasoned that the term "damages" must mean legal damages when used in the context of an insurance policy, not equitable relief such as environmental clean-up costs mandated by the EPA. Id.
Perhaps under Missouri law, the term "damages" has the technical meaning stated by the Eighth Circuit in NEPACCO.[8] However, under Vermont law, no distinction between legal and equitable remedies can be read into the plain meaning of the term. Damages are defined as "money claimed by, or ordered paid to, a person to compensate for injury or loss caused by the wrong of the opposite party or parties." Webster's New World Dictionary 348 (3d ed. 1988).[9] Nothing in this definition suggests that "damages" includes only money awarded by a court of law. Moreover, Vermont has abolished the antiquated distinction between legal and equitable claims brought in its court system. See Vt. Const., Ch. II, § 31.
In State of Vermont v. Glen Falls Ins. Co., 137 Vt. 313, 319, 404 A.2d 101, 105 (1979), the Vermont Supreme Court held that "damages" included punitive damages, as well as compensatory damages. The court stated that the plain meaning of "damages" encompassed all the money assessed as damages, "regardless of how characterized." Id. In Gerrish Corp. v. Universal Underwriters Ins. Co., 754 F.Supp. 358, 366 (D.Vt.1990), Judge Parker of this court predicted that the Vermont Supreme Court would find that environmental clean-up costs assessed under state law are "damages" within the meaning of a liability policy. Likewise, we predict that the Vermont Supreme Court would find that environmental clean-up costs assessed under CERCLA are "damages" within the meaning of the CGL and Indemnity policies.
Fidelity states that the case law on this issue is sharply divided. We think the division is "sharp" only with respect to the contrast between the two positions. The clear majority of courts have held that *726 CERCLA clean-up costs are "damages" within the meaning and scope of comprehensive general liability policies. The majority have found that the plain meaning of the term is not restricted to sums awarded by judicial order. Applying rules of construction identical to Vermont's rules, the majority found coverage for clean-up costs which were assessed pursuant to CERCLA or state environmental laws.[10]
In New Castle County v. Hartford Accident & Indem. Co., 933 F.2d 1162, 1188 (3d Cir.1991), the Third Circuit held that the plain meaning of "damages" encompasses CERCLA response costs and other equitable relief. Similarly, the Second Circuit held that, under New York law, a proceeding commenced by a state environmental agency to recover clean-up costs exposes the insured to "damages" within the meaning of a comprehensive general liability policy. Avondale Indus., Inc. v. Travelers Indem. Co., 887 F.2d 1200, 1207 (2d Cir. 1989), cert. denied, ___ U.S. ___, 110 S.Ct. 2588, 110 L.Ed.2d 269 (1990). The Second Circuit reasoned that "viewed from the insured's perspective, we think an ordinary businessman reading this policy would have believed himself covered for the demands and potential damage claims now being asserted in the [state] administrative proceeding, particularly absent any specific exclusionary language in the policy." Id.[11]
Under CERCLA, the EPA is charged with the duty of removing hazardous waste from any property, even if the government has no ownership interest in that property. The EPA recovers the clean-up costs from responsible parties, either voluntarily or by judicial process, as compensation for the losses sustained in restoring the site back to its natural condition. Outboard Marine Corp. v. Liberty *727 Mut. Ins. Co., 212 Ill.App.3d 231, 156 Ill. Dec. 432, 570 N.E.2d 1154, 1160, appeal allowed 139 Ill.2d 598, 159 Ill.Dec. 110, 575 N.E.2d 917 (1991). The costs of restoring property to its natural state has long been recognized as a measure of compensatory damages in common-law pollution cases. Minnesota Mining & Mfg. Co., 457 N.W.2d at 183; Cf. Dean v. Arena, 141 Vt. 647, 650, 450 A.2d 1143, 1145 (1982) (compensatory damages awarded to recover the cost of repairing property damaged by defendant). We fail to see how the cost of restoring property to its natural condition loses its status as "damages" simply because the EPA seeks to recover those costs voluntarily.
In this case, Morrisville, having insured itself against liability for "damages," could reasonably conclude that it was protected from financial loss without regard to the basis upon which its liability might technically be premised. Nothing in the CGL and Indemnity policies indicates an intent to exclude CERCLA clean-up costs from coverage. We acknowledge that some courts have followed the Eighth Circuits's decision in NEPACCO.[12] However, a second reasonable (albeit technical) interpretation of the term "damages" simply creates an ambiguity which must be strictly construed against Fidelity. Peerless Ins. Co., 154 Vt. at 494, 580 A.2d at 487. Therefore, we find that the term "damages" encompasses the CERCLA clean-up costs assessed against Morrisville for the Rose Chemicals site.
B. Property Damage
Fidelity's obligations under the policies are triggered only if the damages are because of "property damage." See CGL and Indemnity policies at Insuring Agreement. In other words, to come within the scope of coverage under the policies, the claims against Morrisville must result from property damage. Both policies define "property damage," in part, as "(1) the physical injury to or destruction of tangible property which occurs during the policy period, including the loss of use thereof at any time resulting therefrom...." See CGL Policy at Definitions; Indemnity Policy at Insuring Agreement.
Fidelity states three reasons why no "property damage" has occurred at the Rose Chemicals site. First, no property damage has occurred, because "there are no pending or contemplated claims alleging property damage to adjoining landowners or others arising out of the contamination at the Rose Chemicals site." Fidelity Motion for Summary Judgment at 10. However, the fact that adjoining landowners have yet to make a claim is not relevant to this case. Nothing in the CGL or Indemnity policies indicates that injury or damage to adjoining properties determines whether "property damage" has occurred.[13]
Secondly, Fidelity argues that no property damage has occurred, because the EPA made no claim under 42 U.S.C. § 9607(a)(4)(C). This section states that the EPA may recover "damages for injury to, destruction of, or loss of natural resources...." In contrast, Morrisville paid its share of the clean-up costs, pursuant to 42 U.S.C. § 9607(a)(4)(B).[14] Because no *728 claim was made under section 9607(a)(4)(C), Fidelity concludes that no "property damage" has occurred at the Rose Chemicals site.
Fidelity relies on Mraz v. Canadian Universal Ins. Co., Ltd., 804 F.2d 1325 (4th Cir.1986) as support for this argument. In Mraz, the EPA sought to recover the costs[15] it incurred in cleaning-up a hazardous waste site created by the plaintiffs. Id. at 1326. The Fourth Circuit held that the insurer had no duty to defend or indemnify the plaintiffs, because the EPA had "not sought recovery for damage to natural resources," pursuant to section 9607(a)(4)(C). Id. at 1329. The court reasoned that:
[o]ne cannot equate response costs with `injury to or destruction of tangible property,' this policy's definition of property damage. Instead, the response costs are an economic loss. Therefore, the [claims by the EPA against the plaintiffs do] not allege a loss of property damage.
Id.; accord Aetna Casualty & Sur. v. Gulf Resources & Chem. Corp., 709 F.Supp. 958, 961 (D.Idaho 1989).
We must respectfully disagree with the Fourth Circuit, because the various cost recovery provisions contained in CERCLA all involve "property damage." Sections 9607(a)(4)(A)-(D) simply identify alternative methods for recovering clean-up and restoration costs. In other words, it does not matter which CERCLA provision the EPA chooses for recovering clean-up costs, the costs themselves are the result of property damage caused by hazardous waste.[16]
Furthermore, the distinctions found in CERCLA, a federal statute, are not relevant to the interpretation of insurance policies under state law. Intel Corp. v. Hartford Accident & Indem. Co., 692 F.Supp. 1171, 1186-87 (N.D.Cal.1988). The Mraz court makes no reference to state law. Thus, the Mraz opinion is not helpful for our analysis in this case.
Finally, Fidelity argues that no property damage has occurred, because Morrisville cannot prove that the specific material it sent to the Rose Chemicals site has actually contaminated the site with PCBs. However, the evidence in the record shows the contrary. The EPA informed Morrisville that it had:
determined that a release of hazardous substances, as defined by Section 104(14) of CERCLA, has occurred at the [Rose Chemical] site and that there is a substantial threat of further releases of hazardous substances at the Facility. At the present time, PCBs are the hazardous substances of concern at the site that are endangering and threatening to endanger the public health or welfare or the environment. Releases of PCBs have occurred at the site causing the contamination of soils and sediments. The manner in which the PCBs and PCB items are stored or otherwise located at the facility and the abandonment of the site by Martha C. Rose Chemicals, Inc. ... creates the potential for further releases of PCBs through spills and the subsequent air transport of PCB contaminated dust, precipitation runoff from contaminated areas and percolation to groundwater.
See EPA Letter at 2, Dec. 1, 1986 (emphasis added). Besides the EPA, the Steering Committee has also documented that the hazardous materials which were sent to the Rose Chemicals site were improperly disposed of by the owner, and these materials are contaminating and will continue to contaminate the site until the clean-up is completed.[17] We have found nothing in the *729 record to support the inference that the material which Morrisville sent to the site was disposed of properly and poses no threat to the environment.
Morrisville purchased the CGL and Indemnity policies from Fidelity to protect it in the event that its actions caused "physical injury to or destruction of tangible property." The Rose Chemicals site is certainly "tangible property."[18] The evidence on record shows that the improper disposal of the hazardous material sent by Morrisville (and other responsible parties) contaminated the site with PCBs. This hazardous material undoubtedly has caused and continues to cause physical injury to the buildings, land, water, and air at the site. C.D. Spangler Constr. Co., 326 N.C. at 146, 388 S.E.2d at 565 (contamination of groundwater and soil by chromic acid caused physical injury to tangible property). Because policy language must be given its plain meaning, we find that the material which Morrisville sent to the Rose Chemical site caused "property damage" within the meaning of the CGL and Indemnity policies.[19]
C. Occurrence
Even if the claims against Morrisville constitute "damages" and "property damage," coverage under the policies exists only if the property damage was "caused by an occurrence." An "occurrence" is defined as "an accident or unexpected event, including continuous or repeated exposure to substantially the same general conditions, which results in ... property damage neither expected nor intended from the standpoint of the insured." CGL policy at Definitions; see also Indemnity policy at Insuring Agreement & Exclusion 3.1. The present dispute concerns whether an "accident or unexpected event" happened at the Rose Chemicals site during 1983-1988, which was the period covered by the CGL and Indemnity policies.
Morrisville claims that an "occurrence" was triggered when the material it sent was improperly disposed of at the Rose Chemicals site, and it was also triggered "through the discovery of the contamination by EPA and state officials and continuing until the contamination is cleaned up." Morrisville Motion for Summary Judgment at 30-31. Fidelity contends that an "occurrence" never took place, because Morrisville purposefully sent the hazardous material to the site.
In Vermont, an "accident or unexpected event" is defined for insurance purposes as an "unexpected happening without intention or design." Commercial Union Ins. Co. v. City of Montpelier, 134 Vt. 184, 186, 353 A.2d 344, 346 (1976). The "unexpected happening" is the harm which occurs, not the act which causes the harm. In other words, an intentional act can constitute an "occurrence," if the harm which *730 results from that act was not expected or intended by the insured.[20]
In the present case, Morrisville intentionally sent PCB-contaminated material to the Rose Chemicals site. However, this intentional act does not negate coverage, because Morrisville neither expected nor intended to damage the site. Moreover, the harm in this case happened after the material reached the site. The EPA certified the site as a legal disposal site for PCB-contaminated material. Morrisville, along with many other utility companies, relied upon this certification. The harm occurred because of the improper and illegal disposal of the hazardous material at the site. Because the improper disposal was an "accident" which resulted in property damage neither expected nor intended by Morrisville, an "occurrence" happened within the meaning of the CGL and Indemnity policies.[21]
The next issue we must decide is whether the "occurrence" happened between 1983 and 1988. Fidelity argues that the evidence in the record is insufficient to determine this issue. We disagree. The record shows that the hazardous materials sent to the Rose Chemicals site in the early 1980's were improperly disposed of at the site. See footnote 17 supra. Morrisville sent its shipment of PCB-contaminated material to the site in 1984. The PCBs eventually dispersed into the air, or leaked into the groundwater, soil, or buildings at the site. See Burns & McDonnell Engineering Co., Report on the Remedial Investigation of the Rose Chemicals Site in Holden, Missouri, February 1990. Damage to the site revealed itself at least by December 1, 1986; the date the EPA notified Morrisville of its status as a potentially responsible party under CERCLA.
In cases involving exposure to toxic substances, courts have used five different rules to determine if an "occurrence" was triggered during the policy period. For example:
(1) The Exposure Rule damage occurs when the environment is first exposed to the toxic chemical; i.e. when the toxin is deposited in the landfill.[22]
(2) The Manifestation Rule damage occurs when it becomes apparent to the injured party; i.e. damage occurs when the EPA or private owner discovers that toxic waste has leaked onto the soil or into the groundwater.[23]
(3) The Double Trigger Rule damage occurs when the environment is first exposed to the toxic chemical and at the time the damage becomes apparent to the injured party.[24]
(4) The Triple or Continuous Trigger Rule damage occurs when the environment *731 is first exposed to the toxic chemical, at the time the damage first becomes apparent, and at all times in between.[25]
(5) The Actual Injury Rule damage occurs when the property is actually harmed by the toxic chemical, but the damage does not have to be apparent because symptoms may manifest themselves well after the injury occurs.[26]
In American Protection Ins. Co. v. McMahan, 151 Vt. 520, 523-24, 562 A.2d 462, 465-66 (1989), the Vermont Supreme Court held that exposure to formaldehyde gas triggered the insurer's duty to defend, because mere exposure to the gas could cause "bodily injury." The court noted that the symptoms of many diseases do not manifest themselves until long after the initial exposure to the toxic chemical. Thus, the court rejected the argument that manifestation of disease was the sole trigger for coverage, because that argument would allow insurers to terminate coverage despite the fact that "bodily injury" had occurred during the policy period. Id. at 524, 562 A.2d at 465.
Like a person exposed to toxic chemicals, the environment does not necessarily display the harmful effects from exposure to PCBs until long after the initial exposure. See Industrial Steel Container Co., 399 N.W.2d at 159-60. The McMahan case suggests that the Vermont Supreme Court would adopt the "exposure rule" to the present case, and it would find that an "occurrence" was triggered when the Rose Chemicals site was first exposed to the PCBs sent by Morrisville.
However, we need not predict which rule the Vermont Supreme Court would adopt in this case, because under any rule an "occurrence" was triggered during the period covered by the policies. As stated earlier, between 1984 and 1986, the material which Morrisville sent to the Rose Chemicals site was improperly disposed of at the site, the PCBs leaked into the environment, and property damage manifested itself to the EPA.[27] Thus, regardless of whether the Vermont Supreme Court were to select the "exposure," "manifestation," "double trigger," "triple trigger," or "actual injury" rule, these facts show that an "occurrence" was triggered within the period covered by the CGL and Indemnity policies. D. Duty to Defend under the CGL Policy
The CGL policy states that Fidelity "shall have the right and duty to defend any suit against [Morrisville] seeking damages on account of ... property damage." CGL policy at Insuring Agreement. Fidelity contends that "absent a pending judicial or administrative proceeding naming the insured as a defendant, the insured's duty to defend does not arise." Fidelity's Proposed Conclusions of Law at 4-5. Specifically, Fidelity contends that it has no duty to defend Morrisville against the claims made by the EPA, because Morrisville is not a defendant in a traditional lawsuit for money damages.
The term "suit" is not defined in the CGL policy. Nonetheless, nothing in the policy indicates that Fidelity's duty to defend is triggered solely by a court or administrative proceeding. The term "suit" is generally defined as an "action to secure justice in a court of law" or an "attempt to recover a right or claim through legal action." Webster's New World Dictionary 1339 (3d ed. 1988). Because the plain *732 meaning of the term "suit" does not hinge on the form of action taken or the nature of the relief sought, we believe that the Vermont Supreme Court would find that the term encompasses the EPA's claims against Morrisville.[28]
The EPA notified Morrisville that it was a potentially responsible party, and notified Morrisville that it "may be obligated to implement any response action as determined necessary by EPA and may also be liable for all costs incurred by the government in responding to any release or threatened release at the [Rose Chemicals] site." EPA Letter at 1, Dec. 1, 1986. The EPA found that PCBs had contaminated the air, soil, and groundwater at the site, and it was "seeking to determine whether or not [Morrisville would] voluntarily undertake and/or participate in appropriate response actions at the site." Id. at 2-3. The EPA explained that Morrisville:
should notify EPA, in writing, within fourteen (14) calendar days from the receipt of this letter of its commitment to participate in the negotiations and site clean-up process. Failure to respond in the required time will be the basis for the EPA's determination that [Morrisville] declines any participation in the clean-up of the site. EPA will then proceed with its discussions with other participating potentially responsible parties for complete clean-up of the site and consider use of its enforcement options against [Morrisville].
Id. at 3 (emphasis added). The EPA ended the letter by warning Morrisville that "[d]ue to the seriousness of the problem at the site and the attendant legal ramifications, the Agency strongly encourages [Morrisville] to submit a written response within the time frame specified herein. We hope that you will give these matters your immediate attention." Id. at 6 (emphasis added).
In Hazen Paper Co. v. United States Fidelity & Guar. Co., 407 Mass. 689, 693-94, 555 N.E.2d 576, 579-80 (1990), the insured received a letter from the EPA which was almost identical to the EPA's letter to Morrisville. The Massachusetts Supreme Judicial Court held that the EPA's letter set forth "a claim of damages on account of property damage," and the letter constituted a "suit" within the meaning of the policy at issue. Id. at 695, 555 N.E.2d at 580. Based upon a thorough examination of CERCLA, the court stated that:
Since the standard policy language was drafted, the EPA processes for the enforcement of obligations to aid in the cleaning up of environmental pollution have moved away from the use of lawsuits toward the use of agency demands for participation in remedial action. Those requests are dangerous for the alleged polluter to ignore because they often result in dispositive, extrajudicial solutions. The consequences of the receipt of the EPA letter were so substantially equivalent to the commencement of a lawsuit that a duty to defend arose immediately. The EPA letter was not the equivalent of a conventional demand letter based on a personal injury claim. [citations omitted].
Id. at 695-96, 555 N.E.2d at 581.
Like Hazen, the consequences of the EPA's letter to Morrisville was the equivalent of the start of a lawsuit. The EPA clearly warned Morrisville of the probability of imminent government action, enforceable by a court of law, if it did not respond to the letter. The record shows that if Morrisville had not responded to the EPA's demands, then it would have been named as a defendant in the lawsuit now pending in the United States District Court for the Western District of Missouri.
We recognize that some courts have held that a letter from the EPA notifying the insured of its status as a potentially responsible party under CERCLA was not a "suit" within the meaning of the policy at issue. See Maryland Casualty Co. v. Armco, Inc., 822 F.2d 1348, 1354 (4th Cir. 1987); Detrex Chem. Indus., Inc. v. Employers *733 Ins. of Wausau, 746 F.Supp. 1310, 1315 (N.D.Ohio 1990); Arco Indus. Corp. v. Travelers Ins. Co., 730 F.Supp. 59, 68 (W.D.Mich.1989). We decline to adopt this approach for two reasons. First, the fact that another reasonable interpretation of the term "suit" exists simply creates an ambiguity. Under Vermont law, any ambiguity must be strictly construed in favor of Morrisville, not Fidelity.
Secondly, the cases cited above failed to consider the unique aspects of CERCLA. Morrisville had little prospect of avoiding financial responsibility under CERCLA, because liability is not based on fault and the available defenses are very limited. 42 U.S.C. §§ 9607(a), (b). Furthermore Morrisville's potential liability was substantial, because it could be held jointly and severally liable for the entire cost of cleaning-up the Rose Chemicals site. Hazen, 407 Mass. at 697, 555 N.E.2d at 581. Thus, to protect itself from financial devastation, it was critical for Morrisville to become involved in settlement discussions with the EPA and the Steering Committee.
In addition, any court action by the EPA under CERCLA is limited to the administrative record, and a court can consider only whether the EPA's "decision was arbitrary and capricious or otherwise not in accordance with law." 42 U.S.C. §§ 9613(j)(1), (j)(2). Therefore, Morrisville's participation in the development of the administrative record was also crucial to protecting its interests. If it had not agreed to actively respond to the EPA's letter, Morrisville could have lost the opportunity to protect its interests well before the EPA brought a lawsuit against it. In other words, Morrisville had no practical choice other than to voluntarily comply with the EPA's demands. Consequently, we find that the EPA's letter to Morrisville was sufficiently coercive and adversarial in nature to constitute a "suit" within the meaning of the CGL policy.[29]
E. Public Policy
Finally, Fidelity argues that public policy precludes coverage in this case, because the no-fault, joint and several liability found under CERCLA was "unprecedented and was clearly unforseen when the policy at issue in this action was issued." Fidelity Motion for Summary Judgment at 11. We disagree. In State of Vermont v. Glens Falls Ins. Co., 137 Vt. 313, 319-20, 404 A.2d 101, 105 (1979), the Vermont Supreme Court held that public policy did not preclude insurance coverage for punitive damages. We believe that the Vermont Supreme Court would also find that public policy does not preclude coverage for CERCLA clean-up costs either.
As stated previously, CERCLA clean-up costs are "damages" within the meaning of the policies at issue in this case. These costs are simply compensation for restoring land and water to its natural state. See AIU Ins. Co., 51 Cal.3d at 836, 274 Cal.Rptr. at 841-42, 799 P.2d at 1274-75. Liability for the cost of restoring property to its natural state is hardly unprecedented. These costs have long been recognized as a measure of compensatory damages in common law pollution cases. Minnesota Mining & Mfg. Co., 457 N.W.2d at 183-84.
Moreover, an insurer is not subject to unlimited liability in CERCLA cases, because insurance policies have monetary limits. In addition, the "pollution exclusion" provisions were expressly deleted from both the CGL and the Indemnity policies. *734 See Vermont Liability Endorsement Attached to Policies. This indicates that the parties intended for these policies to cover any claims made against Morrisville concerning the discharge or release of pollutants.
Finally, Congress passed CERCLA in 1980 and amended it in 1986. The record shows that the CGL and Indemnity policies were issued by Fidelity from 1983 to 1987. We think it is unlikely that Fidelity was not aware of the risks of CERCLA liability when it issued Morrisville the policies years after CERCLA went into effect. Even if the risk of liability was not specifically known by the parties, "[t]he very title `Comprehensive General Liability Insurance' suggests the expectation of maximum coverage.... If a risk neither party contemplated develops, the comprehensive policy must necessarily cover that risk. Indeed, protection against unknown risks is the very reason the insured purchases comprehensive liability insurance." C.D. Spangler Constr. Co., 326 N.C. at 152 n. 12, 388 S.E.2d at 569 n. 12, (quoting, Note, The Applicability of General Liability Insurance to Hazardous Waste Disposal, 57 S.Cal.L.Rev. 745, 757 (1984)).
We believe that public policy is better served if a responsible party, like Morrisville, acts quickly to remedy pollution from hazardous wastes, rather than wait for a judge to order it to clean up the site. Accord Outboard Marine Corp., 570 N.E.2d at 1162. Therefore, we find that coverage for CERCLA clean-up costs does not violate public policy in Vermont.
III. Bad Faith
As discussed above, the CGL and Indemnity policies provide coverage for the claims brought against Morrisville concerning the clean-up of the Rose Chemicals site. Morrisville submitted these claims to Fidelity in 1986 and Fidelity denied coverage over two years later. Morrisville contends that Fidelity's denial of coverage "was made in bad faith and with disregard for the terms of the relevant policies and the claims against Morrisville, such that attorneys' fees should be awarded." 1st Amended Complaint at ¶ 42. We agree that Morrisville is entitled to attorneys fees if Fidelity's denial of coverage was made in bad faith.[30] However, a material question of fact exists concerning whether Fidelity's dilatory actions constitute bad faith.
An insurer's legal duty is that of a "fiduciary." Myers v. Ambassador Ins. Co., Inc., 146 Vt. 552, 555-56, 508 A.2d 689, 691 (1986). When determining if a third party's claim against an insured is covered under a policy, the insurer must act in good faith, and it must "take the insured's interests into account." Id. at 556, 508 A.2d at 691. The insurer must also "diligently investigate the facts and the risks involved in the claim, and should rely only upon persons reasonably qualified to make such an assessment." Id.
Morrisville argues that the facts clearly show that Fidelity acted in bad faith, because:
[Fidelity] denied coverage over two years after the claims were made against Morrisville and the insured sought defense and indemnification.
[Fidelity's] denial letter ... indicates three grounds for denial. Of these three ... [the defense] of the so-called pollution exclusion clause was not even available to the insurer [because the clause was expressly deleted from the policies].
[Fidelity] refused to assume the defense of Morrisville when the insurance contract language did not clearly support such a refusal. [citations omitted].
[Fidelity] acted in a wanton and vexatious way and harassed its insured by *735 filing a duplicative lawsuit in Missouri a month after this case was filed.
Morrisville's Motion in Opposition at 19-20. These facts, if proven, may be adequate to support Morrisville's assertion that Fidelity acted in bad faith. However, the question of whether an insurer acts in bad faith in refusing to defend its insured is generally one for the trier of fact. Myers, 146 Vt. at 557, 508 A.2d at 692. This issue only becomes a question of law if a reasonable person could draw but one conclusion from the uncontroverted evidence in the record. Id. Such is not the case here.
Fidelity argues that the fact that courts are sharply divided on the issue of coverage for CERCLA clean-up costs and the fact that no precedent exists in Vermont on this issue negate any claim that it acted in bad faith. Fidelity concludes that in "such a murky and shifting area of law, determination of the appropriate course of action is dependent on a difficult process of assessing the viability of legitimate policy defenses weighed against the risks and expense of litigation." Fidelity Motion for Summary Judgment at 14. We would not go so far as to characterize the law on this issue as "murky," but we do agree that the question of whether liability policies cover CERCLA clean-up costs is a complex and widely litigated issue. Consequently, the trier of fact should hear all the evidence before deciding whether Fidelity's decision to deny coverage was made in good faith and was reasonable under the circumstances.
CONCLUSION
Under the plain meaning of the terms found in the CGL and Indemnity policies, the CERCLA clean-up costs assessed against Morrisville are "damages because of property damage caused by an occurrence." In addition, the EPA's letter to Morrisville is a "suit" within the meaning of the CGL policy. Therefore, Fidelity must defend and indemnify Morrisville for the claims brought against it concerning the clean-up of the Rose Chemicals site, pursuant to CERCLA. However, genuine issues of material fact exist concerning whether Fidelity's denial of coverage was made in bad faith.
ACCORDINGLY, IT IS ORDERED that Morrisville's motion for summary judgment is GRANTED in part and DENIED in part. Fidelity's motion for summary judgment is DENIED. A trial date will be set for Morrisville's claim of bad faith at the court's convenience.
NOTES
[1] CERCLA establishes strict liability for: (1) present and former owners of hazardous waste disposal sites; (2) transporters of the wastes; and (3) generators of the waste who arrange for the transport and disposal of the wastes. Liability for clean-up costs may be imposed on one, two, or all three of the responsible parties, regardless of each entity's relative degree of fault, or responsibility for creating the polluted site. 42 U.S.C. § 9607(a).
Morrisville is subject to liability under section 9607, because of its status as a generator of hazardous waste which was transported to and disposed of at the Rose Chemicals site.
[2] The Steering Committee and the EPA signed and implemented two administrative orders concerning the clean-up of the Rose Chemicals site. See In re Central Louisiana Elec. Co., Inc., Admin. Order on Consent No. 86-F-0019 (EPA Region VII Nov. 12, 1986) & Admin. Order on Consent No. 87-F-0007 (EPA Region VII Oct. 29, 1987). Pursuant to these orders, the hazardous waste at the site was evaluated, the site was stabilized, and millions of pounds of PCB contaminated material were removed from the site.
[3] This case is entitled Central Ill. Public Serv. Co. v. Industrial Oil Tank & Line Cleaning Serv., 730 F.Supp. 1498 (W.D.Mo.1990). The Steering Committee seeks, among other things, a declaratory judgment that each potentially responsible party who has not signed a consent agreement with the EPA or the Steering Committee is jointly and severally liable for all the clean-up costs for the Rose Chemicals site. Based on the record before us, this case is still pending before the United States District Court for the Western District of Missouri.
[4] On November 6, 1989, Fidelity filed an action against Morrisville in the United States District Court for the Western District of Missouri. Fidelity later withdrew that action. Thus, the only case which concerns the issue of coverage under the CGL and Indemnity policies is the case presently before this court.
[5] According to section 188, the significant factors involved in determining the choice of law in contract cases are:
(1) ... 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.
[6] The following cases also stand for the principle that an insurance policy should be construed according to the law of the state where the policy was made and where the insured resides. Westinghouse Elec. Corp. v. Liberty Mut. Ins. Co., 233 N.J.Super. 463, 559 A.2d 435, 441-42 (1989); Triangle Publications, Inc. v. Liberty Mut. Ins. Co., 703 F.Supp. 367, 369-70 (E.D.Pa.1989); Atlantic Wood Indus., Inc. v. Lumbermens Underwriting Alliance, 196 Ga.App. 503, 396 S.E.2d 541, 542 (1990), cert. denied, ___ U.S. ___, 111 S.Ct. 958, 112 L.Ed.2d 1046 (1991); Liberty Mut. Ins. Co. v. Triangle Indus., Inc., 390 S.E.2d 562, 567 (W.Va.1990); Cf. Avemco Ins. Co. v. Aerotech Ltd., 677 F.Supp. 35, 38 (D.Mass.1987) (even though the accident took place in Massachusetts, Vermont law governed because the policy was made there and the insured's principal place of business was in Vermont).
We recognize that some courts have held that the law of the state where the hazardous waste is located governs a dispute concerning policy coverage for CERCLA clean-up costs. See National Starch & Chem. Corp. v. Great Am. Ins. Co., 743 F.Supp. 318, 326 (D.N.J.1990); A. Johnson & Co., Inc. v. Aetna Casualty & Sur. Co., 741 F.Supp. 298, 300-01 (D.Mass.1990), aff'd, 933 F.2d 66 (1st Cir.1991); Leski, Inc. v. Federal Ins. Co., 736 F.Supp. 1331, 1334-37 (D.N.J.1990); Travelers Indem. Co. v. Allied-Signal, Inc., 718 F.Supp. 1252, 1252-55 (D.Md.1989). We believe that the Vermont Supreme Court would not adopt this view, because, under Vermont law, the state where the policy was made, delivered, and paid for has the most significant relationship to a dispute concerning policy coverage for a one-time deposit of hazardous waste in another state.
[7] Previously, Fidelity had denied coverage because:
1. Relief sought is not for property damage as covered under our policy.
2. There has not been an occurrence as covered under our policy of insurance.
3. The policy specifically excludes coverage for losses due to pollution. Please refer to exclusion (f), on the Casualty 20 (9-82) form entitled Comprehensive General Liability Insurance.
See Fidelity Letter to Morrisville, Dec. 14, 1988. Because Fidelity raised these three defenses only, Morrisville contends that Fidelity waived the defense that CERCLA clean-up costs do not constitute "damages."
As a matter of Vermont law, Fidelity waived its right to raise additional defenses when it gave Morrisville three specific reasons for denying coverage. Segalla v. United States Fire Ins. Co., 135 Vt. 185, 189, 373 A.2d 535, 538 (1977); Armstrong v. Hanover Ins. Co., 130 Vt. 182, 187-88, 289 A.2d 669, 672-73 (1972); see also Hamlin v. Mutual Life Ins. Co., 145 Vt. 264, 267-70, 487 A.2d 159, 161-62 (1984). However, Fidelity's letter concerned the CGL policy only, not the Indemnity policy. Consequently, Fidelity did not waive the "damages" defense for the Indemnity policy. Because the language is identical in both policies, our analysis of the meaning of the term "damages" applies to both the CGL and the Indemnity policies.
[8] Other courts have declined to follow the Eighth Circuit's analysis of Missouri law. See Independent Petrochemical Corp. v. Aetna Casualty & Sur. Co., 944 F.2d 940 (D.C.Cir.1991); Jones Truck Lines v. Transport Ins. Co., Civ. No. 88-5723 (E.D.Pa. May 10, 1989) (found in Westlaw at 1989 WL 49517); See also NEPACCO, 842 F.2d at 988 (three dissenting judges state that, under Missouri law, the plain meaning of the term "damages" encompasses CERCLA clean-up costs).
[9] A Vermont court may take judicial notice of the dictionary definition of terms not defined in an insurance policy. Simpson v. State Mut. Life Assurance Co. of Am., 135 Vt. 554, 55, 382 A.2d 198, 200 (1977).
[10] See Independent Petrochemical Corp. v. Aetna Casualty & Sur., 944 F.2d 940 (D.C.Cir.1991); Claussen v. Aetna Casualty & Sur. Co., 754 F.Supp. 1576, 1582-83 (S.D.Ga.1990) (applying Georgia law); Federal Ins. Co. v. Susquehanna Broadcasting Co., 727 F.Supp. 169, 174 (M.D.Pa. 1989) (applying Pennsylvania law), amended in part on reh'g, 738 F.Supp. 896 (M.D.Pa.1990), aff'd, 928 F.2d 1131 (3d Cir.1991); National Indem. Co. v. United States Pollution Control, Inc., 717 F.Supp. 765, 766-67 (W.D.Okla.1989) (applying Oklahoma law); Chesapeake Utils. Corp. v. American Home Assurance Co., 704 F.Supp. 551, 558-61, 565 (D.Del.1989) (applying Maryland law and finding that the Fourth Circuit misstated Maryland law in Maryland Casualty Co. v. Armco, Inc., 822 F.2d 1348 (4th Cir.1987)); Intel Corp. v. Hartford Accident & Indem. Co., 692 F.Supp. 1171, 1186-93 (N.D.Cal.1988) (applying California law); United States Fidelity & Guar. Co. v. Thomas Solvent Co., 683 F.Supp. 1139, 1168 (W.D.Mich.1988) (applying Michigan law); Centennial Ins. Co. v. Lumbermens Mut. Casualty Co., 677 F.Supp. 342, 349-50 (E.D.Pa.1987) (applying Pennsylvania law); New Castle County v. Hartford Accident & Indem. Co., 673 F.Supp. 1359, 1365-66 (D.Del.1987) (applying Delaware law); Township of Gloucester v. Maryland Cas. Co., 668 F.Supp. 394, 398-400 (D.N.J.1987) (applying New Jersey law); Fireman's Fund Ins. Co. v. Ex-Cell-O Corp., 662 F.Supp. 71, 75 (E.D.Mich.1987) (applying Michigan law); AIU Ins. Co. v. The Superior Court of Santa Clara County, 51 Cal.3d 807, 814, 274 Cal.Rptr. 820, 826, 799 P.2d 1253, 1259 (1990); Atlantic Wood Indus., Inc. v. Lumbermens Underwriting Alliance, 196 Ga.App. 503, 396 S.E.2d 541, 543 (1990), cert. denied, ___ U.S. ___, 111 S.Ct. 958, 112 L.Ed.2d 1046 (1991); Outboard Marine Corp. v. Liberty Mut. Ins. Co., 212 Ill. App.3d 231, 156 Ill.Dec. 432, 570 N.E.2d 1154, 1162, appeal allowed, 139 Ill.2d 598, 159 Ill.Dec. 110, 575 N.E.2d 917 (1991) (an injunction sought by the EPA is also "damages" within the meaning of the policy); United States Fidelity & Guar. v. Specialty Coatings Co., 180 Ill.App.3d 378, 390-95, 129 Ill.Dec. 306, 314-17, 535 N.E.2d 1071, 1079-82, appeal denied, 127 Ill.2d 643, 136 Ill.Dec. 609, 545 N.E.2d 133 (1989); Hazen Paper Co. v. United States Fidelity & Guar. Co., 407 Mass. 689, 699, 555 N.E.2d 576, 583 (1990); United States Aviex Co. v. Travelers Ins. Co., 125 Mich.App. 579, 586, 336 N.W.2d 838, 843 (1983); CPS Chemical Co., Inc. v. Continental Ins. Co., 222 N.J.Super. 175, 536 A.2d 311, 315 (1988); Broadwell Realty Servs., Inc. v. Fidelity & Casualty Co. of N.Y., 218 N.J.Super. 516, 525-30, 528 A.2d 76, 81-83 (1987); Boeing Co. v. Aetna Casualty & Sur. Co., 113 Wash.2d 869, 877-85, 784 P.2d 507, 511-15 (1990).
[11] State courts have also held that clean-up costs mandated by state environmental agencies are "damages" within the meaning of comprehensive general liability policies. See footnote 10, supra; see also Minnesota Mining & Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175, 182 (Minn.1990) (claims asserted by state environmental agency and the EPA against the insured amount to a claim for damages); C.D. Spangler Constr. Co. v. Industrial Crankshaft & Eng'g Co., Inc., 326 N.C. 133, 388 S.E.2d 557, 569 (1990) (viewing the policy at issue "as a whole" shows that "a reasonable person in the position of the insured may have understood that the term `damages' included state-ordered environmental cleanup costs").
[12] See Cincinnati Ins. Co. v. Milliken & Co., 857 F.2d 979, 981 (4th Cir.1988) (applying South Carolina law); Maryland Casualty Co. v. Armco, Inc., 822 F.2d 1348, 1352 (4th Cir.1987) (applying Maryland law), cert. denied, 484 U.S. 1008, 108 S.Ct. 703, 98 L.Ed.2d 654 (1988); Travelers Indem. Co. v. Allied-Signal, Inc., 718 F.Supp. 1252, 1255 (D.Md.1989) (applying Maryland law); Aetna Casualty & Sur. Co. v. Gulf Resources & Chem. Corp., 709 F.Supp. 958, 961-62 (D.Idaho 1989) (court does not specify which state law it is applying); W.C. Hayes v. Maryland Casualty Co., 688 F.Supp. 1513, 1515 (N.D.Fla.1988) (applying Florida law); Patrons Oxford Mut. Ins. Co. v. Marois, 573 A.2d 16, 18-20 (Me.1990).
[13] In any event, the record contains a report which indicates that PCBs have been detected in an area adjacent to the Rose Chemicals site. See Burns & McDonnell Engineering Co., Report on the Remedial Investigation of the Rose Chemicals Site Holden, Missouri, Executive Summary at ES-15 (February 1990).
[14] Under section 9607(a)(4)(B), a polluter is liable for "any other necessary costs of response incurred by any other person consistent with the national contingency plan." In this case the "other person" is the Steering Committee. When it signed the Consent Party Agreement, Morrisville reimbursed the Steering Committee for its share of the clean-up costs, pursuant to section 9607(a)(4)(B).
[15] The EPA sought to recover these costs, pursuant to 42 U.S.C. § 9607(a)(4)(A). This section states that a polluter is liable for "all costs of removal or remedial action incurred by the United States Government...."
[16] AIU Ins. Co. v. Superior Court of Santa Clara County, 51 Cal.3d 807, 843, 274 Cal.Rptr. 820, 846, 799 P.2d 1253, 1279 (1990) (Whatever the dominant motive of the EPA, "the event precipitating their legal action is contamination of property"); Aerojet Gen. Corp. v. San Mateo County Superior Court, 211 Cal.App.3d 216, 257 Cal.Rptr. 621, 633 (1989) (all CERCLA provisions involve the restoration of property to its previously uncontaminated state).
[17] See Burns & McDonnell Engineering Co., Report on the Remedial Investigation of the Rose Chemicals Site Holden, Missouri, (February 1990); Burns & McDonnell Engineering Co., Feasibility Study for the Rose Chemicals Site (January 1990); see also Memo from Steering Committee to Newly Identified Generators of PCB Materials Shipped to the Rose Chemicals Site, at 3-5 (September 26, 1986) (summary of testimony before a committee of Congress concerning improper disposal of PCB contaminated material at the site).
[18] We assume from the record before us that the Rose Chemicals site is privately owned. Nevertheless, the federal government has a property interest in the safety and protection of the natural resources of the United States. C.D. Spangler Constr. Co., 326 N.C. at 145, 388 S.E.2d at 564 (citations omitted); Kipin Indus., Inc. v. American Universal Ins. Co., 41 Ohio App.3d 228, 535 N.E.2d 334, 337 (1987). Thus, any injury to the natural resources at the Rose Chemicals site also damages the federal government's property interest in the site. In any event, nothing in the CGL and Indemnity policies limits coverage to privately owned property, and nothing excludes public property or the public interest in the use and safety of the privately owned property.
[19] The following courts have also found that the contamination of natural resources by a hazardous substance constitutes "property damage" within the plain meaning of a liability policy. Hays v. Mobil Oil Corp., 930 F.2d 96, 102 (1st Cir.1991); NEPACCO, 842 F.2d at 983; Port of Portland v. Water Quality Ins. Syndicate, 796 F.2d 1188, 1194 (9th Cir.1986); AIU Ins. Co., 51 Cal.3d at 836, 274 Cal.Rptr. at 841, 799 P.2d at 1274; Kipin Indus., Inc. v. American Universal Ins. Co., 41 Ohio App.3d 228, 535 N.E.2d 334, 337 (1987); United States Aviex Co. v. Travelers Ins. Co., 125 Mich.App. 579, 589, 336 N.W.2d 838, 843 (1983); CPS Chem. Co. v. Continental Ins. Co., 222 N.J.Super. 175, 188, 536 A.2d 311, 317 (1988); Boeing Co. v. Aetna Casualty & Sur. Co., 113 Wash.2d 869, 784 P.2d 507, 515 (1990).
[20] See State of Vermont v. Glens Falls Ins. Co., 137 Vt. 313, 316, 404 A.2d 101, 103 (1979) (seizure of mobile home was an occurrence because no harm was intended by the insured); Otterman v. Union Mut. Fire Ins. Co., 130 Vt. 636, 638-39, 298 A.2d 547, 549 (1972) (shooting of a policeman was an occurrence because no harm was expected or intended by the insured); Cf. N.W. Elec. Power Co-op., Inc. v. American Motorists Ins. Co., 451 S.W.2d 356, 362-64 (Mo. Ct.App.1969) (damage to land caused by placement of power line outside of easement was an "accident" because the insured did not intend to cause the injury).
[21] See also Centennial Ins. Co. v. Lumbermens Mut. Casualty Co., 677 F.Supp. 342, 346 (E.D.Pa. 1987) ("The dumping of the waste is an occurrence within the policy because it was an accident from the insured's standpoint. The facts do not indicate that [the insured] expected or intended illegal and harmful dumping of its toxic waste."); see also Vermont Mut. Ins. Co. v. Malcolm, 128 N.H. 521, 517 A.2d 800, 802 (1986) (an "accident" is present when an "unexpected, independent and unforseen circumstance exists or happening occurs which produces or brings about the result of injury or death").
[22] See Federal Ins. Co. v. Susquehanna Broadcasting Co., 727 F.Supp. 169, 175 (M.D.Pa.1989), amended in part, 738 F.Supp. 896 (1990), aff'd, 928 F.2d 1131 (1991); United States Fidelity & Guar. Co. v. Thomas Solvent Co., 683 F.Supp. 1139, 1170 (W.D.Mich.1988); Centennial Ins. Co. v. Lumbermens Mut. Casualty Co., 677 F.Supp. 342, 346-47 (E.D.Pa.1987); Fireman's Fund Ins. Co. v. Ex-Cell-O Corp., 662 F.Supp. 71, 76 (E.D.Mich.1987).
[23] Mraz, 804 F.2d at 1328; Peerless Ins. Co. v. Strother, 765 F.Supp. 866, 870 (E.D.N.C.1990).
[24] Transamerica Ins. Co. v. Bellefonte Ins. Co., 490 F.Supp. 935, 938-39 (E.D.Pa.1980) (case concerns toxic drugs ingested by pregnant women).
[25] Liberty Mut. Ins. Co. v. Triangle Indus. Inc., 765 F.Supp. 881, 885 (D.W.Va.1991); Time Oil Co. v. Cigna Property & Casualty Ins. Co., 743 F.Supp. 1400, 1417 (W.D.Wash.1990); Gottlieb v. Newark Ins. Co., 238 N.J.Super. 531, 570 A.2d 443, 446-47 (1990).
[26] Detrex Chem. Indus., Inc. v. Employers Ins. of Wausau, 746 F.Supp. 1310, 1324-25 (N.D.Ohio 1990); Triangle Publications, Inc. v. Liberty Mut. Ins. Co., 703 F.Supp. 367, 370-71 (E.D.Pa.1989); Industrial Steel Container Co. v. Fireman's Fund Ins. Co., 399 N.W.2d 156, 159-60 (Minn.Ct.App. 1987).
Cf. American Home Products Corp. v. Liberty Mut. Ins. Co., 748 F.2d 760, 764 (2d Cir.1984) (for cases involving exposure to prescription drugs, an "occurrence" is triggered by an actual injury to the body).
[27] See Liberty Mut. Ins. Co. v. Triangle Indus., Inc., 765 F.Supp. 881, 885 (D.W.Va.1991) (manifestation of harm occurs on date when insured was notified by EPA that it was a potentially responsible party).
[28] See also C.D. Spangler Constr. Co., 326 N.C. at 154, 388 S.E.2d at 570 ("a reasonable person in the position of the insured may not have understood the term `suit' as limiting [the insurer's] duty to defend until a court proceeding had been instigated.")
[29] The following courts have also held that letters from the EPA constituted a "suit" within the meaning of a comprehensive general liability policy, if the EPA threatened the use of the legal process to make the insured take action in the clean-up of a hazardous waste site. See Ryan v. Royal Ins. Co. of Am., 916 F.2d 731, 738-39 (1st Cir.1990); Time Oil v. Cigna Property & Casualty Ins. Co., 743 F.Supp. 1400, 1420 (W.D.Wash. 1990); Ray Indus. Inc. v. Liberty Mut. Ins. Co., 728 F.Supp. 1310, 1314 (E.D.Mich.1989); Centennial Ins. Co. v. Lumbermens Mut. Casualty Co., 677 F.Supp. 342, 349-50 (E.D.Pa.1987); Fireman's Fund Ins. Co. v. Ex-Cell-O Corp., 662 F.Supp. 71, 75 (E.D.Mich.1987); Cf. Avondale Indus., Inc., 887 F.2d at 1206 (letter from state agency demanding that the insured clean-up a hazardous waste site or face legal consequences was a "suit" within the meaning of the policy); C.D. Spangler Constr. Co., 326 N.C. at 153-54, 388 S.E.2d at 570 (order from state agency concerning environmental clean-up constituted a "suit" within the meaning of the policies).
[30] Burlington Drug Co., Inc. v. Royal Globe Ins. Co., 616 F.Supp. 481, 483 (D.Vt.1985) (award of attorneys' fees "should be permitted, but only where there is a showing that the insurer's denial was made in bad faith or with vexatious disregard for the terms of the policy or the claims against the insured"); See also Time Oil Co. v. Cigna Property & Casualty Ins. Co., 743 F.Supp. 1400, 1421 (W.D.Wash.1990) ("courts and commentators agree that the damages for a refusal to defend include costs and reasonable attorneys' fees incurred by the insured in defending itself, plus consequential damages stemming from the [insurer's] breach"). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555423/ | 775 F.Supp. 1227 (1991)
DANELLA SOUTHWEST, INC., Plaintiff,
v.
SOUTHWESTERN BELL TELEPHONE COMPANY, Defendant.
No. 88-0578-C-5.
United States District Court, E.D. Missouri, E.D.
October 16, 1991.
*1228 *1229 Thomas F. Jones, Clayton, Mo., John E. Price and Joseph D. Sheppard, Woolsey, Fisher, Whiteaker & McDonald, Springfield, Mo., for plaintiff.
Thad Hollie, Jr., Southwestern Bell Telephone Co., St. Louis, Mo., for defendant.
MEMORANDUM
LIMBAUGH, District Judge.
Plaintiff Danella Southwest, Inc. is a corporation engaged in the construction and excavation business. Defendant Southwestern Bell Telephone Company is a corporation engaged in the business of providing telephone service in several states including Missouri. Defendant contracted with plaintiff to excavate and remove dirt that, unknown to either party, was contaminated with 2,3,7,8 tetraclorodibenzo-p dioxin ("dioxin"). This action arises from a dispute between plaintiff and defendant as to their respective liability for the cost of containing the dioxin-contaminated dirt.
Plaintiff filed a three count second complaint against defendant. In Count I plaintiff seeks a declaration that it is not liable to defendant under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9613, for contribution of the costs incurred by defendant in containing the dioxin-contaminated dirt. In Count II plaintiff seeks to hold defendant liable for a breach of contract. Alternatively, plaintiff seeks to hold defendant liable on the theory of promissory estoppel. In Count III plaintiff seeks to hold defendant liable for a prima facie tort.
Defendant filed a four count second amended counterclaim against plaintiff. In Count I defendant seeks to hold plaintiff liable for a breach of contract. In Count II defendant seeks indemnification. In Count III defendant seeks to hold plaintiff liable for negligence. In Count IV defendant seeks contribution from plaintiff under CERCLA for all costs incurred by defendant in containing the dioxin-contaminated dirt.
This action was tried before the Court on September 10, September 11, September 12, September 13, and September 14, 1990. The Court, having considered the pleadings, *1230 testimony of witnesses, and documents admitted into evidence, hereby makes the following findings of fact and conclusions of law as required by Fed. R.Civ.P. 52.
I. Findings of Fact
James Danella is the sole owner of a holding company that owns plaintiff and fifteen other construction companies operating in thirty states. The principal business of Mr. Danella's construction companies is digging trenches and laying cable for power companies. Mr. Danella's entire enterprise employs between 1,500 and 1,800 employees and has over 3,500 pieces of equipment.
Defendant approached Mr. Danella after learning of his excellent reputation and informed Mr. Danella that there was a lot of work for a good contractor in the State of Missouri. Defendant invited Mr. Danella to set up an operation in Missouri and promised him that defendant would have enough work to keep ten work crews busy. Defendant did not state how long it would offer work to Mr. Danella's operation. Mr. Danella accepted defendant's invitation and incorporated plaintiff in the State of Missouri in late 1984. Mr. Danella spent 2½ million dollars in start-up costs for plaintiff.
Defendant utilizes continuing unit price agreements with all of the contractors that perform excavation and construction work for it. In a continuing unit price agreement defendant and the contractor agree to a schedule of prices, i.e., the hourly cost for the use of a backhoe, the hourly wage for a backhoe operator for any excavation or construction work to be done in a designated area. The continuing unit price agreement sets forth a period, generally one year, in which such schedule of prices is effective. When defendant provided a job for the contractor in the area covered by the continuing unit price agreement, the contractor would do the job for the prices set forth in the continuing unit price agreement. The continuing unit price agreements contain other provisions that govern the relationship between defendant and the contractor. In paragraph 1, the continuing unit price agreements provide:
The Telephone Company does not commit itself to order any specific quantity of work under this agreement and may have the same or similar work performed by its own employees or other contractors; but, so long as this agreement continues in existence, the Contractor agrees to perform for the Telephone Company, at the scheduled prices and in the geographic locations listed in the Continuing Unit Price Schedule attached hereto and incorporated herein by this reference, such work as is specified in job requests as may be issued from time to time by the Telephone Company.
In paragraph 4 the continuing unit price agreements provide:
This agreement may be terminated by either party giving thirty days written notice to the other party. Jobs in progress at the time of termination will be continued under this agreement until completed by the Contractor and accepted by the Telephone Company.
After Mr. Danella set up plaintiff in Missouri, plaintiff entered into continuing unit price agreements with defendant for the purpose of laying cable. On July 9, 1985 plaintiff and defendant entered into a continuing unit price agreement whereby plaintiff would bury cable and service wire for defendant in the area designated as Manchester North. The area of Manchester North includes the city of Eureka, Missouri. On February 12, 1986 defendant asked plaintiff to dig a trench and place buried cable along North Street in Eureka, Missouri. Defendant considered the job to be of an urgent nature.
The North Street site in Eureka is approximately one mile from Times Beach, Missouri. Prior to 1982 an asphalt contractor sprayed dioxin-contaminated waste oils on the streets in Times Beach, Missouri. In 1982 the residents of Times Beach were evacuated due to dioxin contamination. Prior to 1984 dioxin-contaminated waste oil was also sprayed on East North Street in Eureka, Missouri. In 1984 the Environmental Protection Agency ("EPA") determined *1231 that the shoulders of East North Street were contaminated by dioxin with levels up to 6 parts per billion ("ppb").[1] The EPA placed a layer of bituminous pavement over the contaminated area on East North Street in order to contain the dioxin and mitigate the possible hazard at the site.
From February 11, 1986 to February 13, 1986 William Dye, an employee of defendant, prepared and mailed an application for a permit to Eureka City Hall. In the permit defendant requested permission to
Place buried cable along West North Street as shown on the attached work prints. Saw cut and restore 357 feet asphalt street.
Although the permit only mentioned excavation on West North Street, the map attached to the permit shows that the excavation extended from West North Street onto East North Street. The application for a permit was approved by Jim Branscum, the building commissioner of the City of Eureka. On February 19, 1986 Ernie Flora, an employee of plaintiff, visited Mr. Branscum at Eureka City Hall and picked up the approved permit. It was plaintiff's responsibility to arrange for a place to dump the excavated dirt. While at Eureka City Hall, Mr. Flora asked Mr. Branscum if there was any place available to dump the excavated dirt. At that time Mr. Mark Brummit intervened and gave permission to dump the excavated dirt on property leased by Mr. Brummit and owned by Mr. Russell J. Schwarz. The property, located on Williams Road in Eureka, was formerly used as a gas station. There was no mention of dioxin during this conversation between Mr. Branscum, Mr. Flora, and Mr. Brummit.
The job was to be performed by plaintiff pursuant to the continuing unit price agreement in effect since July 9, 1985 for the Manchester North area and Order No. 0610105. The work was performed by plaintiff between February 24, 1986 and March 3, 1986. Plaintiff was paid approximately $30,000.00 to complete the job. Kelly King was plaintiff's foreman at the North Street site. As foreman Mr. King was responsible for the supervision of plaintiff's work crew.[2] Mr. King was also responsible for contacting utility companies to determine the locations of buried water, electric, gas, and sewer lines.[3] Mr. King visited utility companies to obtain up-to-date information because the maps supplied by utility companies were often inaccurate, and if plaintiff inadvertently damaged or ruptured a utility line or cable, plaintiff paid to fix it. Before plaintiff began excavation on North Street Mr. King visited James Thomas Stark, an employee of the City of Eureka Water Department, to ascertain where water lines were located under North Street.
Toward the completion of the North Street job plaintiff learned that it had been digging in dioxin-contaminated dirt. There is a factual dispute as to who notified Mr. King that the excavated dirt on East North Street was contaminated with dioxin. Mr. Stark testified that he notified Mr. King of the contamination when he revisited the site after plaintiff inadvertently ruptured a water line on East North Street during excavation. Mr. King testified, however, that he learned of the dioxin contamination *1232 from the mayor of Eureka after the rupture of the water line.
At the time plaintiff learned of the dioxin contamination, plaintiff had completed excavation of the trench and had laid the pipe and cable. Furthermore, plaintiff had hauled the last pile of dioxin-contaminated dirt to the Williams Road site, and had begun backfilling the trench with gravel. After plaintiff learned of the dioxin contamination, plaintiff ceased its operations and called Thomas Goughenour, a construction supervisor employed by defendant.[4] William Ruck, the employee of plaintiff who hauled dirt away from the North Street site and dumped it on the Schwarz property, was asked by an EPA employee to identify the piles of dirt that had come from the East North Street project. Mr. Ruck identified approximately three piles. Mr. King fenced in these piles and covered them with plastic.
On September 23, 1986 the EPA issued Administrative Order No. 86-F-0009 to plaintiff and defendant requiring them to prepare and carry out a plan to manage and contain the dioxin-contaminated soil at their expense. On October 22, 1987 plaintiff and defendant entered into an Administrative Consent Order with the EPA whereby the parties agreed to prepare and perform a plan to contain the dioxin-contaminated soil in a secure on-site storage facility. Defendant subsequently paid for the cost of building the structure to contain the dioxin. Defendant also paid Mr. Schwarz for his property and paid Mr. Schwarz's legal fees.[5] Defendant expended a total of $223,610.75 in containing the dioxin-contaminated dirt in accordance with the Administrative Consent Order signed by plaintiff and defendant.
Defendant sought for plaintiff to contribute to the containment cost of the dioxin-contaminated dirt. Plaintiff refused to contribute on the ground that the excavation of the dioxin-contaminated dirt was not its fault. When defendant realized that negotiations over contribution for the containment costs were futile, defendant decided to stop doing business with plaintiff.
On September 30, 1987 defendant canceled all of plaintiff's outstanding continuing unit price agreements and informed plaintiff that it would no longer accept any bids from plaintiff for future work. The termination of the outstanding continuing unit price agreements was effective October 30, 1987. Defendant cited as a reason for the termination "quality and coordination problems." Plaintiff, however, believes that defendant terminated its continuing unit price agreements and refused to do further business in retaliation for plaintiff's refusal to contribute to the containment costs. Plaintiff had a job in progress on seven of the continuing unit price agreements. Defendant permitted plaintiff to complete the jobs in progress, accepted the completed work on those jobs, and paid plaintiff.
Although plaintiff came to Missouri in order to do work for defendant, plaintiff expanded its business to do work for Continental Telephone ("ConTel"). Plaintiff also did a small amount of business for other customers. After defendant terminated the continuing unit price agreements with plaintiff, plaintiff was forced to go out of business in Missouri because its business with other clients in Missouri was insufficient to justify its existence here.
The EPA and the Missouri Department of Natural Resources ("MDNR") prepared lists of confirmed dioxin sites. The MDNR periodically sent defendant a list of confirmed dioxin sites. Plaintiff, however, did not receive such lists. Defendant entered dioxin sites from this list into a computer data base. If a map of a particular service area was requested, the printout would reveal whether the service area was the location of a confirmed dioxin site. The EPA designated the East North Street site as a dioxin site in 1984. The MDNR added the North Street site as a confirmed dioxin site on January 5, 1984. There is no indication *1233 that defendant received a list designating East North Street as a confirmed dioxin site prior to plaintiff's excavation of the dioxin-contaminated dirt.[6]
Count I of Plaintiff's Complaint and Count IV of Defendant's Counter-claim Contribution under CERCLA
Defendant paid for the containment of the dioxin-contaminated dirt. In Count IV of defendant's counterclaim it seeks contribution for plaintiff for the cost of the containment. In Count I of plaintiff's complaint it seeks a declaration that plaintiff is not liable for contribution of the containment costs of the dioxin-contaminated dirt.
Congress passed CERCLA, 42 U.S.C. § 9601 et seq., in 1980 to facilitate the cleanup of hazardous waste disposal sites. Exxon Corp. v. Hunt, 475 U.S. 355, 359-360, 106 S.Ct. 1103, 1107-1108, 89 L.Ed.2d 364 (1986). CERCLA was a response to the threat to public health posed by the widespread use and disposal of toxic materials. Its purpose was "to ensure the prompt and effective cleanup of waste disposal sites, and to assure that parties responsible for hazardous substances bore the cost of remedying the conditions they created." Mardan Corp. v. C.G.C. Music, Ltd., 804 F.2d 1454, 1455 (9th Cir.1986) (citing Cong. Record 31964 (statement of Rep. Florio)).
Under § 107 of CERCLA, 42 U.S.C. § 9607, the government held plaintiff and defendant jointly and severally liable for the containment costs of the dioxin contaminated dirt. Defendant expended $223,610.75 to contain the dioxin-contaminated dirt. Although defendant sought a contribution from plaintiff, plaintiff refused to pay any part of the containment costs. Under § 113 of CERCLA, 42 U.S.C. § 9613, Congress expressly recognized a right of contribution under the statute.[7] Superfund Amendment and Reauthorization Act of 1986 ("SARA"), Pub.L.No. 99-499, § 113, 100 Stat. 1613, 1647 (1986).
As amended and as relevant here, § 113 provides:
Contribution
Any person may seek contribution from any other person who is liable or potentially liable under section 9607(a) of this title, during or following any civil action under section 9606 of this title or under section 9607(a) of this title. Such claims shall be brought in accordance with this section and the Federal Rules of Civil Procedure, and shall be governed by Federal Law. In resolving contribution claims, the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate. Nothing in this subsection shall diminish the right of any person to bring an action for contribution in the absence of a civil action under section 9606 or section 9607 of this title.
42 U.S.C. § 9613(f)(1). Under Section 113 the Court must first find that plaintiff was a "responsible party" under § 107(a). Section 107(a) defines a responsible party as
(1) the owner and operator of a vessel or facility,
(2) any person who at the time of disposal of any hazardous substance owned or operated any facility at which such hazardous substances were disposed of,
(3) any person who by contract, agreement, or otherwise arranged for disposal or treatment, or arranged with a transporter for transport for disposal or treatment, of hazardous substances owned or possessed by such person, by any other party or entity, at any facility or incineration vessel owned or operated by another party or entity and containing such hazardous waste substances, and
(4) any person who accepts or accepted any hazardous substances for transport to disposal or treatment facilities, incineration *1234 vessels or sites selected by such person, from which there is a release, or a threatened release which causes the incurrence of response costs, of a hazardous substance....
42 U.S.C. § 9607(a). It is clear that plaintiff is a "responsible party" under § 107(a)(4). Plaintiff transported the dioxin-contaminated dirt from East North Street to the Schwarz property on Williams Road, a site selected by plaintiff. Finding that plaintiff is a "responsible party" and thus liable for contribution under § 107(a) does not mean that plaintiff is liable for contribution under CERCLA. Environmental Transp. Systems, Inc. v. Ensco, Inc., 763 F.Supp. 384, 388 (C.D.Ill.1991). Instead, such a finding means only that plaintiff is potentially liable for contribution under CERCLA. Once plaintiff is found to be a responsible party under § 107(a), the questions shifts to how much is that plaintiff responsible for under the provisions of § 113(f)(1). Id. Section 113(f)(1) does not limit the Court to any specific equitable factors in its determination of how much each party should contribute to the cost of the containment. Instead, § 113(f)(1) provides that "the court may allocate response costs among liable parties using such equitable factors as the court determines are appropriate." Factors which may be considered include the parties' degree of involvement in the generation, transportation, treatment, storage, or disposal of the hazardous substances. United States v. Monsanto Co., 858 F.2d 160, 168 n. 13 (4th Cir.1988). The Court may also consider the relative degree of fault. Id. Other factors that have been gleaned from the legislative history of CERCLA and considered by the courts are
1. the ability of the parties to distinguish their contribution to the discharge, release, or disposal of the hazardous substance,
2. the amount of hazardous substance involved,
3. the degree of the toxicity of the hazardous substance involved,
4. the degree of care exercised by the parties with respect to the hazardous substance concerned,
5. the degree of cooperation by the parties with government officials to prevent any harm to the public health or the environment.
United States v. A & F Materials Co., 578 F.Supp. 1249, 1256 (S.D.Ill.1984).
After weighing the equitable considerations that this Court deems relevant, the Court concludes that plaintiff is not liable for contribution for any of the containment costs. First, plaintiff did the job it was contracted to do in a safe, professional, and workmanlike manner. Defendant contracted with plaintiff under the continuing unit price agreement and Order No. 0610105 to excavate a trench, lay cable and pipe in the trench, backfill and cap the trench with asphalt, and haul away the excavated dirt. Defendant determined the location of the trench, and plaintiff excavated in accordance with the directions of plaintiff. Defendant told plaintiff to arrange for the disposal of the excavated dirt, and plaintiff hauled the dirt to Schwarz property after obtaining the permission of Mr. Schwarz's tenant.
Second, there was no reason for plaintiff to suspect that the dirt underneath East North Street was contaminated by dioxin. Plaintiff was not informed of the dioxin contamination by officials of the City of Eureka until the dioxin-contaminated dirt was excavated and transported to the Schwarz property. There were no signs on East North Street to indicate that the site was a confirmed dioxin site.
Third, plaintiff was responsible for checking with local utilities to ascertain the locations of buried pipes and cables along the excavation route. This responsibility was allocated to plaintiff in the course of dealings with defendant and by the continuing unit price agreements in paragraph 18. Plaintiff fulfilled this responsibility by visiting local utilities before excavation began in order to obtain up-to-date locations of pipes and cables. If plaintiff ruptured a pipe and cable during a dig, plaintiff paid to fix it. The responsibility for ascertaining whether an excavation site was dioxin-contaminated, however, was not allocated *1235 to plaintiff either through the course of dealing between plaintiff and defendant or by the continuing unit price agreements. Instead, as discussed infra, defendant received information from the MDNR on confirmed dioxin sites and could communicate this information to plaintiff on the maps provided by defendant of the excavation sites.
Fourth, defendant drafted and submitted the application for the excavation permit. The application drafted by Mr. Dye, an employee of defendant, failed to indicate that the trench extended from West North Street onto East North Street. If the permit designated East North Street as the site of excavation, it is likely that Mr. Branscum would have informed plaintiff or defendant of the dioxin contamination.[8]
Fifth, defendant was notified periodically by the EPA and the MDNR of confirmed dioxin sites in the St. Louis Metropolitan area. The East North Street site was designated a confirmed dioxin site by the EPA and MDNR in 1984, approximately two years prior to plaintiff's excavation on East North Street. Unlike defendant, plaintiff did not receive lists of confirmed dioxin sites from the EPA or MDNR. Furthermore, defendant was well aware of the dioxin-contamination at Times Beach through communications from the MDNR and the news media. Times Beach is approximately one mile from the North Street site in Eureka. Plaintiff did not do business in the State of Missouri prior to 1984 and would not have been as apprised as defendant of dioxin-contamination in the Eureka area.
Sixth, plaintiff did not exacerbate the problem after it learned of the dioxin contamination. Plaintiff immediately ceased its operations, and cooperated with the EPA in identifying and enclosing the dirt that came from East North Street.
In sum, plaintiff was hired to excavate a trench for defendant and performed the job in a professional and workmanlike manner. Plaintiff was not aware that the dirt was contaminated by dioxin. Plaintiff's failure to detect the dioxin contamination was through no fault of plaintiff. Under these circumstances the Court concludes that plaintiff is not liable for contribution of the containment costs.
Directed Verdicts
At the close of all the evidence the Court sustained a directed verdict in favor of defendant on Count II and Count III of plaintiff's second amended complaint, and in favor of plaintiff on Count I, Count II, and Count III of defendant's second amended counterclaim. The Court sets forth, infra, the reasons for the directed verdicts.
Count II of Plaintiff's Complaint Breach of Contract
Plaintiff alleges that defendant is liable for a breach of contract in the termination of the continuing unit price agreements. The continuing unit price agreements provided, in paragraph 4:
This agreement may be terminated by either party giving thirty days written notice to the other party. Jobs in progress at the time of termination will be continued under this agreement until completed by the Contractor and accepted by the Telephone Company.
On September 30, 1987 defendant notified plaintiff in writing that it was terminating, as of October 30, 1987, the continuing unit price agreements in effect between the two parties. For purposes of the directed verdict the Court will assume that the motive of defendant in terminating the continuing unit price agreements was retaliation against plaintiff for plaintiff's refusal to pay the containment costs of the dioxin-contaminated dirt.
The source of the defendant's alleged breach is a breach of the duty of good faith and fair dealing. Defendant has an implied duty of good faith and fair dealing in the performance and enforcement of *1236 a contract. Restatement (Second) of Contracts § 205. The implied duty of good faith and fair dealing extends to the cancellation of a contract. Machine Maintenance & Equipment Co. v. Cooper Industries, Inc., 634 F.Supp. 367, 372 (E.D.Mo. 1986) ("Machine Maintenance"); Morton v. Hearst Corp., 779 S.W.2d 268, 273 (Mo. App.1989); Martin v. Prier Brass Mfg. Co., 710 S.W.2d 466, 473 (Mo.App.1986). There is a split of authority on whether the defendant can be liable for breach of contract if it exercised its termination right to deprive plaintiff of expected benefits under the contract despite the fact that defendant canceled in a timely manner. In Grand Light & Supply Co. v. Honeywell, Inc., 771 F.2d 672 (2d Cir.1985) (interpreting Connecticut law) and Friedman & Son, Inc. v. Safeway Stores, Inc., 712 P.2d 1128 (Colo.App.1985), the courts held that a clear termination provision in a contract renders the motive behind the termination irrelevant. However, in Paradee Oil Co. v. Phillips Petroleum Company, 320 A.2d 769 (Del.1974), Gambar Enterprises, Inc. v. Kelly Services, Inc. 69 A.D.2d 297, 418 N.Y.S.2d 818 (1979) (interpreting Michigan law), and Hall v. Farmers Ins. Exchange, 713 P.2d 1027, 1030 (Okla.1985), the courts held that an evil motive behind a timely termination could support claim for a breach of the implied covenant of good faith and fair dealing.
The law of Missouri appears to recognize a cause of action for the bad faith termination of a contract. In Machine Maintenance, Judge Gunn recognized a cause of action for breach of the implied duty of fair dealing for the bad faith termination of a contract that specifically reserved the right of either party to terminate without cause. Judge Gunn stated:
The Court concludes that plaintiff's claim for breach of the duty of fair dealing cannot be based upon a "without cause" termination by defendant, a right specifically reserved by the contract. If in exercising this right, however, defendant acted in bad faith to interfere with plaintiff's rights under the contract, a cause of action for breach of the duty of fair dealing would arise.
Machine Maintenance, supra, 634 F.Supp. at 372 (citing De Treville v. Outboard Marine Corp., 439 F.2d 1099, 1100 (4th Cir. 1971) (interpreting South Carolina law)).
Although the law of Missouri, as interpreted by Judge Gunn, appears to recognize a cause of action for a bad faith termination of a contract, the Court concluded that there was no issue of fact for the jury. Plaintiff alleges that defendant's termination of the continuing unit price agreements, which precluded plaintiff from performing additional jobs on those agreements, constituted a violation of defendant's implied duty of good faith and fair dealing. A claim based on a breach of good faith and fair dealing presupposes that a contractual right existed between the parties. Plaintiff had no contractual right to additional jobs on the continuing unit price agreements that were terminated. The continuing unit price agreements clearly stated that defendant was under no obligation to give plaintiff work or accept plaintiff's bids:
The Telephone Company does not commit itself to order any specific quantity of work under this agreement and may have the same or similar work performed by its own employees or other contractors....
Defendant's refusal to consider plaintiff for additional jobs was not a violation of the implied duty of good faith and fair dealing because plaintiff had no contractual right to be considered for any jobs by defendant under the clear terms of the continuing unit price agreements.
Plaintiff argues that the continuing unit price agreements constituted a commitment by defendant to continue to accept bids from plaintiff. The Court disagrees. The scope of the continuing unit price agreements is limited to the prices and other terms for which plaintiff would work for defendant if defendant offered plaintiff a job in the area covered by the continuing unit price agreement.
Furthermore, plaintiff suffered no damages with regard to the jobs in progress at the time the continuing unit price agreements *1237 were terminated. Plaintiff had jobs in progress on seven of the continuing unit price agreements. Plaintiff was permitted to complete the work on the seven jobs and defendant compensated plaintiff in accordance with the terms of the continuing unit price agreements.
Count III of Plaintiff's Complaint Promissory Estoppel
A. Promissory Estoppel
Plaintiff alleges that defendant was estopped from refusing to do business with plaintiff by the promises defendant made to induce Mr. Danella to incorporate plaintiff in Missouri.
Section 90 of the Restatement (Second) of Contracts states:
A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.
From Section 90 courts have derived four essential elements of promissory estoppel: (1) a promise, (2) detrimental reliance on the promise, (3) injustice can only be avoided by enforcement of the promise, and (4) the promisor should have or did in fact clearly foresee the precise action which the promisee took in reliance. A.L. Huber & Son, Inc./Clevenger Homes, Inc. v. Jim Robertson Plumbing, Inc., 760 S.W.2d 496, 498 (Mo.App.1988). The first essential element of promissory estoppel is that the defendant has made a binding offer in the form of a promise. Burst v. Adolph Coors Co., 650 F.2d 930, 932 (8th Cir.1981). The promise must be sufficiently definite and delineated to support a claim of detrimental reliance. Bower v. AT & T Technologies, Inc., 852 F.2d 361, 366 (8th Cir.1988).
In the instant matter defendant invited plaintiff to come to Missouri and perform excavation and other construction work for defendant. Defendant informed plaintiff that there was a lot of work in Missouri for a good contractor, and that defendant would provide plaintiff with enough work to keep ten crews busy. After Mr. Danella accepted defendant's invitation to come to Missouri, defendant fulfilled its promise and provided plaintiff with jobs for 3½ years. Defendant made no assurances as to how long defendant would offer plaintiff work. Defendant did not promise that it would provide plaintiff with jobs for a certain number of years. Defendant did not promise that it would provide plaintiff with jobs until plaintiff had the opportunity to recoup its investment.
In essence, plaintiff requests the fact-finder to infer a promise from the circumstances of the matter. Would Mr. Danella accept an invitation to enter Missouri and expend 2½ million dollars in start-up costs unless defendant offered him enough jobs to recoup his investment? Although Mr. Danella's decision appears unwise in hindsight, and such a decision is certainly atypical for such a sophisticated and successful businessman as Mr. Danella, the testimony revealed that Mr. Danella invested 2½ million dollars without assurances from defendant as to the duration of their relationship.
In sum, Mr. Danella set up plaintiff on the promise of being offered work for an unspecified period of time. Plaintiff, therefore, cannot rely on promissory estoppel because defendant made no promises as to the duration of the relationship between plaintiff and defendant.
B. Recoupment of Investment
Mr. Danella spent 2½ million dollars in start-up costs for plaintiff. In order to recoup that investment plaintiff had to do business with defendant for approximately six years. Plaintiff had only done business with defendant for 3½ years when defendant terminated their relationship. Plaintiff alleges that defendant breached an implied duty to do business with plaintiff until plaintiff had an opportunity to recoup its investment.
Missouri law does not yet recognize a general opportunity to recoup an investment. Franchisees and distributors have been afforded an opportunity to recoup their investment. In Ridings v. Thoele, *1238 Inc., 739 S.W.2d 547 (Mo. banc 1987), the court stated:
Missouri common law is clear that the provisions of the contract govern the right, vel non, of a franchisor to terminate a franchise relationship with the important qualification that if the franchisee has in good faith incurred expense and devoted time in building his business he is entitled to a continuance of the relationship for a reasonable time to enable him to recover his investment.
739 S.W.2d at 549 (quoting Bain v. Champlin Petroleum Co., 692 F.2d 43 (8th Cir.1982)). In Cambee's Furniture, Inc. v. Doughboy Recreational, Inc., 825 F.2d 167 (8th Cir.1987) (interpreting South Dakota law), the court stated:
A distributor is entitled to a reasonable period to recoup its investment, during which the agreement may not be terminated without good cause. After the reasonable recoupment period has expired, the distributorship agreement becomes terminable at will upon reasonable notice.
825 F.2d at 173.
Because plaintiff is neither a franchisee nor a distributor, this theory of relief is not available to plaintiff. Furthermore, the Court will not extend to plaintiff the recoupment of investment protection enjoyed by franchisees and distributors. In the franchise and distributorship cases the investment of the plaintiff was lost when franchise/distributor contract was terminated. In the instant matter plaintiff was an excavation and construction company. Although plaintiff's operation was geared toward serving power companies, and plaintiff worked primarily for defendant, the skills of its plaintiff's employees and uses of its machinery enabled plaintiff to do excavation and construction work for other clients beside defendant. In fact, plaintiff had expanded its business in Missouri to serve ConTel and other clients.
In sum, the common law of Missouri does not provide for a general opportunity to recoup its investment. Although franchisees and distributors have been afforded this opportunity, the Court will not step foot onto new ground and provide this right to every businessman, particularly sophisticated ones like Mr. Danella, who do business without the security of a contract of a definite duration.
Count IV of Plaintiff's Complaint Prima Facie Tort
Plaintiff alleges that defendant's refusal to allow plaintiff to bid on additional work in retaliation for plaintiff's refusal to contribute to the cost of the containment constituted a prima facie tort. The elements of a prima facie tort are
(1) an intentional unlawful act by defendant;
(2) an intent to cause injury to plaintiff;[9]
(3) injury to plaintiff; and
(4) an absence of any justification or an insufficient justification for defendant's act.
Wilt v. Kansas City Area Transit Authority, 629 S.W.2d 669, 672 (Mo.App.1982) (quoting Restatement (Second) of Torts § 870). Missouri courts have consistently limited the application of the prima facie tort.[10]Catron v. Columbia Mutual Insurance Co., 723 S.W.2d 5, 6 (Mo.1987). The courts have expressed a concern that this cause of action would be used in every situation in which an injury or loss occurred and no other tort applied. Id.
In State ex rel. William Ranni Associates, Inc. v. Hartenbach, 742 S.W.2d 134 (Mo. banc 1987) ("Hartenbach"), the beneficiaries of a life insurance policy brought an action against the insurer's general agent because defendant delayed payment on the policy. Plaintiffs asserted that defendant committed a tort in causing a *1239 breach of an insurance contract. In rejecting plaintiffs' argument, the court stated:
To determine the character of an action, whether tort or contract, it is necessary to ascertain the source of the duty claimed to be violated. * * * Here the source of the duty is in contract. The failure to perform a contracted obligation in a timely manner would not be an independent tort in the absence of a contract. This case is not similar to Davidson [v. Hess, 673 S.W.2d 111 (Mo.App.1984) ], where the tenant was wrongfully evicted and the landlord's retention of the tenant's possessions amounts to an act of tortious conversion independent of the contract. Because the duty stems from the contract, the breach does not amount to a tort.
742 S.W.2d at 140. Although the Hartenbach court was not addressing plaintiffs' cause of action for a prima facie tort, the same reasoning applies here.[11] In the instant matter the source of plaintiff's cause of action is in contract. Defendant offered plaintiff work pursuant to the terms of the continuing unit price agreements, which set forth the contractual relationship between the parties. First, under the clear terms of the continuing unit price agreements defendant was not obligated to offer plaintiff any jobs. Second, the continuing unit price agreements provided for termination by either party with thirty days notice. By suing for a prima facie tort plaintiff seeks to obtain additional contractual rights that plaintiff is not entitled to under the terms of the continuing unit price agreements. By granting a directed verdict in favor of defendant, the Court denied plaintiff the attempt to disguise its contract claims in the cloak of a prima facie tort.
Count I of Defendant's Counterclaim Breach of Contract
Defendant alleges that plaintiff is liable for a breach of the following provisions of the continuing unit price agreement: Paragraph 20: "The Contractor is responsible for the safe performance of all work done under this contract."
Paragraph 7: "The Contractor shall comply with all federal, state, county, and municipal laws, ordinances, and regulations applicable to the performance of the work...."
Paragraph 18: "The Contractor shall take every measure to protect all persons and property ... from injury arising out of the performance of the work."
Defendant alleges that plaintiff, by excavating dioxin-contaminated dirt and transporting it to the Schwarz property, failed to perform the work in a careful and lawful manner as required by Paragraphs 22, 7, and 18 of the continuing unit price agreement. Therefore, plaintiff is liable for the cost of the containment of the dioxin-contaminated dirt.
It is not every breach of a contract that provides a party with a cause of action against plaintiff. Instead, only material breaches of the contract are actionable for damages. Health Related Services, Inc. v. Golden Plains Convalescent Center, Inc., 806 S.W.2d 102, 105 (Mo.App.1991). Defendant's cause of action for breach of contract mistakes the nature of the contract between plaintiff and defendant. Under the continuing unit price agreement and Order No. 0610105 defendant contracted with plaintiff to excavate a trench, lay cable and pipe, backfill and cap the trench with asphalt, and dispose of the excavated dirt. Plaintiff performed these tasks in a timely, professional, careful, and workmanlike manner. The contract does not allocate to plaintiff the responsibility of determining whether the site of the excavation contained dioxin-contaminated dirt. The fact that plaintiff unknowingly excavated and transported dioxin-contaminated dirt is outside the scope of the contract between plaintiff and defendant. Defendant may not sue plaintiff for a breach of the boilerplate provisions of the continuing unit price agreements when plaintiff performed in a professional and workmanlike manner the *1240 tasks that defendant contracted with plaintiff to perform.
Count II of Defendant's Counterclaim Indemnification
Defendant alleges that plaintiff must indemnify plaintiff for the cost of containing the dioxin-contaminated dirt under paragraphs 24 and 18 of the continuing unit price agreement. Paragraph 24 provides:
INDEMNIFICATION: The Contractor hereby agrees to indemnify and hold harmless the Telephone Company, its agents and employees from all claims, damages or judgments which may arise out of the Contractor's failure to perform the work in a safe and careful manner, notwithstanding the presence of or purported instructions or directions of the telephone company's inspectors, employee or agents or the requirements or provisions of any maps, plans, specifications or other documents applicable to the work furnished by the Telephone Company.
Paragraph 18 provides:
DUTY OF SAFE PERFORMANCE: The Contractor shall take every measure to protect all person and property, including property of the Telephone Company, from injury arising out of the performance of the work. The Contractor shall make such inspections, safety checks, and tests, and shall provide such equipment, personnel, and supervision as is necessary to insure the safe performance of the work. Where a possibility of injury to persons or damage to property is ascertained, the Contractor shall take such remedial action, including the stoppage of work when necessary, as will prevent such injury or damage if such possibility of injury or damage has been caused or claimed to have been caused by the Telephone Company or its employees, the Contractor shall give the Telephone Company prompt notice thereof confirmed in writing and shall not resume work until the Telephone Company gives written permission to do so.
First, the Court must address whether an indemnification clause is enforceable in a CERCLA suit. Section 107(e)(1) of CERCLA provides:
No indemnification, hold harmless, or similar agreement or conveyance shall be effective to transfer from the owner or operator of any facility or from any person who may be liable for a release or threat of release under this section, to any other person the liability imposed under this section. Nothing in this subsection shall bar any agreement to insure, hold harmless, or indemnify a party to such agreement for any liability under this section.
42 U.S.C. § 9607(e)(1). The first section of this obscure provision appears to prohibit indemnification agreements under all circumstances, while the second section appears to permit indemnification agreements under all circumstances. The Eighth Circuit Court of Appeals has not yet interpreted the meaning of § 107(e)(1). The majority of federal courts that have considered the issue have held that the second sentence of § 107(e)(1) completely negates the first, thereby permitting parties to bargain over indemnification for CERCLA liability under all circumstances. See Versatile Metals, Inc. v. Union Corp., 693 F.Supp. 1563, 1573 (E.D.Pa.1988); Chemical Waste Management, Inc. v. Armstrong World Industries, Inc., 669 F.Supp. 1285, 1293 (E.D.Pa.1987); FMC Corp. v. Northern Pump Co., 668 F.Supp. 1285, 1289 (D.Minn. 1987), appeal dismissed, 871 F.2d 1091 (8th Cir.1988).
The Ninth Circuit and a minority of other courts have taken another approach. Under the Ninth Circuit rule, "all responsible parties will be fully liable to the government regardless of the indemnification contracts they have entered into." Mardan Corp. v. C.G.C. Music, Ltd, supra, 804 F.2d at 1459. At the same time, private parties are free to contract among themselves with respect to indemnification and contribution. Id. In AM International, Inc. v. International Forging Equipment, 743 F.Supp. 525 (N.D.Ohio 1990), the court introduced a third rule: the first sentence of section 107(e)(1) "forbids giving effect to *1241 releases between tortfeasors in CERCLA contribution suits" while the second sentence of § 107(e)(1) "only give[s] effect to contracts binding parties otherwise not liable, to indemnify or insure liable parties." Id. at 530.
Of the three rules, this Court prefers that of the Ninth Circuit. Under the Ninth Circuit rule, the parties are jointly and severally liable with respect to the government in order to insure that the taxpayers are not forced to bear the cost of containing hazardous waste. Private parties, however, are free to contractually distribute the risks of liability among themselves as they see fit. Under the Ninth Circuit rule, this Court must look to the law of the State of Missouri to interpret the effect of the indemnification provisions in the continuing unit price agreement.[12]
Plaintiff argues that the indemnity clauses of the continuing unit price agreement are insufficient to shift liability under CERCLA because they do not clearly state that plaintiff must indemnify defendant for CERCLA liability. Chemical Waste Management, Inc. v. Armstrong World Industries, Inc., supra, 669 F.Supp. at 1294 ("If [parties] wish to redistribute the risks distributed by Congress, they must do so clearly and unequivocally"). Although the Court does not agree that such specificity (i.e., actually mentioning CERCLA in the indemnity provision) is required under Missouri law, there must be some suggestion that the parties intended liability under CERCLA to be within the scope of the indemnity provision. In numerous cases surveyed by the Court the contract between the parties that included the indemnification provision concerned the transportation or handling of known hazardous substances. If the parties know the hazardous nature of the substance, it is fair to assume that the parties were cognizant of possible liability under CERCLA and the parties intended the indemnification clause to shift liability for response costs under CERCLA. In the instant matter neither party was aware that the dirt underneath East North Street was contaminated by dioxin. Because the continuing unit price agreements concerned only the excavation and transportation of regular dirt, the indemnification clause is limited in scope to liability that might arise from the excavation and transportation of regular dirt. In Missouri, indemnity clauses are narrowly construed. United States v. Conservation Chemical Co., 653 F.Supp. 152, 235 (W.D.Mo.1986). A narrow construction of the indemnification provisions in the continuing unit price agreement does not allow for indemnification of containment costs for dioxin-contaminated dirt.
Furthermore, Missouri law provides that an indemnity agreement will not be construed to hold an indemnitee harmless from loss due to the indemnitee's own negligence unless the agreement reflects that it is the intention of the parties, and the intention is expressed in clear, unambiguous, and unequivocal terms. Broad, indefinite or general terms are not sufficient to impose contractual indemnification. Continental Grain Co. v. North Kansas City Electric Co., 658 F.Supp. 767, 769 (W.D.Mo.1987); Bonenberger v. Associated Dry Goods Co., 738 S.W.2d 598, 600 (Mo. App.1987). An example of the specificity required to create such an agreement of indemnification against negligence is found in Missouri Pacific Railroad Co. v. Rental Storage & Transit Company, 524 S.W.2d 898, 908 (Mo.App.1975), where the contract provided for indemnification "notwithstanding any possible negligence."
As was discussed supra, the excavation of the dioxin-contaminated dirt was caused by the negligence, however slight, of defendant. Plaintiff, which was hired to excavate a trench at a site determined by *1242 defendant and carried out that task in a professional and workmanlike manner, was not negligent. The indemnity provisions at paragraph 18 and 24 of the continuing unit price agreements do not in clear, unambiguous, and unequivocal terms make plaintiff liable for the negligence of defendant. Therefore, the indemnification clauses are insufficient to shift the liability for the containment costs.
Count III of Defendant's Counterclaim Negligence
The market value of the Schwarz property decreased as a result of the dioxin-contaminated soil being placed on the property by plaintiff. In September, 1987 Mr. Schwarz assigned his claim for damages to his property to defendant, which purchased the property of Mr. Schwarz and then deeded it to the City of Eureka. Defendant alleges that plaintiff is liable for damages to Mr. Schwarz's property because of plaintiff's negligence in excavating the dioxin-contaminated dirt and placing it on Mr. Schwarz's property.
Three elements must exist for a case of actionable negligence: (1) a duty owed by plaintiff to protect defendant/Mr. Schwarz from the injury of which defendant complains; (2) failure of the plaintiff to perform that duty, and (3) injury proximately caused by plaintiff's failure. Lavo v. Medlin, 705 S.W.2d 562, 564 (Mo.App.1986); Harris v. Kansas City, 759 S.W.2d 236, 237 (Mo.App.1988). The first element which plaintiff must prove is the existence of a duty on the part of the plaintiff to protect defendant from the injury sustained. Byers v. Spaulding, 725 S.W.2d 893, 895 (Mo.App.1987). "The duty to exercise care may be a duty imposed by common law under the circumstances of a given case." Hoover's Dairy, Inc. v. Mid-America Dairymen Inc./Special Products, Inc., 700 S.W.2d 426, 431 (Mo. banc 1985) (quoting Zuber v. Clarkson Construction Co., 363 Mo. 352, 251 S.W.2d 52, 55 (1952)).
As was discussed supra, plaintiff was not negligent in failing to ascertain that the dirt under East North Street was contaminated with dioxin. First, plaintiff did not have a contractual or common law duty to ascertain whether the dirt it excavated was contaminated with dioxin. The continuing unit price agreement did not allocate to plaintiff the responsibility of checking for dioxin contamination at the excavation site. Furthermore, it was not the custom and practice between plaintiff and defendant for plaintiff to check for dioxin contamination at the excavation site. The continuing unit price agreement and the custom and practice between plaintiff and defendant allocated to plaintiff the responsibility of obtaining up-to-date locations of buried utility cables and pipes. There is no suggestion, however, that this duty extended from hazards buried in the dirt to hazardous substances within the dirt. Second, plaintiff was not informed by defendant, the City of Eureka, the MDNR or the EPA of the presence of a confirmed dioxin site on East North Street.
Plaintiff had a duty to excavate a trench according to the instructions of defendant and dispose of the excavated dirt. Plaintiff fulfilled that duty when it dug where it was instructed to dig, and disposed of the excavated dirt in a place and manner acceptable to defendant. Under these circumstances plaintiff is not liable under a theory of negligence for the depreciation of the value of the Schwarz property.
JUDGMENT
In accordance with the memorandum filed herein this day,
IT IS HEREBY ORDERED that judgment is entered in favor of plaintiff and against defendant on the merits of Count I of plaintiff's second amended complaint. Plaintiff is not liable to defendant under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9613, for contribution of the costs incurred by defendant in containing the dioxin-contaminated dirt.
IT IS FURTHER ORDERED that judgment is entered in favor of plaintiff and against defendant on the merits of Count *1243 IV of defendant's second amended counterclaim.
NOTES
[1] The Center for Disease Control has indicated that dioxin concentration of 1 ppb in surface soil of residential areas poses an unacceptable risk to human health.
[2] Employees of defendant were only present at the North Street site for approximately five hours during the entire project.
[3] In paragraph 18 the continuing unit price agreement allocated to plaintiff the responsibility of locating buried pipes and cables:
[T]he Contractor shall take particular care to avoid coming in contact with or causing damage to any water, sewer, steam, gas, fuel, or pipe lines, mains or service pipes, electrical, communications and other energy transmission, conduits, cables, wires or service connection, other private, utility or governmental facilities and any hazardous condition or thing, whether located upon, below, or above the ground surface, and the Contractor shall take proper measures to determine the presence of noxious, combustibles or explosive gases and to prevent all manner of ignition in and around manholes, excavations, and openings.
[4] Prior to the discovery of dioxin contamination Mr. Goughenour visited the site on a few occasions and inspected the work while in progress.
[5] The Schwarz property was deeded directly from Mr. Schwarz to the City of Eureka.
[6] The exhibits indicate that defendant received a list designating East North Street as a confirmed dioxin site on September 2, 1986, which was after plaintiff excavated the dioxin-contaminated dirt.
[7] Contribution is a statutory or common law right available to those who have paid more than their equitable share of a common liability. See Prosser and Keeton on the Law of Torts § 50 (W. Keeton 5th ed. 1984); Restatement (Second) of Torts § 886A (1979).
[8] The map attached to the permit by defendant shows that the excavation extended from West North Street to East North Street. It is possible that Mr. Branscum granted the permit without reviewing the attached documentation.
[9] Injury is defined in the Restatement (Second) of Torts § 870 as "the invasion of any legally protected interest of another." Porter v. Crawford & Co., 611 S.W.2d 265, 271 (Mo.App.1980).
[10] In Brown v. Missouri P.R. Co., 720 S.W.2d 357, 361 (Mo. banc 1986), cert. den., 481 U.S. 1049, 107 S.Ct. 2180, 95 L.Ed.2d 836 (1987), the Court noted that "no case resulting in a verdict for the plaintiff on a prima facie tort theory has been affirmed by the Missouri appellate courts."
[11] The court later dismissed plaintiffs' cause of action for a prima facie tort because "[the agent] owed no duty to plaintiffs." Hartenbach, supra, 742 S.W.2d at 141.
[12] The Ninth Circuit has held that state law should provide the general content of federal law with respect to interpreting a contract that allegedly releases a party from contract liability under CERCLA. Mardan Corp., supra, 804 F.2d at 1458-1459. In the instant matter the law of Missouri on indemnification would apply because the contract containing the indemnity provisions was executed in Missouri and the work performed under the contract was performed in Missouri. Nika Corp. v. Kansas City, 582 F.Supp. 343, 350 (W.D.Mo.1983) (citing Havenfield Corp. v. H & R Block, Inc., 509 F.2d 1263, 1267 (8th Cir.1975)). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/501731/ | 839 F.2d 225
3 Indiv.Empl.Rts.Cas. 22
Vickie L. PITTMAN, Plaintiff-Appellant,v.WILSON COUNTY; Garry C. Mercer, individually and in hisofficial capacity as County Manager; Danny Hickman,individually and in his official capacity as Director of theEmergency Communications Center; Mack Bissett; JeanEdmundson; Frank Emory; Raeford Flowers; Preston Harrell;Norwood J. Whitley, Jr.; W.D.P. Sharpe, III, individuallyand in their official capacities as Wilson CountyCommissioners, Defendants-Appellees.
No. 87-1639.
United States Court of Appeals,Fourth Circuit.
Argued Jan. 6, 1988.Decided Feb. 22, 1988.
M. Travis Payne (Edelstein & Payne, Raleigh, N.C., on brief), for plaintiff-appellant.
James Redfern Morgan, Jr. (Charles F. Vance, Jr., Womble, Carlyle, Sandridge & Rice, Winston-Salem, N.C., George A. Weaver, Lee, Reece & Weaver, Wilson, N.C., on brief), for defendants-appellees.
Before POWELL, Associate Justice (Retired), United States Supreme Court, sitting by designation, and RUSSELL and ERVIN, Circuit Judges.
POWELL, Associate Justice:
1
The issue presented is whether appellant had a property right in her employment with Wilson County, North Carolina. We agree with the district court that no such property right existed, and affirm.
2
* In June 1983, after being employed as a dispatcher with the Wilson County Sheriff's office for approximately two and one half years, appellant Vickie Pittman began employment as a telecommunicator at the Wilson County Emergency Communications Center. On the morning of January 10, 1986, due to concerns about appellant's work performance, the director of the Emergency Communications Center, Danny Hickman, met with appellant and asked her to answer eight questions concerning alleged misconduct on her part. In responding to these questions, Pittman admitted that she had taken a typewriter ribbon from a co-worker's typewriter in order to read what was being written about her.1 A conference was held later that day, attended by Pittman and Hickman, as well as Henry Dixon and Lee Hester, both of whom supervised Pittman. Hickman reiterated the recent incidents of appellant's alleged misconduct and explained to her that if she did not resign her employment with the County she would be dismissed. Appellant requested some additional time to think about her decision, but she was told that a decision was needed before she left the room. After a few more minutes, she agreed to resign and signed a letter to that effect. Several days later appellant claimed that her resignation had been coerced and she demanded a discharge hearing. Her request was refused.
3
On April 30, 1986, appellant filed a complaint under 42 U.S.C. Sec. 1983 and the Fourteenth Amendment against Wilson County, the county manager, and various other Wilson County employees. The complaint alleges that:
4
Defendants' termination of Ms. Pittman and the termination of her pay without affording her a pretermination hearing in front of an impartial official, and Defendants' continued refusal to provide her with a full hearing at which she can cross-examine witnesses against her and present evidence and witnesses of her own, violates her rights to Due Process guaranteed to her by the Fourteenth Amendment.
5
(App. at 11-12). She seeks "preliminary and permanent declaratory and injunctive relief" directing the appellees to provide her with a formal hearing before an impartial panel. She also seeks an award of back pay and the costs of this action. The parties filed cross-motions for summary judgment. The district court, disagreeing with the report and recommendation of a magistrate, granted summary judgment in favor of appellees. It found that appellant was not discharged from her position. Moreover, it found that even if her resignation were viewed as a discharge, appellant had no property interest in her employment position under North Carolina law, and therefore her dismissal was not a denial of due process. We agree that even if appellant was discharged by the County, her dismissal did not violate her due process rights because, under long settled North Carolina law, she was merely an "at-will" employee without any contractual or statutory guarantees of continued employment.
II
6
* The procedural safeguards encompassed by the due process clause extend to appellant's continued employment only if she had a property interest in that employment. See Board of Regents v. Roth, 408 U.S. 564, 569, 92 S.Ct. 2701, 2705, 33 L.Ed.2d 564 (1972).2 The Supreme Court has stated that in order to possess a property interest in one's employment:
7
... a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.
8
Id. at 577, 92 S.Ct. at 2709. The Court also has held that although a property interest in employment can be created by statute, ordinance, or express or implied contract, "the sufficiency of the claim of entitlement must be decided by reference to state law." Bishop v. Wood, 426 U.S. 341, 344, 96 S.Ct. 2074, 2077, 48 L.Ed.2d 684 (1976). Under North Carolina law, subject to a few well-defined exceptions, "absent some form of contractual agreement between an employer and employee establishing a definite period of employment, the employment is presumed to be an 'at-will' employment, terminable at the will of either party, irrespective of the quality of performance by the other party...." Harris v. Duke Power Company, 319 N.C. 627, 629, 356 S.E.2d 357 (1987) (emphasis in original). See also Presnell v. Pell, 298 N.C. 715, 723-24, 260 S.E.2d 611 (1979) ("Nothing else appearing, an employment contract in North Carolina is terminable at the will of either party"); Nantz v. Employment Security Commission, 290 N.C. 473, 477, 226 S.E.2d 340 (1976) ("Mere longevity of employment, even though the employee's service be of excellent quality, does not confer upon the employee [a] property right"); Still v. Lance, 279 N.C. 254, 182 S.E.2d 403 (1971) (a property right in employment can exist only if the employer, by statute or contract, has actually granted some form of guarantee).3 Moreover, absent a contractual guarantee, an exception to the "employee-at-will" rule specifically is recognized under North Carolina law when a statute or ordinance provides for restrictions on the discharge of an employee. Presnell v. Pell, 298 N.C. at 723, 260 S.E.2d 611. See also Harris v. Duke Power Company, 319 N.C. at 629,4 356 S.E.2d 357.
B
9
Appellant did not have an express contract with the County providing her either with employment for a definite duration or with a representation that she would not be discharged except for cause. Nor does appellant allege that she gave any additional consideration in exchange for employment security that may have created an implied contract of continued employment.5 Appellant, however, asserts that the "Personnel Resolution" appearing in the County's employee handbook (App. at 369-88) contains restrictions with respect to the circumstances under which an employee can be discharged. She argues that because these restrictions are contained in a county resolution, they provide the kind of statutory authority necessary to create a property interest under North Carolina law.6
10
Despite the fact that appellant refers to the Personnel Resolution as both an "ordinance or resolution," (see, e.g., Appellant's Brief at 27), an ordinance and a resolution are two significantly distinct government actions. As noted in a treatise on municipal corporations:
11
A 'resolution' is not an 'ordinance,' and there is a distinction between the two terms as they are commonly used in charters. A resolution ordinarily denotes something less solemn or formal than, or not rising to the dignity of, an ordinance. The term 'ordinance' means something more than a mere verbal motion or resolution, adopted, subsequently reduced to writing, and entered on and made a part of the record of the acting body. It must be invested, not necessarily literally, but substantially, with the formalities, solemnities, and characteristics of an ordinance, as distinguished from a simple motion or resolution.
12
5 E. McQuillin, Municipal Corporations Sec. 15.02, at 37 (3d ed. 1981). Generally, measures that prescribe binding rules of conduct are identified as ordinances while measures that relate to administrative or housekeeping matters are categorized as resolutions.7 2 C. Sands, M. Libonati, Local Government Law Sec. 11.14, at 11-29 (1981).
13
North Carolina statutes do not expressly address the distinction between an ordinance and a resolution. They do, however, mandate specific procedures for the passage of a county ordinance. In order for the County's governing body, the Board of Commissioners, to adopt an ordinance or "any action having the effect of an ordinance," the proposed ordinance "must receive the approval of all the members of the board of commissioners." N.C.Gen.Stat. Sec. 153A-45. Moreover, state law requires the county clerk to "maintain an ordinance book, separate from the minute book of the board of commissioners," N.C.Gen.Stat. Sec. 153A-48, and the ordinance book must "be available for public inspection in the office of the clerk." Id. Furthermore, the existence of a distinction between ordinances and resolutions under North Carolina law is evidenced by the fact that the State's statutes provide that resolutions may be used for such things as fixing the time and place of the Board of Commissioners' regular meetings (N.C.Gen.Stat. Sec. 153A-40), initiating an alteration in the structure of the board (N.C.Gen.Stat. Sec. 153A-60), and permitting the county manager to appoint officers, employees, and agents without first securing Board approval (N.C.Gen.Stat. Sec. 153A-82(1)). These are all administrative matters and are in stark contrast to the express requirements in the Statute that an ordinance is required in order for a county to effect such things, for example, as the restriction of firearms (N.C.Gen.Stat. Sec. 153A-129), the prohibition of begging (N.C.Gen.Stat. Sec. 153A-126), and the regulation and licensing of trades, occupations, and professions (N.C.Gen.Stat. Sec. 153A-134). Moreover, the North Carolina statutes provide for the enforcement of county ordinances by fines and penalties. An ordinance may provide for the maximum fine, term of imprisonment, or infraction penalty to be imposed for its violation. N.C.Gen.Stat. Sec. 153A-123.
14
Not only are the "rules and regulations" for the dismissal of employees of Wilson County merely contained in a provision entitled "Personnel Resolution," but the dismissal provision itself speaks in terms of "assisting" the county manager and department heads by establishing a "policy" to apply to employees of the County. (App. at 373). Moreover, the resolution is a part of a manual that describes itself as merely a "WELCOME TO ALL EMPLOYEES OF WILSON COUNTY." (App. at 367). The language simply is not typical of that used in an ordinance or statute having the effect of law. Moreover, the subject matter of the personnel resolution is administrative in nature. It supplies internal guidelines to County officials for the administration of the County's employment positions, including the disciplining and discharge of employees. Although we assume that North Carolina would not find the label affixed to a measure to be dispositive, see 2 C. Sands and M. Libonati, Local Government Law, Sec. 11.14, at note 10 and accompanying text, absent evidence that this resolution was passed with the formality required for the enactment of an ordinance, we must conclude that it was not. See 5 E. McQuillin, Municipal Corporations, at 39. See also Little v. City of North Miami, 805 F.2d 962, 967 (11th Cir.1986).
C
15
In addressing appellant's reliance on the terms of a resolution incorporated in an employee handbook, the district court found that her claim was merely based upon a unilaterally promulgated handbook that set out the personnel policies of Wilson County. This led the court to conclude that: "... Ms. Pittman does not base her alleged property right on a statute or an ordinance or any other independent source which carries the force of law." (App. at 484). It held that the handbook resolution is not an independent source that carries the force of law:
16
Even if this court were to treat Ms. Pittman's resignation as a discharge, she would have no constitutionally protected property right to her employment. In the cases relied on by Ms. Pittman to establish her property right, the entitlement is always based on a state statute, a local ordinance or an implied contract; in other words, property rights in cases of this kind always arise from an independent source which has the force of law.
17
(App. at 484). The district court properly recognized that, except where a contractual right or recognized public policy exception exists, North Carolina requires that a statute or ordinance provide an exception to "at-will" employment. We agree with the district court8 that, absent evidence that a resolution was enacted with the requisite formality and intent under North Carolina law, it is not sufficiently analogous to a statute or ordinance to create a property interest.9
III
18
Since appellant was merely an "at-will" employee, she did not have a property interest in her position of employment with Wilson County. Therefore, she was not entitled to the protections of due process with respect to the termination of her employment.10 0] The County was free to discharge her irrespective of the quality of her performance and without affording her a hearing of any kind. Still v. Lance, 279 N.C. 254, 182 S.E.2d 403 (1971). The decision of the district court entering summary judgment in favor of appellees is--
19
AFFIRMED.
1
The parties dispute whether appellant made other incriminating admissions. Moreover, appellant had been notified previously, perhaps as many as 23 times, that her work was unsatisfactory in some particular. Facts relating to the performance of her position, however, are immaterial to the dispositive issue of whether or not appellant had a property right in her job
2
Appellant does not allege that the circumstances surrounding the termination of her employment with Wilson County deprived her of a liberty interest without due process of law. Therefore, we are only concerned with whether she had a property interest in her employment
3
Although no evidence was presented by appellant to support a contractual right to her employment with the County, she appears to argue that such an implied right existed. The analysis of the effect on the State's "at-will" rule appears to be the same whether a plaintiff's claim is based on contract or upon statute or ordinance. Ordinarily little evidence is required where the asserted property right is based on a statute, ordinance, or express contract, but an employee who relies on an implied contract has a heavy burden of proof
4
See Guy v. Travenol Laboratories, Inc., 812 F.2d 911 (4th Cir.1987) for an exhaustive discussion of the current status of the "at-will" employment doctrine and its exceptions under North Carolina law
5
The North Carolina Supreme Court has not decided whether, when an employee manual unilaterally provides that employees can only be discharged for cause and an employee relies on that statement in accepting or continuing his or her employment with the employer, the policy statement becomes, in effect, a "contract" creating a property right. See Harris v. Duke Power Co., 319 N.C. at 630-31, 356 S.E.2d 357. We need not address this issue as nothing in the record before us suggests that appellant relied on the personnel resolution in accepting or continuing her employment with the County
6
Appellant also argues that the County's alleged history of discharging employees only for cause establishes a reasonable expectation of continued employment and thereby creates a property interest in that employment. Appellant's Brief at 25. This argument fails for two reasons. First, we can find no support for this proposition in North Carolina law. Secondly, there is insufficient evidence in the record to establish that the County's practice in discharging its employees created a "mutually explicit" understanding that employees would be discharged only for cause and with a hearing. Cf. Perry v. Sindermann, 408 U.S. 593, 601, 92 S.Ct. 2694, 2699-2700, 33 L.Ed.2d 570 (1972). The party opposing a properly supported motion for summary judgment may not rest upon mere allegations of his pleading, but must set forth specific facts showing that there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 2514, 91 L.Ed.2d 202 (1986)
7
Like a statute, an ordinance is a law binding on all concerned. Therefore, certain important procedures generally are prescribed for its adoption. These normally require a prescribed record vote, a public hearing, and published notice. It is not suggested by appellant that any such procedures were required or followed in the adoption, by appellee, of the employee handbook
8
As this is an issue involving knowledge of state law and its interpretation, the conclusions of the district court are significant. As the Supreme Court observed in Bishop v. Wood, the district judge sits in North Carolina and practiced law there for many years. 426 U.S. at 345-46, 96 S.Ct. at 2077-78
9
Appellant's reliance on Bunting v. City of Columbia, 639 F.2d 1090, 1095 (4th Cir.1981), to support her argument that even if she does not have a property interest she is entitled to the procedural safeguards contained in the resolution, is misplaced. In Bunting, employees were guaranteed an administrative hearing under the South Carolina County and Municipal Employees Grievance Procedure Act. In this case, appellant relies only on procedures contained in a resolution
10
It is unnecessary for us to decide whether appellant resigned or was discharged from her employment with the County because, in light of our finding that appellant had no property interest in her employment, the resolution of this issue is immaterial | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1555425/ | 775 F.Supp. 247 (1991)
Dana J. HENRY, Plaintiff,
v.
James E. RYAN, et al., Defendants.
No. 90 C 7475.
United States District Court, N.D. Illinois, E.D.
September 30, 1991.
*248 Frederic R. Klein, Aphrodite Kokolis, Schiff, Hardin & Waite, Harvey Grossman, *249 Alan K. Chen, The Roger Baldwin Foundation of ACLU, Inc., Chicago, Ill., for plaintiff.
Candice J. Fabri, James A. Rolfes, Sachnoff & Weaver, Ltd., Chicago, Ill., for amici curiae in opposition to motion to dismiss, Ill. Attys. for Crim. Justice, Nat. Legal Aid and Defender Ass'n.
Charles Lynn Lowder, Bullaro, Carton & Stone, Chicago, Ill., for defendants Goldena McGee, John O'Berhelman and Correctional Medical Systems of Ill., Inc.
James G. Sotos, Schirott & Associates, P.C., Itasca, Ill., for defendants County of DuPage, Richard P. Doria, Sr., Kenneth Wiess, Stephen Nolan, Gary Lavery, Wayne Howlett, Louis Sedares, George Wick, James E. Ryan, Joseph Birkett and Robert Kilander.
Michael McFatridge by Dale M. Wood, Ill. State's Attys. Ass'n, State's Attys. Appellate Prosecutor, Springfield, Ill., for amicus curiae supporting motion to dismiss, Ill. State's Attys. Ass'n.
ORDER
BUA, District Judge.
On December 4, 1988, plaintiff Dana Henry received a call from DuPage County Deputy Sheriff George Wick.[1] Deputy Sheriff Wick requested that Henry come to his office and answer questions in connection with an investigation into the death of Kristina Wesselman. Wick told Henry that Henry was not a suspect in the investigation. Henry agreed to go and answer questions. Seven days later, Henry received another call from Deputy Sheriff Wick. This time Wick requested that Henry come to his office and provide blood and saliva samples. Henry refused.
Undeterred by Henry's answer, Deputy Sheriff Wick served Henry with a subpoena which directed Henry to provide blood and saliva samples. The subpoena was obtained by George Wick; Robert Kilander, First Assistant States's Attorney of DuPage County; and Joseph Birkett, Assistant State's Attorney of DuPage County. Henry did appear before the DuPage County Grand Jury, but he again refused to provide the samples.
On January 23, 1989, the State's Attorney filed in the Circuit Court of DuPage County a Petition for Rule to Show Cause why Henry should not be held in contempt. The public defender appointed to represent Henry responded by filing a motion to quash the subpoena. On February 6, 1989, the circuit court denied Henry's motion to quash and ordered that he comply with the subpoena. When Henry continued in his refusal to comply, the state court held him in contempt and ordered that he be jailed until he provided the samples. After the circuit court refused to stay enforcement of its order, Henry was taken to the DuPage County Jail.
Upon Henry's arrival at the Jail, he was interviewed by a DuPage County Deputy Sheriff. He was then seen by Goldena McGee, an employee of Correctional Medical Systems of Illinois, Inc. ("CMS"), a private company that provides medical services and health care evaluations to inmates detained at DuPage County Jail. McGee ordered that Henry be placed on suicide watch. Her orders were ratified by John O'Berhelman, a physician and an employee of CMS. Based on these orders, Deputy Sheriffs Kenneth Wiess, Stephen Nolan and Gary Lavery told Henry to strip. They took away his clothes and placed him in an observation cell.
Eight hours after being put in the observation cell, Henry decided to provide the blood and saliva samples. Deputy Sheriffs Wayne Howlett and Louis Sedares took Henry to Glendale Heights Community Hospital where the samples were extracted. Even though Henry provided the samples, he was still detained, naked, in the observation cell until approximately 8:30 p.m. on February 6, 1989. He was then released.
*250 Henry has never been arrested, charged or indicted in connection with the Wesselman murder. In fact, Henry has never again been contacted by the DuPage County State's Attorney or Sheriff's Offices in connection with the investigation.
On the basis of these experiences, Henry has brought a 42 U.S.C. § 1983 suit against the County of DuPage; the State's Attorney of DuPage County, James Ryan; the DuPage County Sheriff, Richard Doria; those officials named in the preceding statement of facts; CMS; and two CMS employees. A number of defendants have filed motions to dismiss Henry's complaint. Each will be considered below.
I. Motion to Dismiss Goldena McGee, John O'Berhelman, CMS
The crux of the motion submitted by Goldena McGee, John O'Berhelman and CMS is that they are entitled to qualified immunity from Henry's request for damages.[2] There is no doubt that CMS and its employees are governmental actors for purposes of a 42 U.S.C. § 1983 suit. In West v. Atkins, 487 U.S. 42, 108 S.Ct. 2250, 101 L.Ed.2d 40 (1988), the Court held that a physician who provided medical services to prison inmates pursuant to a state contract acted under color of state law. Here, CMS entered into a contract with the DuPage County Jail to provide medical services and health care evaluations to those in custody. The company and its employees agreed to assume the government's obligation of providing adequate medical care. Thus, CMS and its employees can be considered state actors.
A determination that CMS and its employees are state actors, though, does not automatically render them eligible for qualified immunity. The Supreme Court has yet to decide whether the shield of qualified immunity should be extended to private persons named in a § 1983 suit. In Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 942 n. 23, 102 S.Ct. 2744, 2756 n. 23, 73 L.Ed.2d 482 (1982), the Court intimated that it might consider providing private individuals with an affirmative defense, possibly qualified immunity, but the Court has never actually extended that protection. Nor has the issue been decided by the Seventh Circuit.[3]
Those appellate courts that have extended qualified immunity to private persons have done so based on the fact that the individuals were acting pursuant to a valid state law or a governmental contract. Where parties have acted pursuant to a presumptively valid garnishment or attachment statute, courts have been loath to penalize the parties for following what they assumed to be valid law. Folsom Inv. Co., Inc. v. Moore, 681 F.2d 1032, 1037 (5th Cir.1982); Buller v. Buechler, 706 F.2d 844, 852 (8th Cir.1983). That same reasoning has been applied to private parties acting under a governmental contract. In DeVargas v. Mason & Hangar-Silas Mason Co., Inc., a company providing services to a laboratory that operated under government contract refused to hire an individual because the company thought that government regulations prohibited the hiring. The Tenth Circuit found that the company was entitled to qualified immunity. However, the court limited its holding to circumstances where private party defendants acted in "accordance with the duties imposed by a contract with a governmental body, perform[ed] a governmental function, and [were] sued solely on the basis of those acts performed pursuant to contract." DeVargas, 844 F.2d 714, 722 (10th Cir.1988), cert denied, ___ U.S. ___, 111 S.Ct. 799, 112 L.Ed.2d 860 (1991). The court explicitly *251 reserved judgment "on the propriety of granting qualified immunity when a private contractor performing a governmental function, such as operating a prison, performs acts not required by contract, and is sued for those acts." Id. at 722 n. 11.
At this stage in the proceedings, it is not possible to determine whether the limited circumstances supporting an extension of immunity are present in this case. Although the company and its employees seem to have been performing a function ordinarily within the government's province, it is not clear whether the actions taken by CMS and its employees were pursuant to a policy dictated by contractual terms and/or applicable state law. Therefore, the court declines to rule on this issue until it obtains facts describing the nature of the services provided by CMS and its employees as well as the nature of CMS's relationship with DuPage County.
II. Motion to Dismiss County of DuPage
Among the defendants that Henry seeks to hold accountable for the "policies" inflicted upon him is the County of DuPage. If Henry only sought to sue the County of DuPage on the basis of actions taken by the DuPage County Sheriff's Office and/or the DuPage County State's Attorney's Office, the legal viability of his claims against the County of DuPage would be suspect.[4] However, Henry also alleges that the County of DuPage itself followed an established policy, practice or custom which led to the compelled production of body fluid samples without probable cause, (Second Amended Complaint at 13), as well as a policy or practice that failed "to provide for the appropriate care of persons deemed to be at risk for suicide." (Second Amended Complaint at 9.) He contends that the County of DuPage and various officials were acting together in following these "policies." On the basis of these allegations, the court will allow Henry to pursue his claims against the County of DuPage. Ross v. United States, 910 F.2d 1422, 1430 n. 5 (7th Cir.1990). See Pembaur v. City of Cincinnati, 475 U.S. 469, 479-480, 106 S.Ct. 1292, 1298, 89 L.Ed.2d 452 (1986) ("municipal liability is limited to action for which the municipality is actually responsible"). The remainder of the County's arguments will be addressed below.
III. Motion to Dismiss Sheriff Doria, Deputy Sheriff Wick, State's Attorney Ryan, Assistant State's Attorneys Kilander and Birkett
A. Collateral Estoppel
These defendants (along with the County of DuPage) move to dismiss the claims against them on procedural as well as substantive grounds. Their procedural argument relies on the doctrine of collateral estoppel. They argue that the Circuit Court of DuPage County considered and rejected Henry's position that "the Constitution prohibits governmental prosecutors from utilizing grand jury subpoenas to compel blood and saliva samples from non-arrestees without probable cause and exigent circumstances" during the hearing on his motion to quash. (Memorandum of Law in Support of Motion to Dismiss filed by State's Attorney Defendants and Defendants Wick and Doria at 5.) They contend that the prior decision should be given preclusive effect.
A federal court is bound to give a state court judgment the same preclusive effect as the judgment would be given in *252 the courts of the state where it was rendered. Jones v. City of Alton, 757 F.2d 878, 883 (7th Cir.1985). In Illinois, collateral estoppel is "limited to the precise factual or legal issues actually litigated and decided when a prior order was entered." People v. Williams, 138 Ill.2d 377, 150 Ill.Dec. 498, 505, 563 N.E.2d 385, 392 (1990). A court must determine that "the issue decided in the prior adjudication is identical with the one presented in the case under review, [that] the party against whom estoppel is asserted was a party or in privity with a party to the prior litigation, [that] there has been a final judgment on the merits in the former suit, and [that] the party against whom collateral estoppel is asserted had a full and fair opportunity to litigate the issue in the prior suit." Stevenson v. City of Chicago, 638 F.Supp. 136, 142 (N.D.Ill.1986).
In Henry's case, it is questionable whether he had a full and fair opportunity to litigate the Fourth Amendment issue in the prior suit. Even though Henry was represented by an attorney for the motion to quash, the motion was not decided on the basis of a full-blown hearing. Neither side presented exhibits, witnesses or the like in support of their positions.
Moreover, Henry was unable to avail himself of the opportunity to appeal once a decision on the motion had been rendered. "[T]he availability of a forum for review [is] an important consideration in determining whether to give preclusive effect to a ruling...." Stevenson, 638 F.Supp. at 139. Henry did file an appeal with the Second District Appellate Court. However, his appeal was dismissed after he complied with the subpoena because the issues involved had become moot. As a result, there was never an appellate decision on the merits.
In similar situations where a defendant's opportunity for appellate review has been foreclosed, Illinois courts have excepted the litigant from general collateral estoppel rules and allowed the matter to be relitigated. In People v. Mordican, 64 Ill.2d 257, 1 Ill.Dec. 71, 356 N.E.2d 71 (1976), for instance, the Illinois Supreme Court allowed a defendant to relitigate a motion to suppress because his trial had ended in an acquittal, thus foreclosing his opportunity for appeal. In People v. Stiles, 95 Ill. App.3d 959, 51 Ill.Dec. 646, 650, 420 N.E.2d 1204, 1208 (1981), this exception was extended to a defendant whose opportunity to appeal a suppression ruling was precluded because he pled guilty. In reaching its decision, the court dismissed the government's argument that relitigation should be barred because the appeal was foreclosed by "an action within the defendant's control:"
[T]he basis of the exception allowing relitigation of the motion has nothing to do with the nature of a defendant's plea ... Whether it is because the defendant cannot appeal the first denial of his motion because he is acquitted in that action (Mordican) or if because, as here, a guilty plea precludes appeal, the result is the same: the ruling is insulated from review. It is that result which ... Mordican seeks to avoid by permitting relitigation should the motion be made in a second, distinct suit.
Id. 51 Ill.Dec. at 650, 420 N.E.2d at 1208.
The reasoning of Stiles is equally applicable to this case. Even though it was Henry's compliance with the court order that foreclosed his opportunity to appeal, the fact remains that the ruling was insulated from review. The state appellate court never addressed the issue on its merits; it merely dismissed the issue as being moot. Under these circumstances, the court cannot find that Henry had a full and fair opportunity to litigate the Fourth Amendment issue. An application of the collateral estoppel doctrine would work an injustice in this case. Therefore, the court rejects defendants' procedural objection and moves to their substantive argument.
B. Fourth Amendment
Defendants' substantive argument challenges whether the grand jury subpoena which compelled production of blood and saliva samples in this case did, in fact, infringe on Fourth Amendment rights. There is no doubt that the Fourth Amendment *253 is applicable to the grand jury process. Hale v. Henkel, 201 U.S. 43, 76, 26 S.Ct. 370, 379, 50 L.Ed. 652 (1906), rev'd on other grounds, 378 U.S. 52, 84 S.Ct. 1594, 12 L.Ed.2d 678 (1964). Indeed, in cases such as Henry's where physical evidence is sought from a person, the possibility of a Fourth Amendment violation exists at "two different levels the `seizure' of the `person' necessary to bring him into contact with government agents and the subsequent search for and seizure of the evidence." United States v. Dionisio, 410 U.S. 1, 8, 93 S.Ct. 764, 769, 35 L.Ed.2d 67 (1973).
The initial question, then, is whether Henry's compelled appearance before the grand jury constituted an unreasonable seizure under the Fourth Amendment. It is now settled law that a compelled appearance before the grand jury does not constitute an unreasonable seizure under the Fourth Amendment. Dionisio, 410 U.S. at 13, 93 S.Ct. at 771; United States v. Mara, 410 U.S. 19, 21, 93 S.Ct. 774, 775, 35 L.Ed.2d 99 (1973).
The inquiry, therefore, must turn to the compelled production of blood and saliva samples. Does a grand jury subpoena compelling physical evidence infringe on Fourth Amendment rights? Of the courts that have delved into the question, most have held that such a request was not intrusive in their case because the type of evidence being compelled was already in the public realm. In Dionisio, 410 U.S. 1, 93 S.Ct. 764, for instance, the Court found that the grand jury's request did not intrude on defendant's privacy since the physical characteristics of his voice were "constantly exposed to the public." Id. at 14-15, 93 S.Ct. at 771-72. Similarly, in Mara, 410 U.S. 19, 93 S.Ct. 774, the Court held that a grand jury subpoena compelling a sample of a defendant's handwriting was not violative of Fourth Amendment rights. The Court noted that handwriting, too, is often exposed to the public. "[T]here is no more expectation of privacy in the physical characteristics of a person's script than there is in the tone of his voice." Id. at 21, 93 S.Ct. at 776. See also Davis v. Mississippi, 394 U.S. 721, 89 S.Ct. 1394, 22 L.Ed.2d 676 (1969) (fingerprinting procedure might comply with the Fourth Amendment); In re Grand Jury Proceedings (Mills), 686 F.2d 135, 139 (3d Cir.1982) ("no greater expectation of privacy with respect to hair which is on public display than with respect to voice, handwriting or finger-prints"), cert. denied, 459 U.S. 1020, 103 S.Ct. 386, 74 L.Ed.2d 517 (1982).
However, blood (and presumably saliva) samples are a different story. In Schmerber v. State of California, 384 U.S. 757, 767, 86 S.Ct. 1826, 1834, 16 L.Ed.2d 908 (1966), the Court held that a blood test constituted a search under the Fourth Amendment. See Skinner v. Railway Labor Executives Ass'n, 489 U.S. 602, 109 S.Ct. 1402, 1412, 103 L.Ed.2d 639 (1989). In fact, in Dionisio, 410 U.S. at 14-15, 93 S.Ct. at 771-72, the Court distinguished the provision of a voice sample from that of blood sample. "The required disclosure of a person's voice is ... immeasurably further removed from the Fourth Amendment protection than [is] the intrusion into the body effected by [a] blood extraction...." Id. While no court has explicitly found that a saliva sample is a Fourth Amendment search, extracting a saliva sample seems to involve the same sort of intrusion that goes beyond the physical characteristics exposed to the public and into the security of the person. Cupp v. Murphy, 412 U.S. 291, 295, 93 S.Ct. 2000, 2003, 36 L.Ed.2d 900 (1973). For instance, in Henry's case a pad was stuck in his mouth to take the saliva sample. Therefore, the court agrees with both parties that the extraction of blood and saliva samples can be considered a search under the Fourth Amendment.
Although the compelled samples may be considered a search under the Fourth Amendment, a search only violates the Fourth Amendment if it is found to be unreasonable. Because the court is dealing with "intrusions into the human body rather than with state interferences with property relationships or private papers, [the court] write[s] on a clean slate." *254 Schmerber, 384 U.S. at 767-768, 86 S.Ct. at 1834.[5]
"The reasonableness of ... intrusions beneath the skin depends on a case-by-case approach, in which the individual's interests in privacy and security are weighed against society's interests in conducting the procedure." Winston v. Lee, 470 U.S. 753, 760, 105 S.Ct. 1611, 1616, 84 L.Ed.2d 662 (1985). A threshold requirement, though, is the presence of probable cause. In Schmerber, 384 U.S. at 768, 86 S.Ct. at 1834, the Court clearly stated that probable cause must be present in order to justify an intrusion into the body: "The interests in human dignity and privacy which the Fourth Amendment protects forbid any ... intrusion on the mere chance that desired evidence might be obtained." Id. at 770, 86 S.Ct. at 1835. There must be a "clear indication" that evidence will be found in order to justify an intrusion. Id. The importance of probable cause was reiterated in Winston. There, the Court found that probable cause was present before it proceeded to weigh the individual's interests against society's interests. Id. at 760-763, 105 S.Ct. at 1616-18.
On the basis of these cases, it would appear that probable cause is a necessary element of a grand jury subpoena compelling a bodily intrusion. A probable cause requirement, however, seems untenable in the grand jury situation. The purpose of a grand jury is to determine whether there is probable cause to charge an individual with a crime. Burdening a grand jury with a probable cause requirement seems inconsistent with that purpose. For that reason, many courts, most recently the Supreme Court, have rejected the idea of requiring a showing of probable cause in connection with a grand jury subpoena. See United States v. R. Enterprises, Inc., ___ U.S. ___, 111 S.Ct. 722, 726, 112 L.Ed.2d 795 (1991) ("the Government cannot be required to justify the issuance of grand jury subpoena by presenting evidence sufficient to establish probable cause").
Nevertheless, a grand jury does not enjoy unbridled investigatory powers. "Grand juries are not licensed to engage in arbitrary fishing expeditions, nor may they select targets of an investigation out of malice or an intent to harass." R. Enterprises, Inc., 111 S.Ct. at 727. The evidence collected by a grand jury must still be relevant and particularized. This need was recognized in one of the few cases to deal with a blood sample and a grand jury subpoena. In U.S. v. (Under Seal), the Fourth Circuit upheld the district court's enforcement of a blood sample subpoena not only because the sample was a minimal physical intrusion, but because the sample would provide highly relevant and probative evidence. U.S. v. (Under Seal), 819 F.2d 1139 (1987), cert. denied, 484 U.S. 955, 108 S.Ct. 350, 98 L.Ed.2d 375 (1987).
The rub is how to ensure that evidence is highly relevant and probative. For the reasons discussed above, a showing of probable cause must be ruled out in the grand jury context. In other contexts where a showing of probable cause has not proved possible, the Court has turned to a showing of individualized suspicion. "When the balance of interests precludes insistence on a showing of probable cause, we have usually required `some quantum of individualized suspicion' before concluding that a search is reasonable." Skinner, 109 S.Ct. at 1417 (quoting United States v. Martinez-Fuerte, 428 U.S. 543, 560, 96 S.Ct. 3074, 3084, 49 L.Ed.2d 1116 (1976)). The court finds that such a showing is appropriate here to ensure that the physical evidence collected by the grand jury is sufficiently probative. Accordingly, the court holds that a grand jury subpoena for physical evidence must be based on individualized suspicion.[6]
*255 In this case, Henry was allegedly told at the time the blood and saliva samples were requested that he was not a suspect. Since it is possible that individualized suspicion was not present here, the court declines to dismiss Henry's complaint on the substantive grounds raised by defendants.
C. Immunity
Defendants argue that even if Henry's Fourth Amendment claim is viable, they are entitled to immunity for their actions. Defendants Doria and Wick of the DuPage County Sheriff's Office claim qualified immunity. Prosecutors in the DuPage County State's Attorney's Office (Ryan, Kilander, and Birkett) claim the more encompassing protection of absolute immunity. The prosecutors' claim to absolute immunity need not be addressed in this case. Since the court finds that defendants' actions in compelling the blood and saliva samples are protected by qualified immunity, the court may assume that qualified immunity applies to the prosecutors without even considering the applicability of absolute immunity. Gray v. Bell, 712 F.2d 490, 505 (D.C.Cir.1983), cert. denied, 465 U.S. 1100, 104 S.Ct. 1593, 80 L.Ed.2d 125 (1984).
Government officials enjoy immunity from civil damages if "their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known." Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). "[I]n the light of pre-existing law the unlawfulness must be apparent." Anderson v. Creighton, 483 U.S. 635, 640, 107 S.Ct. 3034, 3039, 97 L.Ed.2d 523 (1987). Although Schmerber, 384 U.S. 757, 86 S.Ct. 1826, and Winston, 470 U.S. 753, 105 S.Ct. 1611, had been decided at the time of defendants' actions, the unlawfulness of their actions could not have been apparent. Schmerber and Winston were concerned with probable cause in the context of search warrants or exceptions to the search warrant requirement. This case, on the other hand, raises the issue of probable cause in the context of grand jury subpoenas. Few cases have actually dealt with grand jury subpoenas compelling production of physical evidence. In those cases that have, like Dionisio, 410 U.S. 1, 93 S.Ct. 764, and Mara, 410 U.S. 19, 93 S.Ct. 774, the issue of a probable cause showing was never reached because the Court found that the compelled evidence was not protected by the Fourth Amendment. Fewer cases have involved the blood (and saliva) samples requested here. Henry cites one, In re May 1991, Will County Grand Jury, 216 Ill.App.3d 1033, 159 Ill. Dec. 853, 576 N.E.2d 522 (1991), which was decided after the actions taken by defendants. The other case which Henry primarily relies on, In re September Grand Jury, 104 Ill.App.3d 94, 59 Ill.Dec. 839, 432 N.E.2d 625 (1982), did not even involve a grand jury subpoena.
"Closely analogous cases, those decided before the defendants acted, ... are required to find that a constitutional right is clearly established." Powers v. Lightner, 820 F.2d 818, 821 (7th Cir.1987) quoted in Rakovich v. Wade, 850 F.2d 1180, 1209 (7th Cir.1988), cert. denied, 488 U.S. 968, 109 S.Ct. 497, 102 L.Ed.2d 534 (1988). Closely analogous cases were not available to guide defendants in this case. Therefore, the court finds that the officers are entitled to qualified immunity from plaintiff's Fourth Amendment claim. This immunity only extends to Henry's claim for monetary relief. His claims for injunctive relief remain intact. Supreme Court of Virginia v. Consumers Union of the United States, *256 446 U.S. 719, 736, 100 S.Ct. 1967, 1977, 64 L.Ed.2d 641 (1980).
CONCLUSION
Defendants have moved to dismiss Henry's claims on a variety of grounds. For the reasons outlined above, the court has rejected the majority of defendants' arguments. However, the court does find that the officials sued in Henry's Fourth Amendment claim are entitled to immunity from monetary damages. Accordingly, the court dismisses Henry's Fourth Amendment claim for damages against the officials in the DuPage County Sheriff's Office and the DuPage County State's Attorney's Office. The remainder of Henry's claims stand.
IT IS SO ORDERED.
NOTES
[1] Since defendants have moved to dismiss, the court takes as true plaintiff's well-pleaded allegations.
[2] As set forth in the motion to dismiss filed by CMS and its employees, a defense of qualified immunity may only bar damages, not injunctive relief.
[3] Although the issue was recently raised in a motion brought in this district, the qualified immunity issue was not decided. In Fielder v. County of DuPage, No. 90-2323, 1991 WL 111282, 1991 U.S.Dist. LEXIS 8126 (N.D.Ill. June 7, 1991), a pretrial detainee brought a § 1983 suit against, among others, psychiatrists employed by a private medical services company who had placed the detainee on suicide alert and given her anti-psychotic and depressant drugs. The district court skirted the qualified immunity issue by finding that sufficient allegations would have been pled, in any event, to overcome a qualified immunity challenge.
[4] In Thompson v. Duke, the Seventh Circuit found that Cook County could not be held responsible for the actions of employees of Cook County Jail. Its ruling was based on a finding that the "Cook County Jail and the Cook County Department of Corrections are solely under the supervision and control of the Sheriff of Cook County.... The Sheriff is an independently-elected constitutional officer who answers only to the electorate, not to the Cook County Board of Commissioners." Thompson, 882 F.2d 1180, 1187 (7th Cir.1989), cert. denied, ___ U.S. ___, 110 S.Ct. 2167, 109 L.Ed.2d 496 (1990). See also Brassfield v. County of Cook, 701 F.Supp. 679, 680 (N.D.Ill.1988) (same). But see Buckley v. Fitzsimmons, No. 88-1939, 1989 WL 64321 (N.D.Ill. June 9, 1989) (Sheriff of DuPage County is a final policymaker for DuPage County); Holda v. Kane County, 88 Ill.App.3d 522, 43 Ill.Dec. 552, 559, 410 N.E.2d 552, 559 (1980) ("sheriff is the chief law enforcement officer of the county"); People ex rel. v. Nellis 249 Ill. 12, 94 N.E. 165, 169 (1911) ("A sheriff is the principle executive officer of the county....")
[5] The court thus rejects defendants' suggestion that it apply the same standards as those used to evaluate the compelled production of documents.
[6] Recently, the Court has eliminated the individualized suspicion requirement in certain civil cases, primarily those involving employee drug-testing. See e.g., Skinner, 489 U.S. 602, 109 S.Ct. 1402 (1989). This is not a case of employee drug-testing. But, even if the balancing test used in Skinner and similar cases were applied in this case, the test would require a showing of particularized suspicion. This case is unlike Skinner "where the privacy interests implicated by the search [were] minimal, and where an important governmental interest furthered by the intrusion would be placed in jeopardy by a requirement of particularized suspicion...." Id. 109 S.Ct. at 1417. Henry is an individual who was subpoenaed before a grand jury. In no way did Henry have the diminished expectations of privacy discussed in the Skinner decision. On the other side of the balance, the court has no basis for finding that the government's interest in the proper functioning of the grand jury would be jeopardized by a requirement of individualized suspicion. When the interests are weighed in this case, individualized suspicion wins. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555426/ | 775 F.Supp. 536 (1991)
TRANS SPORT, INC., Plaintiff,
v.
STARTER SPORTSWEAR, INC., Defendant.
No. 88-CV-1292.
United States District Court, N.D. New York.
September 3, 1991.
*537 Coughlin & Gerhardt, Binghamton, N.Y. (Peter H. Bouman, Robert C. Murphy, Richard W. Mertens, of counsel), for plaintiff.
Harter, Secrest & Emery, Rochester, N.Y. (Kenneth A. Payment, Carol L. O'Keefe, of counsel), for defendant.
MEMORANDUM-DECISION AND ORDER
McAVOY, District Judge.
Background
Various professional sports organizations Major League Baseball, the National Hockey League, the National Basketball Association and the National Football League, insofar as relevant here possess the exclusive right to license the commercial use of their member teams' names, symbols, emblems, designs and colors on merchandise. The unauthorized use of these names, symbols, etc. subjects the user to money damages and injunctive relief.
Hundreds of manufacturers are licensed to produce merchandise of all sorts bearing the teams' trademarks, i.e., their names, symbols, etc.. See Vols. II and III to Defendant's Motion for Summary Judgment, Exhibits 14-22. Defendant Starter Sportswear, Inc., however, is, and has been for some time, the sole manufacturer of authentic official team jackets pursuant to licensing agreements between it and the above-mentioned professional sports organizations. As a result of these agreements, defendant has the exclusive right to manufacture and sell these authentic official team jackets on a nationwide basis. It is alleged that by virtue of these licensing agreements defendant has acquired a national monopoly in the manufacture and sale of the foregoing authentic official *538 team jackets (hereinafter referred to as Starter team jackets).
In January 1986, plaintiff's predecessor-in-interest, the Stickley Corporation, entered into the business of selling Starter team jackets on a retail basis. After approximately six months in the retail business, Stickley decided that conditions existed which indicated that entering into the business of distributing Starter team jackets to other retailers on a nationwide basis would be financially lucrative. It therefore began purchasing large volumes of Starter team jackets for distribution to these retailers; the business apparently proved to be quite successful.
Subsequently, in March 1987, Starter's national sales manager advised Stickley that Starter would have to re-evaluate its relationship with Stickley if Stickley did not limit its resale of Starter team jackets to: (a) sales through a consumer catalog; (b) sales from Stickley's retail store; and (c) premiums on company-run stores. Thereafter, Starter refused to ship Stickley's Fall 1987 order of jackets unless Stickley agreed not to transship Starter products. Stickley refused claiming that such an agreement, in its view, violated the law. Starter then inserted the following conditions in its new order forms:
No transshipments: Starter has a policy of selling only directly to selected retail outlets for resale by them at specified locations. Proposed sale at any new retail outlet requires advance written approval from Starter's Home Office. Resale or transshipments of our merchandise to an unauthorized location or to another business contravenes that policy and the items and conditions of sale and may result in non-shipment or termination of the retailer's business relationship with Starter.
Complaint at 5, ¶ 21. Starter has refused to deal with Stickley and plaintiff Trans Sport Inc. by not honoring orders from February 16, 1987 to the present day.
Annoyed at these turn of events, plaintiff, claiming the loss of substantial profits, commenced the present action, seeking treble damages and permanent injunctive relief, alleging that "Starter has intentionally used the monopoly power it has at the manufacturing level to eliminate Stickley as a competitor at the distributor-wholesaler level in violation of Section 2 of the Sherman Act." Additionally, plaintiff alleges (a) that "Starter's actions are intentionally taken to maintain artificially high prices at the consumer level in that they restrict supply, require retailers to place minimum orders, minimum reorders and to carry items of Starter merchandise which they cannot readily sell," (b) that Starter has knowingly maintained "monopoly power at the distributor-wholesaler level by anticompetitive conduct directed at [plaintiff]," and (c) that because of Stickley's refusal to deal plaintiff "has been unable ... to obtain and supply the goods necessary to service the retail market for NHL, NBA, MLB, and NFL licensed team jackets." Complaint at 6, ¶¶ 25-27.
Defendant moved to dismiss the complaint pursuant to Rule 12(b)(6) arguing (a) that the complaint fails to define and plead facts delineating the relevant product or geographic market, (b) that the complaint fails to allege anti-competitive conduct, (c) that plaintiff lacks standing to claim damages or injunctive relief in its own right, and (d) that plaintiff has failed to allege antitrust injury.
Upon review of the complaint in light of pertinent case law, and after hearing oral argument and considering defendant's reply memorandum, this court in March 1989 denied defendant's motion. In short, the court noted that, under its understanding of the law, plaintiff's allegations (essentially that defendant as a monopolist manufacturer and distributor has impermissibly refused to deal with it so as to allow it to compete with defendant at the distribution level) stated a cognizable claim under section 2 of the Sherman Act, which plaintiff has standing to pursue. Memorandum-Decision and Order (filed March 21, 1989). The court determined that plaintiff had adequately pleaded the relevant product market, see id. at 5-7, anticompetitive conduct, id. at 8-9, standing to sue, id. at 10-11, and anti-trust injury, id. at 11-12.
*539 Some two years later, after the completion of discovery defendant has moved for summary judgment dismissing the action arguing first that defendant does not have monopoly power in the relevant product market which it defines to be broader than authentic official satin NFL, NHL, NBA and MLB team jackets. In this regard, defendant contends that "the facts demonstrate [that] plaintiff's bald allegations concerning the unavailability of comparable, substitute products are false, and the case-law clearly indicates that the relevant product market encompasses many products in addition to Starter's satin team jackets." Defendant's Memorandum of Law at 42. Second, defendant argues essentially that, even if it possesses monopoly power, and here it concedes that it possesses a natural monopoly over the distribution of the jackets it manufactures, the maintenance of its distribution system, whereby it retains the power to choose its retailers so as to be able to market its products as it sees fit, has not yielded unreasonable anti-competitive effects.
The court's great discomfort with this case, and particularly with plaintiff's position, in effect that a retailer should be able to tell the manufacturer/distributor how to run its business so that the retailer can enjoy greater profits, prompted the court to require additional briefing through an order which read as follows:
In order to prevail on a monopolization claim under section 2 of the Sherman Act, a plaintiff must prove that the defendant has wilfully acquired or maintained monopoly power in the relevant market. See Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 596 n. 19, 105 S.Ct. 2847, 2854 n. 19 [86 L.Ed.2d 467] (1985); Volvo North America Corporation v. Men's International Professional Tennis Council, 857 F.2d 55, 73 (2d Cir.1988); Belfiore v. New York Times Co., 826 F.2d 177, 180 (2d Cir.1987), cert. denied, [484 U.S. 1067] 108 S.Ct. 1030 [98 L.Ed.2d 994] (1988). Assuming for argument's sake that defendant possesses monopoly power in the relevant product market as defined by plaintiff, given that licensing agreements secured by defendant from various professional sports organizations are the source of defendant's exclusive right to manufacture authentic official team jackets, can defendant be deemed to have acquired or maintained that monopoly power wilfully rather through growth or development as a consequence of business acumen?, and if so, how? Moving on, assuming for argument's sake that defendant possesses monopoly power at the product distribution level, does, or under what circumstances would, such a monopolist have a duty to supply its product to a retailer so that the retailer may compete as a distributor. Viewed slightly differently, does, or under what circumstances would, the (assumed) monopolist's refusal to supply the retailer with its product so that the retailer does not transship to retailers not of the manufacturer's choosing, constitute wilful maintenance of monopoly power? In other words, as to the last question, what does wilful maintenance mean and what must be proved?
The briefing requested has been submitted. Suffice it to say that at this juncture the court has substantial doubts about the correctness of its decision denying defendant's motion to dismiss under Rule 12(b)(6). Nevertheless, the case has proceeded forward through discovery, and, notwithstanding the extensive briefing undertaken by the parties, the court is of the view that the case lends itself to straightforward resolution.
The issue posed by this case, and by defendant's motion, is whether defendant, a vertically-integrated firm, should be held liable under section 2 of the Sherman Act for refusing to deal with one of its retailers unless that retailer stops supplying retailers not of defendant's choosing and not under defendant's control with defendant's product. In the court's view, bolstered by the absence of any reported decisions presenting this issue, and by the results in cases somewhat similar to the present one, liability cannot be imposed and defendant's motion for summary judgment must be granted. Even if defendant possesses monopoly *540 power in the product market as defined by plaintiff, defendant did not use this power to gain a monopoly or a competitive advantage at the distribution level, and, more to the point, accepting that defendant possesses monopoly power at the distribution level, it has not willfully maintained its natural monopoly at the distribution level plaintiff cannot prove that defendant engaged in unreasonable anticompetitive conduct, that is, that defendant's conduct has yielded unreasonable anticompetitive effects. Simply stated, preventing plaintiff from continuing in the wholesale distribution market does not constitute the unreasonable exercise of defendant's distribution monopoly power under federal antitrust law.
Discussion
Briefly stated, in order to prevail on a typical monopolization claim under section 2 of the Sherman Act, a plaintiff must prove that the defendant (a) possesses monopoly power in the relevant market and (b) has acquired or maintained that power willfully rather than through growth or development as a consequence of, for example, business acumen. Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 596 n. 19, 105 S.Ct. 2847, 2854 n. 19, 86 L.Ed.2d 467 (1985); United States v. Grinnell, 384 U.S. 563, 570-571, 86 S.Ct. 1698, 1704, 16 L.Ed.2d 778 (1966); Volvo North America Corporation v. Men's International Professional Tennis Council, 857 F.2d 55, 73 (2d Cir.1988); Belfiore v. New York Times Co., 826 F.2d 177, 180 (2d Cir.1987), cert. denied, 484 U.S. 1067, 108 S.Ct. 1030, 98 L.Ed.2d 994 (1988); Paschall v. Kansas City Star Co., 727 F.2d 692, 695-696 (8th Cir.) (in banc), cert. denied, 469 U.S. 872, 105 S.Ct. 222, 83 L.Ed.2d 152 (1984); Theatre Party Associates, Inc. v. Schubert Organization, Inc., 695 F.Supp. 150, 153 (S.D.N.Y.1988). The instant case might appear to present a variant monopolization claim i.e., "leveraging," the essence of which is the use of monopoly power at one stage of production or in one market to gain a monopoly or a competitive advantage at another stage of production or in another, related market. See Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 275-276 (2d Cir.1979), cert. denied, 444 U.S. 1093, 100 S.Ct. 1061, 62 L.Ed.2d 783 (1980); Poster Exchange, Inc. v. National Screen Service Corp., 431 F.2d 334, 339 (5th Cir.1970), cert. denied, 401 U.S. 912, 91 S.Ct. 880, 27 L.Ed.2d 811 (1971); Belfiore v. New York Times Co., 654 F.Supp. 842, 847 (D.Conn.1986) (citing R. Posner and F. Easterbrook, Antitrust, 869-76 (1981), aff'd, 826 F.2d 177 (2d Cir. 1987)). The problem here, however, is that the court is not presented with a situation in which an asserted monopolist is seeking to use its monopoly power to expand into (or even to place restraints on) an already existing distribution system and thereby unreasonably thwart competition. See, e.g., Belfiore, 826 F.2d at 181; Paschall, 727 F.2d 692; Byars v. Bluff City News Co., 609 F.2d 843, 853-863 (6th Cir.1979); Berkey Photo, 603 F.2d at 275-276. What the court is presented with is a situation in which a manufacturer (who has secured the exclusive right to manufacture authentic official team jackets through various licensing agreements with the professional sports organizations, which licensing agreements are of limited duration and which may not be renewed if the sports organizations are not satisfied), desires to maintain its natural monopoly over the distribution of its own product by refusing to supply one of its retailers unless that retailer agrees not to transship to other retailers with whom the manufacturer has decided not to conduct business, i.e., an unauthorized retailer and one over whom the manufacturer has no control. In other words, the situation presented is not an attempt to vertically integrate forward, i.e., into an existing distribution system, but rather one in which the manufacturer desires to maintain its existing natural distribution monopoly. Plaintiff has not cited one case that is similar to the situation presented here. (Graphic Products Distributors, Inc. v. Itek Corp., 717 F.2d 1560 (11th Cir.1983) is not to the contrary; that case involved a challenge, under section 1 of the Sherman Act, to non-price vertical restraints imposed by the manufacturer on existing distributors.)
*541 In support of its motion for summary judgment, defendant argues, as to the issue of its possession of monopoly power, that it simply does not possess monopoly power in the relevant product market, which it contends is broader than that defined by plaintiff: to wit, official and authentic satin team jackets. In other words, defendant disputes, as a matter of law and as a matter of fact, plaintiff's contention that "the relevant product market is limited to Starter's satin team jackets, because they are the only `official and authentic NFL, NHL, NBA and MLB jackets in existence.'" Defendant contends that as a matter of law the relevant product market cannot be so narrowly defined and that as a matter of fact plaintiff cannot prove the alleged product market. Defendant's bottom line is that there is a "universe of officially licensed jackets and outerwear available [and that] plaintiff's limited market definition cannot stand. Starter's authentic satin jackets must compete in the marketplace, and they are even now losing ground."
Also defendant stresses that its "monopoly" at the product distribution level is a consequence of the manner in which has chosen to do business it manufactures its product and it distributes that product to retailers with whom it has agreed to do business. Its "direct dealing" distribution system consists of a network of sales representatives, some of whom are Starter employees (assigned particular retail customers) and some of whom are independent contractors (assigned specific territories).
Be that as it may, even if defendant possesses monopoly power in the relevant product market as defined by plaintiff and at the product distribution level, summary judgment in defendant's favor would still be warranted, for, as a matter of law, defendant has certainly not acquired that distribution monopoly willfully (or unlawfully), an issue that needs no further discussion; nor has it willfully maintained that monopoly.
At the very least, willful maintenance of monopoly power requires the plaintiff to prove that the monopolist has acted in an unreasonably exclusionary manner, that is, that the monopolist's challenged practice has yielded unreasonable anticompetitive effects. See Aspen Skiing Co., 472 U.S. at 602-605, 105 S.Ct. at 2857-2859; United States Football League v. National Football League, 842 F.2d 1335, 1358-1359 (2d Cir.1988); Oahu Gas Service, Inc. v. Pacific Resources Inc., 838 F.2d 360, 370 (9th Cir.), cert. denied, 488 U.S. 870, 109 S.Ct. 180, 102 L.Ed.2d 149 (1988); Paschall, 727 F.2d at 696-698, 701-702; Sports Center, Inc. v. Riddell, Inc., 673 F.2d 786, 791 (5th Cir.1982); Byars v. Bluff City News Co., 609 F.2d at 853, 860-863. In the present case, plaintiff challenges the refusal of the already vertically-integrated defendant manufacturer to continue to supply it with authentic official team jackets until such time as plaintiff agreed not to act as a distributor supplying unauthorized retailers with defendant's product as anticompetitive conduct, that is, conduct yielding unreasonable anticompetitive effects. Defendant's presentation in support of its motion for summary judgment readily reveals that there is no substance to plaintiff's challenge as a matter of law and as a matter of fact.
First, the court notes that there exists no special duty on the part of defendant to ensure that its retailer is able to compete with it at the distribution level. See, e.g., United States Football League v. National Football League, 842 F.2d at 1360-1361; Olympia Equipment Leasing Company v. Western Telegraph Company, 797 F.2d 370, 376 (7th Cir.1986), cert. denied, 480 U.S. 934, 107 S.Ct. 1574, 94 L.Ed.2d 765 (1987); see also Aspen Skiing Co., 472 U.S. at 600, 105 S.Ct. at 2856. Plaintiff's perfunctory citation to and reliance upon Fishman v. Estate of Wirtz, 807 F.2d 520 (7th Cir.1986), wherein the Court stated that, in the context of determining relevant geographic market, "[w]e know of no rule that states that the parties must be in head-to-head competition in the relevant market (as opposed to head-to-head competition for the relevant market) before the antitrust laws will apply," id. at 531, is sorely misplaced. Second, even in the absence of such a duty, defendant's legitimate business *542 decision to limit distribution of its product to certain retail outlets (and thereby refuse to supply plaintiff with authentic official jackets unless plaintiff agreed not to transship to unauthorized retailers without defendant's permission) is not conduct which has yielded unreasonable anticompetitive effects.
Defendant has, since its inception, distributed its products and had, in fact, been the sole distributor. See Disenos Artisticos e Industriales, S.A. v. Work, 714 F.Supp. 46, 48 (E.D.N.Y.1989) (recognizing that every manufacturer has a natural monopoly in the sale and distribution of its own product). As has been noted previously, no cases have been found in which a manufacturer was held liable for refusing to let go of its natural monopoly over distribution, i.e., for refusing to open up an integrated wholesale distribution system. Cf. Olympia Equipment Leasing, 797 F.2d at 376-380 (noting that, as a general matter, even a monopolist who has extended a helping hand to a potential competitor does not incur antitrust liability upon withdrawing that helping hand in the absence of an objectively anticompetitive act such as denial of access to essential facilities); Parsons v. Ford Motor Co., 669 F.2d 308, 312 (5th Cir.) (observing that the district court had dismissed claim of an unauthorized Ford dealer under section 2 of the Sherman Act on the ground that every manufacturer has a natural monopoly in the sale of its own products and that such natural monopolies do not contravene antitrust laws), cert. denied, 459 U.S. 832, 103 S.Ct. 73, 74 L.Ed.2d 72 (1982); Disenos Artisticos, 714 F.Supp. 46 (the court observing that a manufacturer with such a natural monopoly has every right to designate a particular firm as its sole distributor and, through that firm, to prohibit retailers from becoming unauthorized wholesalers or distributors). To impose liability in a case such as the present one would have the effect of punishing the manufacturer for having undertaken legitimate business decisions and would result in requiring manufacturers such as defendant to forego their natural monopoly over distribution and over control of how their product is marketed, in short, over a significant portion of their business just so another firm can realize additional profits for itself. See Sports Center, 673 F.2d at 791 ("Unless decidedly unreasonable, vertical restraints upon product distribution are permissible and even desirable.") At best, it may very well be that defendant's refusal to deal with plaintiff constitutes injury to a would-be competitor and not to competition generally, thereby taking the parties' dispute outside of the realm of the restrictions of federal antitrust law for it has been observed that the goal of antitrust law is to safeguard competition and not to protect specific competitors. See Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977); Oahu Gas Service, Inc. v. Pacific Resources Inc., 838 F.2d at 370. In any event, as noted, the refusal to permit one of its retailers to remain in the distribution business has not given rise to unreasonable anticompetitive effects.
Before proceeding any further, the court feels compelled to comment that the object of the parties' dispute is an item of apparel sports team jackets, which comprise but a small portion of outerwear available for purchase to the public and not, for example, telecommunications or a source of vital energy; moreover, even if plaintiff is not permitted to be a distributor of defendant's product, plaintiff can still continue in the lucrative retailing business. Moving on, defendant has demonstrated that its direct dealing distribution system, i.e., the system whereby it retains control over its natural monopoly over distribution, has enabled it to realize a number of objectives. First, defendant is able to select quality retail outlets consistent with the image of its products that defendant wants to project. Such retailers are selected, in part, because they are willing to make the necessary investments in advertising, instore displays and promotions. By controlling the retail outlets, defendant is able to keep a more watchful eye on counterfeiting. The absence of a distribution network, or even of another distributor, translates into lower handling costs which enables the selected retailers to pay less for *543 defendants' product and therefore charge their customers less in other words, it is hoped that retail competition is fostered. These objectives, among others noted by defendant, are facially valid to uphold defendant's decision to retain control over its natural distribution monopoly. Brief comment about some of them will suffice to uphold the court's ruling in defendant's favor.
Plaintiff has conceded that it must charge the retailers with whom it did business more for defendant's jackets than defendant charged its retailers. Plaintiff paid the same wholesale price, of course, and of necessity had to mark up the price for resale to its retailers. (Plaintiff added $7 per jacket and a second delivery charge. Defendant's July 29, 1991 Memorandum at 9 n. 3 (citing Plaintiff's June 14, 1991 Memorandum in Opposition to Summary Judgment at 82).) Although this practice was certainly lucrative for plaintiff, the court fails to understand the meaningfulness of the "competition" offered by plaintiff at the distribution level. Certainly, retail price competition would not be furthered by higher prices, and, contrary to plaintiff's assertions otherwise, plaintiff's presence as a competing distributor would not increase the supply of authentic official team jackets defendant, as the manufacturer, controlled the production of those jackets as it saw fit. Plaintiff's contention that defendant's refusal to supply plaintiff with jackets for wholesaling stemmed from a desire to restrict supply so as to maintain high prices makes no economic sense and certainly runs counter to the fact that plaintiff's presence as a distributor resulted in higher costs to the retailers with whom it conducted business. To be sure, plaintiff made defendant's product available to retailers who would not have otherwise have gotten the jackets. But plaintiff's presence as a distributor did not, and indeed could not, drive wholesale prices down.
Plaintiff admits that defendant preferred to deal with the "Macy's of the licensed apparel industry, not the K-Marts of the world," Plaintiff's June 14, 1991 Memorandum at 41 (also noting that the list of defendant's 16 largest customers is, with the exception of Sears and J.C. Penney, composed almost entirely of sports specialty stores), as if this course of conduct were somehow wrongful, and has recognized that "the place where the jackets are sold was of apparent importance to Starter," id. at 43 (emphasis supplied), as if a manufacturer, and particularly a manufacturer who has secured an exclusive right to manufacture goods under certain terms and conditions, should not be concerned with such matters. It is eminently reasonable for a manufacturer to desire to ensure that its products are marketed in an appropriate manner by retailers who project a quality image with which the manufacturer wants to be associated and by a retailer who is willing and has the ability, for example, to advertise and display the product properly. Also, it goes without saying that defendant has a justifiable interest in preventing the manufacture of counterfeit jackets. Direct dealing enables defendant to maintain more control over the problem of counterfeiting knowing who its authorized retailers are allows defendant to more easily track down goods sold at unauthorized outlets. Direct dealing also enables defendant to control the manufacture of its product and to better allocate its manufacturing resources: predictions must be made regarding which teams will be popular and therefore which jackets will be in demand; the retailers aid in this process and direct dealing facilitates the decision-making process.
It is in defendant's interest, as the holder of an exclusive manufacturing license of limited duration, to maintain an effective distribution system. That defendant has been granted these licenses since 1976 and has been quite successful supports the legitimacy of its direct dealing distribution system.
Generally speaking, vertical integration by a monopolist into distribution has been condemned where such conduct facilitates price discrimination, increases barriers to entry at the manufacturing level or aids in the evasion of the regulation of monopoly profits. See, e.g., Paschall, 727 F.2d at 702; Byars v. Bluff City News Co., 609 F.2d at 861. Significantly, none of those *544 anticompetitive effects is present here: defendant charges all of its retailers the same price; the professional sports leagues themselves decide who will be granted the right to manufacture apparel and other products bearing the various sports teams' names, symbols, emblems, designs and colors. The instant case, simply put, presents the question whether, consistent with section 2 of the Sherman Act, a manufacturer can maintain and enforce its natural monopoly over the distribution of its products. In the court's view, it can. At the very least, the defendant's refusal to deal with plaintiff unless plaintiff agreed to stop transshipping does not constitute unreasonable anticompetitive conduct, that is, defendant's refusal to supply plaintiff with authentic official team jackets has not yielded any unreasonable anticompetitive effects. The court will not countenance the disruption of this manufacturer's effective and successful distribution system just so another firm can realize additional profits for itself.
Conclusion
For the reasons stated above, the court grants defendant's motion for summary judgment dismissing the complaint. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1561359/ | 17 S.W.3d 320 (2000)
Marshall CROW, Appellant,
v.
ROCKETT SPECIAL UTILITY DISTRICT, Appellee.
No. 10-98-207-CV.
Court of Appeals of Texas, Waco.
April 12, 2000.
Rehearing Overruled May 24, 2000.
*322 Andrew R. Korn, John W. Bowdich, Andrew R. Korn, P.C., Dallas, for appellant.
Michael G. Oddo, Jennifer Rolf Dietze, Shannon Smitherman, Henry, Oddo, Austin & Fletcher, P.C., Dallas, for appellee.
Before Chief Justice DAVIS Justice VANCE and Justice GRAY.
OPINION
REX D. DAVIS, Chief Justice.
Marshall Crow sued his former employer Rockett Special Utility District ("Rockett") for age discrimination, breach of contract and fraud. The court granted Rockett's motion for summary judgment and rendered judgment that Crow take nothing by his suit. Crow claims in six issues that the court erred in granting Rockett a summary judgment: (1) on his age discrimination claim because Rockett is subject to chapter 21 of the Labor Code and he established a prima facie case of discrimination; (2) on his contract claim because he was not an at-will employee and because Rockett waived its sovereign immunity by contract; (two issues) (3) on his fraud claim because the summary judgment record contains "more than a scintilla of evidence of fraud" and because the court did not allow him adequate time for discovery; (two issues) and (4) on any of his claims because "Rockett's summary judgment evidence is fatally defective and inadmissible."
BACKGROUND
Crow began his employment with Rockett in 1988. Rockett promulgated policies in 1990 which provide in pertinent part that a third violation of Rockett's policies after prior verbal and written warnings "will be grounds for dismissal." Crow signed a statement in which he "agreed to abide" by the policies on the same date the policies took effect. Rockett terminated Crow's employment on February 14, 1994 for reasons now in dispute. Crow was fifty-five when his employment was terminated. Crow applied to Rockett for the position of general manager in November of that same year. Rockett hired another applicant for reasons now in dispute.
Crow filed suit against Rockett in January 1996 alleging breach of contract and *323 age discrimination under chapter 21 of the Labor Code. See Tex. Lab.Code Ann. § 21.051 (Vernon 1996). Rockett moved for summary judgment claiming:
chapter 21 of the Labor Code does not apply to Rockett because it did not have the requisite number of employees during any of the pertinent time periods and because it is not "a county, municipality, state agency or instrumentality";
Crow was an at-will employee; and
Rockett has sovereign immunity from any common law wrongful discharge claims.
Rockett attached five affidavits in support of its motion.
Crow then filed an amended petition adding a "common law fraud" allegation. On the same day, Crow filed a response to Rockett's summary judgment motion contending:
Rockett is subject to chapter 21 because it had the requisite number of employees and because it is a state instrumentality;
Crow was not an at-will employee; and
Rockett is not immune from a breach of contract claim.
Crow attached numerous affidavits and exhibits in support of his response. He also filed written objections to Rockett's affidavits on several grounds.
The court signed an order granting Rockett's motion as to Crow's contract claim, but denying the motion with respect to his age discrimination claim. The court's order left Crow's fraud claim pending because it was raised after the filing of the summary judgment motion.
One month later, Rockett filed a second motion for summary judgment on the fraud claim. Again, Rockett asserted an entitlement to judgment as a matter of law because no material fact issue exists as to an essential element of Crow's fraud claim. Rockett attached two affidavits in support of the second motion. Crow responded to Rockett's second motion for summary judgment by asserting:
material fact issues exist on Rockett's "intent not to perform a promise at the time that promise was made" and on Crow's "reliance to his detriment on [Rockett's] misrepresentation";
Rockett has failed to conclusively disprove any element of his fraud claim; and
Rockett's "Summary Judgment evidence is fatally defective, and is insufficient to support Summary Judgment."
Crow attached an affidavit in support of this response and referred the court to other evidence already in the record. He filed written objections to the affidavits attached to Rockett's second motion.
Rockett next filed a motion asking the court to vacate and reconsider the partial summary judgment. Rockett premised this motion on a December 1997 letter from the court stating, "Upon receipt of the proper order, the Defendant in the above referenced cause will be granted Partial Summary Judgment as to causes of action alleged in Plaintiff's Original Petition." Rockett attached the letter as an exhibit. Rockett asked the court to vacate the prior order and enter "an Order consistent with its letter ruling which grants Defendant's Motion for Summary Judgment as to the breach of contract claim and age discrimination claim."
The court heard Rockett's second summary judgment motion and the motion to vacate simultaneously. The court granted both and entered a final summary judgment decreeing that Crow take nothing by his suit.
SUMMARY JUDGMENT EVIDENCE
Crow argues in his sixth issue that Rockett's summary judgment evidence "is fatally defective and inadmissible." He concedes that his objections "were never ruled on" by the trial court but counters *324 that his objections go to the substance of Rockett's affidavits and may be raised for the first time on appeal. See Ahumada v. Dow Chemical Co., 992 S.W.2d 555, 562 (Tex.App.-Houston [14th Dist.] 1999, pet. denied); Peerenboom v. HSP Foods, Inc., 910 S.W.2d 156, 160 (Tex.App.-Waco 1995, no writ).
Crow filed thirty pages of objections in response to the five affidavits attached to Rockett's original summary judgment motion. He filed additional objections to the affidavits attached to Rockett's second motion. Crow made one or more of the following objections to specifically-identified sentences in each of Rockett's affidavits:
statement includes self-serving speculation;
statement lacks an affirmative showing that the witness has personal knowledge of these facts;
statement is that of an interested witness that is not clear, positive, direct, or free from contradiction;
statement, on its face, is based on hearsay;
statement violates the best evidence rule;
statement is argumentative;
witness has not provided a predicate for expert opinion;
statement constitutes unqualified expert opinion;
statement is a legal conclusion; or
statement is not of facts, but opinions and conclusions.
The first six objections complain of the form of Rockett's summary judgment proof. Grand Prairie Indep. Sch. Dist. v. Vaughan, 792 S.W.2d 944, 945 (Tex.1990) (per curiam) (personal knowledge); Ahumada, 992 S.W.2d at 562 (interested witness); Harris v. Spires Council of Co-Owners, 981 S.W.2d 892, 897 (Tex.App.-Houston [1st Dist.] 1998, no pet.) (hearsay); Williamson v. New Times, Inc., 980 S.W.2d 706, 711 (Tex.App.-Fort Worth 1998, no pet.) (self-serving); Rodriguez v. Ed Hicks Imports, 767 S.W.2d 187, 190 (Tex.App.-Corpus Christi 1989, no writ) (best evidence).[1] Because Crow failed to obtain a ruling on these objections, he has failed to preserve them for our review. See Ahumada, 992 S.W.2d at 562; Peerenboom, 910 S.W.2d at 160; see also Tex. R.App. P. 33.1(a)(2)(A). Accordingly, the portion of Rockett's affidavits to which Crow raised only these objections "remain[s] a part of the summary judgment record." Peerenboom, 910 S.W.2d at 160; accord Southwell v. University of the Incarnate Word, 974 S.W.2d 351, 354 (Tex.App.-San Antonio 1998, pet. denied).
The courts have generally held that an objection to the conclusory nature of a summary judgment affidavit or the failure of an expert's affidavit to disclose the expert's qualifications goes to the substance of the affidavit. See, e.g., Cain v. Rust Indus. Cleaning Servs., Inc., 969 S.W.2d 464, 467 (Tex.App.-Texarkana 1998, pet. denied). Accordingly, we will address the merits of these objections. See Ahumada, 992 S.W.2d at 562; Cain, 969 S.W.2d at 467-68; Peerenboom, 910 S.W.2d at 160.
After reviewing the statements to which Crow raised these objections of substance, we conclude that the majority of the statements are statements of fact relating to the contents of Rockett's administrative policies, the general manager's authority to hire and fire employees, the qualifications Rockett required of applicants for the general manager's position, the names and ages of the three applicants who were presented to the board of directors for interview, and lay opinion about the qualifications of these applicants (i.e., they were better qualified than Crow). Therefore, the statements do not constitute legal conclusions or unqualified *325 expert opinion. Accordingly, Crow's objections must fail as to these statements.
The remainder of Crow's objections go to the first and second affidavits of Alton Adams, the president of Rockett's board of directors. Crow objects to Adams's statements describing Crow as an at-will employee. He objects to Adams's characterization of Rockett's administrative policies as "guidelines," presumably as opposed to a modification of Crow's at-will status. Finally, Crow objects to Adams's statement that Rockett did not discriminate or intend to discriminate against "Crow or any other employee on the basis of age or for any other basis or reason." We agree that these statements constitute legal conclusions. Accordingly, we will not consider them in reviewing the trial court's decision. See Rizkallah v. Conner, 952 S.W.2d 580, 587 (Tex.App.-Houston [1st Dist.] 1997, no pet.).
We sustain Crow's sixth issue in part and overrule it in part.
AGE DISCRIMINATION
Crow contends in his first issue that the court erred in granting summary judgment on his age discrimination claim because a fact issue exists on the question of whether Rockett terminated him or subsequently refused to hire him because of his age. See Tex. Lab.Code Ann. § 21.051. Rockett responds that it is not subject to chapter 21 of the Labor Code because it is not an "employer" as that term is defined in chapter 21. Rockett responds in the alternative that Crow failed to produce sufficient evidence to sustain his age discrimination claim.
Section 21.002(8)(D) provides that an employer under chapter 21 includes any "county, municipality, state agency, or state instrumentality." Tex. Lab.Code Ann. § 21.002(8)(D) (Vernon Supp.2000). Rockett was created by authority of article XVI, section 59 of the Texas Constitution. See Tex. Water Code Ann. § 65.011 (Vernon 1988); Tex. Const. art. XVI, § 59. A district so created is "an agent of the State... exercising the State's police power." McMillan v. Northwest Harris County Mun. Util. Dist. No. 24, 988 S.W.2d 337, 341 (Tex.App.-Houston [1st Dist.] 1999, pet. denied). Thus, Rockett is, at a minimum, an instrumentality of the State subject to the provisions of chapter 21 of the Labor Code. See The New American Roget's College Thesaurus 260 (rev. ed.1978) (listing "agent" as synonym for "instrumentality").
An employer commits discrimination under chapter 21 if the employer "fails or refuses to hire an individual" or "discharges an individual" "because of race, color, disability, religion, sex, national origin, or age." Tex. Lab.Code Ann. § 21.051(1). Chapter 21 has as one of its express purposes "the execution of the policies embodied in Title VII of the federal Civil Rights Act of 1964 as amended (42 U.S.C. Section 2000e et seq.)." Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 485 (Tex.1991); see also Tex. Lab.Code Ann. § 21.001(1) (Vernon 1996); accord Gold v. Exxon Corp., 960 S.W.2d 378, 380 (Tex.App.-Houston [14th Dist.] 1998, no pet.); Rios v. Texas Commerce Bancshares, Inc., 930 S.W.2d 809, 818 (Tex.App.-Corpus Christi 1996, writ denied).
Texas courts have thus followed federal precedents to describe the allocation of burdens between employer and employee under chapter 21 as follows:
In order to show a prima facie case of employment discrimination, the plaintiff must show 1) that he was a member of a protected class, 2) that he suffered an adverse employment action, and 3) that non-protected class employees were not treated similarly. Once the plaintiff has established a prima facie case, the burden of production shifts to the employer to articulate legitimate, nondiscriminatory reasons for any allegedly unequal treatment. If legitimate nondiscriminatory reasons are established by the employer, the burden then shifts back to the plaintiff to prove that the employer's *326 articulated reasons are a pretext for unlawful discrimination. Even though the burden of production shifts, the burden of persuasion remains continuously with the plaintiff.
Rios, 930 S.W.2d at 818 (citations omitted); accord Gold, 960 S.W.2d at 381; Farrington v. Sysco Food Servs., Inc., 865 S.W.2d 247, 251 (Tex.App.-Houston [1st Dist.] 1993, writ denied) (op. on reh'g).
When an employer moves for summary judgment on a discrimination claim under chapter 21, we have determined that the burden-shifting approach applies to only the third element. Jenkins v. Guardian Indus. Corp., 16 S.W.3d 431, 438-39 (Tex.App.-Waco 2000, no pet. h.). Thus, we stated in Jenkins:
The employer-movant may attempt to show that non-protected employees were treated similarly. If so, the issue may be joined when the employee produces summary judgment evidence that raises a fact issue about how various employees were treated. The employer-movant may, however, with or without conceding that the plaintiff was treated differently, advance legitimate, nondiscriminatory reasons for the allegedly unequal treatment. If such a reason is advanced, then the employee may be called upon to produce summary judgment evidence that raises a fact issue about whether the employer's articulated reasons are a pretext for unlawful discrimination. In either event, we must bear in mind that under our summary judgment practice, the burden of proof never shifts to the non-movant unless and until the movant has established its entitlement to a summary judgment on the issues expressly presented to the trial court.
Id. at 438-39.
Bearing these standards in mind, we first review the record with respect to Crow's claim that Rockett terminated his employment in February 1994 because of his age. In this regard, Rockett alleged in its motion for summary judgment that it is entitled to judgment as a matter of law on this claim because it is not subject to chapter 21. We have already determined that chapter 21 does apply to Rockett because it is an instrumentality of the State. See Tex. Lab.Code Ann. § 21.002(8)(D). Thus, Rocket is not entitled to judgment as a matter of law on this basis.
Rockett's motion also states:
[Crow] was discharged on February 14, 1994 for failing to call in his absence at the beginning of the work period, for not adequately fixing a leak, for taking four hours at a job that would normally take one to two hours, and for not following his employer's instructions.
However, none of these alleged grounds for termination appears in Rockett's summary judgment proof. Rather, Rockett's affidavits focus on Crow's at-will status and the reasons Crow was not later hired for the general manager's position. Because Rockett offered no summary judgment evidence of legitimate, non-discriminatory reasons for Crow's termination, we conclude Rockett failed to establish its entitlement to summary judgment on this aspect of Crow's claim. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.1995); Wilcox v. Hempstead, 992 S.W.2d 652, 656 (Tex.App.-Fort Worth 1999, no pet.).
We now apply the same analysis to Crow's claim that Rockett failed to hire him in November 1994 because of his age. Rockett again relied primarily on its argument that it is not subject to chapter 21. However, Rockett went further and proffered evidence of some of the reasons it chose another applicant over Crow for the general manager's position. Rockett presented the affidavits of three of its board members who served on the selection committee for the general manager's position. The board members stated in these affidavits:
one of the criteria for the position was a minimum of four years' supervisory experience;
*327 the committee received approximately fifty resumes for the position;
the committee reviewed the resumes and decided to interview ten of the candidates;
the committee did not invite Crow for an interview because the committee "was familiar with Mr. Crow and his work habits and [was] of the opinion that he was unable to get along with the employees and did not have any supervisory experience as required by the criteria";
Crow's age "was not a factor in the decision not to interview him";
after the interviews, the committee presented three of the candidates to the board for consideration;
the candidate ultimately hired "appeared to be in his late 30's or early 40's";
the other two finalists "appeared to be in [their] 50's";
the ages of the three finalists played no role in the Board's determination of which to hire; and
"there were individuals with better qualifications than Mr. Crow who were not interviewed or did not make the final cut to be presented to the Board."
Rockett's summary judgment proof asserts essentially that Rockett did not hire Crow for the position because he did not have the supervisory experience required for the position and because other candidates were more qualified. These constitute legitimate, non-discriminatory reasons for Rockett's decision to hire someone other than Crow. See Gold, 960 S.W.2d at 383. The burden thus shifted to Crow to produce evidence that Rockett's "articulated reasons are a pretext for unlawful discrimination." Jenkins, at 438-39; accord Gold, 960 S.W.2d at 381; Rios, 930 S.W.2d at 818; Farrington, 865 S.W.2d at 251.
Crow provided the affidavit of Charles K. Davidson who stated that Arthur Black, a former Rockett manager, told him that he fired Crow because he was "too damn old." Crow states in his affidavit that he was the manager of a manufacturing plant "for approximately four years" and at one time supervised 130 employees. This evidence raises a fact issue on whether Rockett's stated rationale for not hiring him is pretextual.
With respect to Crow's claim that Rockett terminated his employment in February 1994 because of his age, Rockett failed to produce any proper summary judgment evidence of legitimate, non-discriminatory reasons for Crow's termination. See Centeq Realty, 899 S.W.2d at 197; Wilcox, 992 S.W.2d at 656. Thus, we conclude Rockett failed to establish its entitlement to summary judgment on this aspect of Crow's claim.
Concerning Crow's claim that Rockett refused to hire him as general manager in November 1994 because of his age, Crow presented sufficient summary judgment evidence to raise a material fact question on the issue of whether Rockett's stated rationale for hiring someone else is merely pretextual. For this reason, the court erred in granting summary judgment on this aspect of Crow's claim. See American Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex.1997).
Accordingly, we sustain Crow's first issue.
BREACH OF CONTRACT
Crow asserts in his second issue that the court erred in granting summary judgment because Rockett's administrative policies altered his status as an at-will employee. This Court has ruled in a previous unpublished opinion that Rockett's administrative policies do not alter the at-will employment relationship Rockett has with its employees.[2] Both parties acknowledge *328 our prior decision, and Crow seeks to distinguish it only by a footnote in which he cites decisions from courts in seven other states which he asserts "would hold to the contrary."
Rockett's administrative policies do not "specifically and expressly curtail[]" Rockett's "right to terminate [its] employee[s]." Figueroa v. West, 902 S.W.2d 701, 705 (Tex.App.-El Paso 1995, no writ); accord McAlister v. Medina Elec. Coop., Inc., 830 S.W.2d 659, 664 (Tex.App.-San Antonio 1992, writ denied). Thus, the policies did not alter the at-will relationship Rockett had with Crow. See Federal Express Corp. v. Dutschmann, 846 S.W.2d 282, 283 (Tex.1993) (per curiam). Accordingly, we overrule Crow's second issue.
SOVEREIGN IMMUNITY
Crow claims in his third issue that the court erred in granting summary judgment because "Rockett waived any immunity it would be entitled to by contracting with Crow, a private citizen." See Federal Sign v. Texas So. Univ., 951 S.W.2d 401, 405-06 (Tex.1997). Rockett responds that it has not waived its immunity from liability because there was no employment contract. We have already determined that Rockett did not enter a contract with Crow. Thus, Rockett has not contractually waived its immunity from liability.[3]Cf. Federal Sign, 951 S.W.2d at 405-06 (immunity from liability waived by contract). Accordingly, we overrule Crow's third issue.
ADEQUATE TIME FOR DISCOVERY
Crow avers in his fifth issue that the court erred in granting summary judgment on the fraud claim because the court did not allow him adequate time for discovery before ruling on "Rockett's no evidence motion for summary judgment." Rockett responds that Crow has not preserved this issue for our review.
We observe first that neither of Rockett's summary judgment motions qualifies as a "no-evidence motion" under Rule of Civil Procedure 166a(i) because Rockett presented affidavits in support of each. See Ethridge v. Hamilton County Elec. Coop. Ass'n, 995 S.W.2d 292, 295 (Tex.App.-Waco 1999, no pet. h.). Therefore, the requirement of Rule 166a(i) that a party can present such a motion only "[a]fter adequate time for discovery" does not apply in this case. See Tex.R. Civ. P. 166a(i).
Nevertheless, Rule 166a(g) permits a court to grant a continuance for additional discovery to be had when the party opposing summary judgment presents affidavits asserting "that he cannot for reasons stated present by affidavit facts essential to justify his opposition." Id. 166a(g). Accordingly, we will address Crow's fifth issue as a claim that the court erroneously denied his request for a continuance under Rule 166a(g).
"When a party contends that it has not had an adequate opportunity for discovery before a summary judgment hearing, it must file either an affidavit explaining the need for further discovery or a verified motion for continuance." Tenneco, Inc. v. Enterprise Prods. Co., 925 S.W.2d 640, 647 (Tex.1996).
Crow's original petition alleged only his contract and age discrimination claims. Rockett filed its first motion for summary judgment on July 28, 1997, almost nineteen months after Crow filed his original petition. Crow filed a motion for continuance on August 25. Crow filed an affidavit in support of the motion in which counsel asserted more time was needed to depose *329 a particular Rockett employee, the president of Rockett's board of directors, and "possibly other individuals who may have knowledge of relevant facts." The court denied the motion on September 3. Crow filed his amended petition on September 11, alleging for the first time a cause of action for fraud.
Rockett filed its second motion for summary judgment on March 13, 1998. In the second motion, Rockett asked the court for summary judgment on Crow's fraud claim. Crow did not request a continuance with respect to Rockett's second motion.
For a party to preserve error, Rule of Appellate Procedure 33.1(a)(1) requires among other things that the party present a timely motion to the trial court stating the grounds for the ruling sought with adequate specificity and otherwise complying with the requirements of any applicable procedural rule. Tex.R.App. P. 33.1(a)(1). Crow failed to present a motion for continuance under Rule 166a(g) in response to Rockett's second motion for summary judgment. Thus, he has failed to preserve his complaint for our review. Id. Accordingly, we overrule his fifth issue.
FRAUD
Crow contends in his fourth issue that the court erred in granting summary judgment because the record contains "more than a scintilla of evidence of fraud." Rockett responds that Crow's fraud claim is barred as a matter of law because he was an at-will employee.
Rockett relies on authority from the First Court of Appeals that "[a]n `at will' employee is barred from bringing a cause of action for fraud against his employer based upon the employer's decision to discharge the employee." Leach v. Conoco, Inc., 892 S.W.2d 954, 961 (Tex.App.-Houston [1st Dist.] 1995, writ dism'd w.o.j.); accord Molder v. Southwestern Bell Tel. Co., 665 S.W.2d 175, 177 (Tex. App.-Houston [1st Dist.] 1983, writ ref'd n.r.e.).
The Beaumont Court has limited the application of this rule, construing the decision of the Supreme Court in Johnson & Johnson Medical, Inc. v. Sanchez to allow, "at least under some circumstances, a fraud claim by an employee against an employer during an employment at will relationship." See Offshore Petroleum Divers, Inc. v. Cromp, 952 S.W.2d 954, 955 (Tex.App.-Beaumont 1997, pet. denied) (citing Johnson & Johnson, 924 S.W.2d 925, 928-30 (Tex.1996)).[4] We disagree. The employee's relationship with her employer in Johnson & Johnson was governed by a collective bargaining agreement. Johnson & Johnson, 924 S.W.2d at 927. Thus, she was not an at-will employee. See Turner v. Owens-Corning Fiberglas Corp., 777 S.W.2d 792, 795 (Tex.App.-Beaumont 1989), writ granted w.r.m., 787 S.W.2d 955 (Tex.1990).
In an at-will employment relationship, "employment may be terminated by the employer or the employee at will, for good cause, bad cause, or no cause at all." Montgomery County Hosp. Dist. v. Brown, 965 S.W.2d 501, 502 (Tex.1998); accord East Line & R.R.R. Co. v. Scott, 72 Tex. 70, 75, 10 S.W. 99, 102 (1888). We have already determined that Rockett's administrative policies did not alter the at-will relationship it had with Crow. If an at-will employee such as Crow were allowed to assert that his employer's policies constitute fraudulent representations, then *330 the at-will employment doctrine would be effectively eviscerated. See Leach, 892 S.W.2d at 961; Jones, 846 S.W.2d at 925; Molder, 665 S.W.2d at 177. This we decline to allow.
As a bar to recovery, Crow's at-will status constitutes an affirmative defense. See Vaughn v. Sturm-Hughes, 937 S.W.2d 106, 108 (Tex.App.-Fort Worth 1996, writ denied). Summary judgment for the defendant is proper if he disproves at least one element of the plaintiff's claim or establishes all elements of an affirmative defense to the claim. American Tobacco, 951 S.W.2d at 425. Thus, to prevail on the affirmative defense of at-will employee status, Rockett must establish: (1) Crow was an at-will employee; and (2) the representations on which Crow relies for his fraud claim were made after he began his employment with Rockett. See Offshore Petroleum Divers, 952 S.W.2d at 956; Leach, 892 S.W.2d at 961.
Rockett's summary judgment evidence establishes that the parties had no agreement prohibiting Rockett from terminating Crow's employment at will. Rockett's evidence also establishes that Rockett adopted the policies on which Crow bases his fraud claim more than two years after Crow began his employment with Rockett. Accordingly, the summary judgment evidence conclusively establishes Rockett's affirmative defense. See American Tobacco, 951 S.W.2d at 425. Thus, we overrule Crow's fourth issue.
CONCLUSION
We have determined that the trial court erred in rendering a summary judgment on Crow's age discrimination claims because Crow raised material fact issues with respect to each of them. However, the trial court did not err in rendering a summary judgment on Crow's contract and fraud claims. Accordingly, we will affirm the judgment in part and reverse and remand the judgment in part.
We affirm the portion of the summary judgment granted on Crow's contract and fraud claims. We reverse the portion of the summary judgment granted on his age discrimination claims, sever, and remand that portion of this cause to the trial court for further proceedings consistent with this opinion. See Aero Energy, Inc. v. Circle C Drilling Co., 699 S.W.2d 821, 823 (Tex.1985); Blankenship v. Brazos Higher Educ. Auth., Inc., 975 S.W.2d 353, 364 (Tex.App.-Waco 1998, pet. denied).
NOTES
[1] Our research has disclosed no cases considering an "argumentative" objection to summary judgment evidence. Nevertheless, we hold that this is an objection to the form of the affidavit.
[2] The prior decision is Draper v. Rockett Special Util. Dist., No. 10-96-146-CV (Tex.App.-Waco Dec. 17, 1997, no pet.) (not designated for publication). Crow's counsel represented Appellant Draper in this previous case.
[3] To the contrary however, the Legislature has waived Rockett's immunity from liability under chapter 21 of the Labor Code by making instrumentalities of the State subject to the provisions of that chapter. See Federal Sign v. Texas So. Univ., 951 S.W.2d 401, 405 (Tex.1997); Tex. Lab.Code Ann. § 21.002(8)(D) (Vernon Supp.2000).
[4] The Beaumont Court also placed some reliance on Spoljaric v. Percival Tours, Inc. to support its position. Offshore Petroleum Divers, Inc. v. Cromp, 952 S.W.2d 954, 955 n. 1 (Tex.App.-Beaumont 1997, pet. denied) (citing Spoljaric, 708 S.W.2d 432 (Tex.1986)). However, we find Spoljaric inapposite because it did not involve a fraud claim "based upon the employer's decision to discharge the employee." Leach v. Conoco, Inc., 892 S.W.2d 954, 961 (Tex.App.-Houston [1st Dist.] 1995, writ dism'd w.o.j.). Rather, Spoljaric concerned an at-will employee who "walked off the job" then sued his employer for breach of an oral contract and fraudulent misrepresentation related to a bonus plan the employer had allegedly promised to implement. Spoljaric, 708 S.W.2d at 434. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1561392/ | 17 S.W.3d 472 (2000)
341 Ark. 474
James L. FLOWERS
v.
NORMAN OAKS CONSTRUCTION COMPANY.
No. 99-1520.
Supreme Court of Arkansas.
June 1, 2000.
*473 Baxter, Jensen, Payne, Young & Smith, by: Terence C. Jensen, Benton, for appellant.
Roberts Law Firm, P.A., by: Mike Roberts and J. Mark White, Little Rock, for appellee.
ROBERT L. BROWN, Justice.
The appellant, James Flowers, is a house framer and carpenter. While framing a house and attempting to extend scaffolding at the site, he lost his balance and fell more than twenty feet. He landed on his back which caused a fracture to his spine. The Administrative Law Judge found that there was sufficient evidence to show the presence of alcohol and to raise the rebuttable presumption that the injury was substantially occasioned by the presence of alcohol. The ALJ further found that Flowers had failed to rebut this presumption due to failure of proof and lack of credibility. The Workers' Compensation Commission, with one commissioner dissenting, adopted the findings of the ALJ and concluded that he was correct in denying benefits. Flowers appealed, and the court of appeals reversed the Commission in a plurality decision. Flowers v. Norman Oaks Construction Co., Inc., 68 Ark. App. 239, 6 S.W.3d 118 (1999). Four judges of the court of appeals agreed to reverse the Commission on the basis that the presence of alcohol was not established by the mere smell of alcohol on Flowers's breath. One judge agreed with reversal but wrote that the only means to establish the fact that alcohol is present is by a blood-alcohol test. Four judges dissented on the basis that the smell of alcohol on Flowers's breath was documented by medical personnel and that Flowers had admitted to drinking between six and eight beers on the evening prior to the injury. We affirm the Commission and reverse the court of appeals.
The facts in this case are largely undisputed. After Flowers fell from the scaffolding at approximately nine o'clock in the morning on December 6, 1997, he was taken by ambulance to Baptist Medical Center in Little Rock where he underwent a spinal fusion. The report of the emergency medical technician who accompanied Flowers to the hospital stated: "Strong smell of ETOH on pt. He states he drank last pm but denies ETOH this day." *474 Flowers's Emergency Room Record completed by a registered nurse at the hospital that same morning stated "Smell of ETOH about breath." No blood-alcohol tests were administered to determine the presence of ETOH, which is an acronym for alcohol, in Flowers's blood.
According to Flowers's testimony before the ALJ, he was in the process of putting together a walk-board when he pulled back a two-by-twelve board, and it slipped off the scaffolding pole, causing him to lose his balance and fall more than twenty feet. He testified that the night before the injury, he drank six or eight beers with his friends over a five-hour period and went to bed at 11:30 p.m. He said that he stopped drinking by 11:00 or 11:30 p.m. He was at work by seven o'clock the next morning, and the accident occurred around nine o'clock a.m. He said he drank coffee the morning of the accident but no alcohol. Flowers admitted that he drank several beers three or four nights a week.
On cross-examination, Flowers testified that he had said in an earlier deposition that he had been drinking alone rather than with friends but stated he was not alone "all the time." He further admitted that he had been cited for DWI three times over the past five years. He offered that the paramedic reported a strong smell of alcohol, because he was wearing the same clothes from the night before and had not brushed his teeth or taken a shower. He stated that the only time he drank beer on a jobsite was after working hours.
Two other witnesses testified about Flowers and beer consumption. After the accident, Steven Coleman, a building contractor, investigated the jobsite where Flowers was injured for signs of alcoholic beverages and found six to ten beer cans. Charles Smith, a framing subcontractor who was building a house next to the jobsite where Flowers was injured, saw Flowers at work with Busch beer cans in his coat in late November or early December 1997. He did not actually see Flowers drinking beer on the job. A medical record entered after Flowers was readmitted to the hospital on December 14, 1997, stated that Flowers admitted to drinking a twelve-pack or a six-pack of beer every day.
After the court of appeals reversed the Commission's denial of benefits, Norman Oaks Construction petitioned this court for review of the decision pursuant to Rule 2-4 of the Rules of the Arkansas Supreme Court. This court granted the petition. When this court grants review in a case such as we have before us, we review the Commission's opinion as if the appeal had been originally brought to this court. Meister v. Safety Kleen, 339 Ark. 91, 3 S.W.3d 320 (1999).
Flowers, in his appeal from the Commission's opinion, raises three issues. He contends that the Commission erred in finding that he did not sustain a compensable injury and that he was intoxicated at the time of the accident. The trial court further erred, according to Flowers, in its application of Ark.Code Ann. § 11-9-102(4)(B)(iv)(a-c) (Supp.1999).[1] We begin by quoting the pertinent subsections of the Code:
(B) "Compensable injury" does not include:
....
(iv)(a) Injury where the accident was substantially occasioned by the use of alcohol, illegal drugs, or prescription drugs used in contravention of physician's orders.
(b) The presence of alcohol, illegal drugs, or prescription drugs used in contravention of a physician's orders shall create a rebuttable presumption that the injury or accident was substantially occasioned *475 by the use of alcohol, illegal drugs, or prescription drugs used in contravention of physician's orders.
(c) Every employee is deemed by his performance of services to have impliedly consented to reasonable and responsible testing by properly trained medical or law enforcement personnel for the presence of any of the aforementioned substances in the employee's body.
Flowers argues that the clear intention of the presumption in § 11-9-102, when read as a whole, requires blood or urine testing by trained medical or law enforcement personnel to create a presumption. Moreover, he emphasizes that subsection (4)(b)(iv)(c) describes the appropriate testing for "the presence of the aforementioned substances in the employee's body." The use of the term "in the employee's body" in subsection (c), according to Flowers, further suggests that to raise the applicable presumption, the substance must be present in the employee's blood stream and not merely on his breath. Finally, he asserts that the statement of one person that the smell of alcohol existed on another person is too subjective and cannot substitute for valid medical testing.
Flowers goes on to explain the reasons he might have smelled of alcohol. He admits that he had been drinking the night before, but adds that he had worn the same clothes to work as he had worn the previous night and had not brushed his teeth on the day of the accident. He also offers that the medical personnel could have been mistaken as to what they smelled, especially since alcohol in its pure form has no smell. There was no testimony by his employer or co-workers, he emphasizes, that he had slurred speech or was unsteady on his feet. Similar testimony, he notes, is often given by police officers to prove intoxication following a DWI charge.
We are persuaded that the Commission's finding of the presence of alcohol is supported by substantial evidence. Flowers admitted that he drank six to eight beers at his home with some friends the night before the accident. He stated that he went to bed by 11:00 or 11:30 p.m. the evening before the accident and left for work on the morning of the accident at about 6:30 a.m. Upon arrival at the accident scene, EMT paramedics noted "a strong smell of ETOH" about Flowers at 8:45 a.m. The registered nurse at the hospital reported that Flowers had a "smell of ETOH about breath." When Flowers was readmitted to the hospital a week later complaining of hallucinations, his medical records state that he admitted that he habitually drank a twelve-pack or six-pack of beer a day.
There was also circumstantial evidence that Flowers drank beer at the jobsite. Charles Smith testified that he had seen Flowers at work on a different day than the day of the accident display Busch beer cans hidden in his coat. (Flowers admitted that Busch is his preferred brand of beer.) Smith testified that the same day he saw Flowers with beer in his coat, he saw Flowers fall and injure himself. Steven Coleman testified that he found between six and twelve empty Busch beer cans on the jobsite a few days after the accident. Coleman also testified that no other work crew was at that site between the time of the accident and the day he found the beer cans.
In reviewing an appeal from the Commission, this court views the evidence in the light most favorable to the Commission's decision and affirms when that decision is supported by substantial evidence. Meister v. Safety Kleen, supra. Such evidence exists if reasonable minds could reach the same conclusion. This court will not reverse the Commission's decision unless fair-minded persons could not have reached the same conclusion when considering the same facts. See Ester v. National Home Ctrs., Inc., 335 Ark. 356, 981 S.W.2d 91 (1998).
*476 The Workers' Compensation Law must be strictly and literally construed by the Commission and the courts. See Stephens Truck Lines v. Millican, 58 Ark.App. 275, 950 S.W.2d 472 (1997). A particular provision in a statute must be construed with reference to the statute as a whole. See Boyd v. State, 313 Ark. 171, 853 S.W.2d 263 (1993).
This court has defined a statutory presumption as "a rule of law by which the finding of a basic fact gives rise to the existence of a presumed fact, unless sufficient evidence to the contrary is presented to rebut that presumption." ERC Contr. Yard & Sales v. Robertson, 335 Ark. 63, 69, 977 S.W.2d 212, 215 (1998). This court in ERC Contr. pointed out that the statutory presumption does not "quantify the term `presence.' Therefore alcohol is present whenever any amount of alcohol is revealed, no matter how small." Id. We further stated in ERC Contr. that even though the employee's blood-alcohol test revealed a low alcohol level, the test revealed the presence of alcohol and triggered the statutory presumption. See id.
In several recent cases, both this court and the court of appeals have held that the presence of drugs or alcohol established only by metabolites or a slight amount of the drugs or alcohol was sufficient to raise the rebuttable presumption and shift the burden of proof to the claimant to rebut the presumption. See Ester v. National Home Ctrs., Inc., supra; Express Human Resources III v. Terry, 61 Ark.App. 258, 968 S.W.2d 630 (1998); Brown v. Alabama Elec. Co., 60 Ark.App. 138, 959 S.W.2d 753 (1998), petition for review denied, 334 Ark. 35, 970 S.W.2d 807 (1998); Weaver v. Whitaker Furniture Co., 55 Ark.App. 400, 935 S.W.2d 584 (1996). However, in each of these cases some type of medical test was administered to the employee. In Ester, the employee tested positive in a drug-screen test for opiates and cocaine metabolites. In Express Human Resources, Brown, and Weaver, urine specimens were tested revealing the presence of metabolites of the drug in question.
This court and the court of appeals have further upheld a finding of "presence" where the admitted use of drugs occurred several hours or even days before the accident and injury. See Ester v. National Home Ctrs., Inc., supra, (employee admitted using cocaine three days before accident); Express Human Resources III v. Terry, supra, (employee admitted using marijuana four days prior to the accident); Continental Express v. Harris, 61 Ark. App. 198, 965 S.W.2d 811 (1998) (employee ingested alcohol twelve hours before accident).
Our research shows that Arkansas appears to be the only state that raises a presumption that an accident was substantially caused by drugs or alcohol by merely establishing the presence of drugs or alcohol without requiring that that presence be confirmed by medical testing. Some statutes in other states require an employee's intoxication for the injury to be noncompensable. See, e.g., Ala.Code § 25-5-51 (1992 Repl.); Conn. Gen. State. § 31-284 (1999); Del.Code Ann. tit. 19, § 2353 (1995 Repl.); S.D. Codified Laws § 62-4-37 (1993 Rev.); Vt. Stat. Ann. tit. 21, § 649 (1987). Other statutes require blood-alcohol testing. See, e.g., Tenn.Code Ann. § 50-6-110 (1999 Repl.); Va.Code Ann. § 65.2-306 (1995 Repl.). On this point, the court of appeals has stated that § 11-9-102 does not require:
that the Commission promulgate drug-testing procedures or specify particular types of tests to be used as a precondition to the intoxication presumption. The Arkansas General Assembly could have required testing that would show a certain level of illegal drugs, as it has required to invoke the presumption in DWI cases, but it has not made such a requirement.
Brown v. Alabama Elec. Co., 60 Ark.App. at 144, 959 S.W.2d at 756. We agree with that assessment. The end result is that our standard for noncompensability due to *477 drug or alcohol consumption is broad and far-reaching.
Observations of police officers, which include as one element the smell of alcohol on a suspect's breath, can constitute competent evidence to support a DWI charge. See Johnson v. State, 337 Ark. 196, 987 S.W.2d 694 (1999) (sufficient evidence of intoxication where appellant was driving erratically and left of center, smelled of alcohol, was unable to stand upright without support, was unsteady on his feet, had bloodshot eyes, and refused to submit to breath or field sobriety tests). Thus, intoxication for a DWI conviction is not dependent on evidence of blood-alcohol testing where other sufficient evidence of intoxication exists. See Mace v. State, 328 Ark. 536, 944 S.W.2d 830 (1997). This is so because the General Assembly has provided that a person can be found guilty of a DWI if he or she either (1) operates a motor vehicle while intoxicated or (2) operates a motor vehicle with a blood-alcohol content of .10 percent or more. See State v. Johnson, 326 Ark. 189, 931 S.W.2d 760 (1996); see also Ark.Code Ann. § 5-65-103(a) and (b) (Repl.1997).
The instant case does not involve facts where a co-worker or an acquaintance testified to the smell of alcohol on Flowers's breath. It is a case where two people working in the medical field on the day of the accident entered their objective assessments on separate medical records. One was an emergency medical technician; the other a registered nurse. The EMT's report was not only that he smelled alcohol on Flowers but that the smell was "strong." The registered nurse smelled alcohol on Flowers's breath. Surely this testimony is equal in trustworthiness to that of a police officer in the field. When this testimony is coupled with Flowers's own admission of heavy beer consumption the night before as well as the circumstantial evidence of beer consumption on the jobsite and Flowers's habitual consumption of beer, we hold that there is substantial evidence to support the Commission's finding of the presence of alcohol.
We further agree with the Commission that Flowers failed to rebut the presumption that the presence of alcohol substantially caused him to lose his balance. He presented no witnesses to the contrary, and his own testimony lacked credibility according to the findings of the ALJ, which the Commission adopted. Accordingly, we affirm the Commission and reverse the decision of the court of appeals.
THORNTON, J., not participating.
NOTES
[1] In Volume 7 of the Arkansas Code, 1996 Replacement, the citation for this subsection was Ark.Code. Ann. § 11-9-102(5)(A)(iv)(a-c) (Repl.1996). The subsections were renumbered due to subsequent legislation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555331/ | 36 So.3d 92 (2010)
BAKER
v.
STATE.
No. 2D10-1923.
District Court of Appeal of Florida, Second District.
May 18, 2010.
Decision Without Published Opinion Belated Appeal denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555356/ | 36 So.3d 687 (2010)
FORNEY
v.
STATE.
No. 5D10-818.
District Court of Appeal of Florida, Fifth District.
June 10, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555361/ | 36 So.3d 96 (2010)
JACKSON
v.
STATE.
No. 2D10-2515.
District Court of Appeal of Florida, Second District.
June 1, 2010.
Decision Without Published Opinion Appeal dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555367/ | 775 F.Supp. 1215 (1991)
ZUREK EXPRESS, INC., Plaintiff,
v.
INTERMETRO INDUSTRIES CORPORATION, Defendant.
No. Civ. 3-90-613.
United States District Court, D. Minnesota, Third Division.
October 29, 1991.
Thomas E. Wolff and Dawn M. Parsons, Snelling, Christensen & Briant, Edina, Minn., for plaintiff.
Brent W. Primus, Minneapolis, Minn., and William Augello, Augello, Pezold & Hirschmann, Huntington, N.Y., for defendant.
MEMORANDUM OPINION AND ORDER
DEVITT, District Judge.
Introduction
Plaintiff Zurek Express, Inc. (Zurek) commenced this action against defendant Intermetro Industries Corp. (Intermetro) to recover $130,771.02 in freight undercharges it alleges are owed by Intermetro. The *1216 cause is before the court upon motions of both parties. Intermetro moves the court to refer this matter to the Interstate Commerce Commission (ICC) for a determination of the reasonableness of the filed or tariff rates which Zurek seeks to impose upon Intermetro and stay all proceedings pending ICC review. Zurek moves the court to enter summary judgment in its favor. For the reasons set forth below, the court will grant Intermetro's motion to refer this matter to the ICC for a determination of the reasonableness of the tariff rates sought to be charged by Zurek. The court will deny Zurek's summary judgment motion.
Background
Intermetro manufactures materials handling equipment, shelving, racks, and related products. Zurek is a motor common carrier and provided transportation services to Intermetro from approximately June, 1987 until June, 1990. All tolled, this action concerns some 768 shipments of goods transported for Intermetro by Zurek.
At the time the parties began negotiating upon terms of a shipment agreement, Zurek participated in the Middlewest Motor Freight Tariff Bureau MWB 550 (Bureau) class rates. Zurek and Intermetro agreed that Intermetro would receive a thirty five percent discount from the Bureau rates.[1] It was Zurek's practice to offer other shippers a similar discount. Consistent with Intermetro's request, Zurek charged Intermetro the Bureau rate for each shipment. At the end of each month, Zurek tallied the amount charged to Intermetro for freight shipments and issued Intermetro a check for thirty five percent of the total amount charged[2].
After agreeing upon terms of shipment, Zurek provided Intermetro with copies of a tariff page embodying the terms of the discount provision. Zurek was to have filed a copy of the tariff page with the ICC but failed to do so.
Discussion
The court first addresses Intermetro's motion to refer this action to the ICC for a determination of the reasonableness of the tariff rates which Zurek contends apply here. In defense of this action, Intermetro alleges the tariff rates are unreasonable. Intermetro argues that the ICC has primary jurisdiction to determine the reasonableness of a carrier's rates and, relying upon several decisions from this district, asserts that referral to the ICC is necessary here. Zurek responds that Intermetro's allegations of rate unreasonableness are not a defense in a freight undercharge action and that Intermetro has failed to put forth any evidence tending to show the filed rates are unreasonable. Zurek attempts to distinguish the parochial cases relied upon by Intermetro.
The court may readily dispose of Zurek's contention that allegations of rate unreasonableness do not constitute a defense to a freight undercharge action. In Sharm Express, Inc. v. 7/24 Freight Sales, Inc., 122 B.R. 999, 1004 (D.Minn.1991), Judge MacLaughlin ruled that rate unreasonableness may be raised as a defense in a freight undercharge collection action. Judge MacLaughlin's opinion is thorough and well-reasoned, and the court follows it. See also Sharm Express, Inc. v. Twin Modal, Inc., No. 4-91-CV-32, slip op. at 5, 1991 WL 156573 (D.Minn. August 7, 1991) (Rosenbaum, J.); Certified Carriers of America, Inc. v. Norwesco, Inc., No. 4-90-CV-156, slip op. at 8-10, 1990 WL 284504 (D.Minn. December 11, 1990) (Doty, J.).
The court next considers whether reference of this action to the ICC under the doctrine of primary jurisdiction is appropriate. Primary jurisdiction "is a common law doctrine used to coordinate administrative and judicial decisionmaking." Red Lake Band of Chippewa Indians v. Barlow, 846 F.2d 474, 476 (8th Cir.1988). The doctrine should be invoked when "the reasons for the existence of the doctrine are present and ... the purposes it serves will be aided by its application in the particular litigation." United States v. McDonnell Douglas Corp., 751 F.2d 220, 224 (8th Cir.1984) (quoting United States v. Western *1217 Pacific Railroad Co., 352 U.S. 59, 64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956)). In particular, the court should invoke the doctrine of primary jurisdiction if the expertise of the agency would contribute meaningfully toward securing uniform and consistent regulation of business. Western Pacific Railroad, 352 U.S. at 64-65, 77 S.Ct. at 165-166 (quoting Far East Conference v. United States, 342 U.S. 570, 574-75, 72 S.Ct. 492, 494-95, 96 L.Ed. 576).
With respect to the specific issue of motor carrier tariff reasonableness, our Eighth Circuit Court of Appeals has intimated that referral to the ICC is entirely appropriate. See Inman Freight Systems, Inc. v. Olin Corp., 807 F.2d 117, 119 (8th Cir.1986). Three recent decisions within the District of Minnesota also shed light upon this issue and hold uniformly that the focal point of the inquiry is whether the party challenging reasonableness has presented sufficient evidence of rate unreasonableness to warrant referral. In 7/24 Freight, supra, the defendant's sole evidence of rate unreasonableness was that the tariffs sought to be charged by the plaintiff exceeded the rates charged by other carriers by fifty percent. Id., 122 B.R. at 1005. Judge MacLaughlin held:
the technical question of whether plaintiff has introduced sufficient evidence of unreasonableness is a matter left to the expertise of the ICC, at least in the first instance, and the Court will not preclude defendant from raising the defense before the ICC based on the state of its proof at this point.
Id. at 1005. Evidently, Judge MacLaughlin based his decision, in part, upon the fact that plaintiff had not enjoyed the opportunity to conduct discovery on the issue of rate reasonableness. Id. at 1004-05. In a subsequent decision, Sharm Express, Inc. v. LaSalle-Deitch Co., Inc., 127 B.R. 620 (D.Minn.1991), Judge Murphy held that a shipper who (1) does not allege rate unreasonableness during an initial referral to the ICC and (2) fails entirely to present evidence to support an allegation of rate unreasonableness other than to argue the challenged rate is "unreasonable on its face," is not entitled to ICC referral. Id. at 622-24. In Judge Murphy's view:
Allowing [defendant] to resist withdrawal of reference from the ICC by a mere incantation of the doctrine of primary jurisdiction would be tantamount to allowing the doctrine to become "an abstraction to be called into operation at the whim of the pleader." Western Pacific, supra, 352 U.S. at 69, 77 S.Ct. at 168.
Id. 127 B.R. at 624. Finally, in Twin Modal, supra, Judge Rosenbaum declared that affidavit testimony tending to show a significant disparity between the tariff rates sought to be charged and the rates charged by other carriers is sufficient to justify referral to the ICC. Id. at 6; see also Canny Trucking, Inc. v. Anitec Image Corp., 89-CV-1115, 1991 WL 117793 (N.D.N.Y. June 24, 1991) (where evidence presented more than "bald conclusory assertions" of rate unreasonableness, referral to ICC appropriate).
Here, Intermetro submits the affidavit testimony of Bruce D. Hocum (Hocum), an expert in the field of motor carrier rates. In his affidavit, Hocum concludes the tariff rate sought to be applied by Zurek is unreasonable. Hocum reaches this conclusion by comparing the rates originally negotiated between Zurek and Intermetro with the tariff rates Intermetro seeks to have applied here. Hocum also examined the rates which Zurek charged other shippers similarly situated to Intermetro. This case is thus similar to 7/24 Freight and Twin Modal and distinguishable from Sharm Express as Intermetro has presented probative evidence of rate unreasonableness. The court will, therefore, refer this matter to the ICC for a determination of whether the Bureau rates Zurek seeks to apply are reasonable.
ORDER
Based upon the foregoing, and all the files and arguments of counsel, IT IS ORDERED that:
1. Plaintiff Zurek Express, Inc.'s motion for summary judgment is DENIED;
*1218 2. This matter is referred to the Interstate Commerce Commission for a determination of the rate reasonableness issue;
3. All proceedings in this action before this court are stayed pending resolution of the issues which have been referred to the Interstate Commerce Commission.
NOTES
[1] The discount was increased to forty five percent in April, 1989.
[2] The parties referred to this as a "loading allowance." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555375/ | 36 So.3d 209 (2010)
STATE of Louisiana
v.
Richard HAMILTON.
No. 2009-KK-2205.
Supreme Court of Louisiana.
May 11, 2010.
*210 James D. Caldwell, Atty. Gen., Leon A. Cannizzaro, Jr., Dist. Atty., Nisha Sandhu, Asst. Dist. Atty., for Applicant.
David Belfield, III, New Orleans, for Respondent.
*211 CIACCIO, J.[*]
We granted certiorari to determine whether evidence abandoned by defendant during his encounter with Orleans Parish Police Officers Thomas Clark and Alex Brady was the result of an unconstitutional seizure. For the reasons discussed herein, we conclude that the officers' encounter with the defendant was voluntary, and Officer Brady's instruction for the defendant to remove his hands from his pockets did not give rise to a seizure of the defendant. Therefore, we find the evidence was lawfully seized and can be used against defendant in prosecution.
FACTS AND PROCEDURAL HISTORY
On Thursday, January 17, 2008, Officers Alex Brady and Thomas Clark were monitoring the area around 2013 South Claiborne Avenue in New Orleans, due to a recent spike in batteries and robberies against Hispanic male immigrants in the area. While in their vehicle, the officers observed defendant, Richard Hamilton, walking back and forth in front of the Discount City Convenience Store. At one point, defendant paused and peered into the establishment without entering. The officers decided they wished to speak with defendant to "find out what his intentions were." According to the testimony of Officer Clark, the officers called the subject over from their vehicle, but the defendant continued to walk away. Officer Clark further testified the officers then exited their vehicle, and with no further verbal instruction to do so, defendant stopped, stuck his hands in his pockets, turned around, and began walking toward the officers
Thereafter, as a safety measure, Officer Brady instructed defendant to remove his hands from his pockets as he approached. As the defendant did so, Officer Brady instructed Officer Clark to handcuff the defendant. Officer Clark assumed this meant that Officer Brady saw the defendant drop some contraband. Officer Clark also testified that while he was searching and handcuffing the defendant, he read the defendant his Miranda rights from a card while Officer Brady retrieved a piece of tin foil from the ground, which it was later determined contained heroin. Officer Clark testified he assumed the defendant dropped the foil as he removed his hands from his pockets, but he did not personally observe this.
During a search incident to the arrest, the officers found $1,600 in cash in defendant's socks but no more drugs. Officer Clark testified he did not get a statement from the defendant and was not privy to any statement taken from the defendant.
Defendant was charged by Bill of Information on March 19, 2008, with one count of possession of heroin with the intent to distribute. After a number of status hearings, on May, 21, 2009, the court conducted a hearing on defendant's Motion to Suppress the heroin and his statements as the result of an unlawful seizure. Only Officer Clark was available to testify at the hearing, and the state requested the motion be kept open for Officer Brady's testimony, but the District Court found it unnecessary and granted the defendant's motion stating, "Court finds no probable cause; motion to suppress evidence granted; motion to suppress statement is granted also." The state then gave notice of its intent to seek writs.
*212 The Louisiana Fourth Circuit Court of Appeal denied the writ with lengthy reasons, stating that defendant was seized for the purposes of the Fourth Amendment when he was ordered to take his hands out of his pockets and he obeyed, rendering the recovered heroin unconstitutionally seized. The state then filed a writ application with this court, and the writ was granted on January 8, 2010. State v. Hamilton, 09-2205 (La.1/8/10), 24 So.3d 855.
DISCUSSION
The Fourth Amendment to the U.S. Constitution protects citizens against unreasonable searches and seizures. Similarly, La. Const. Art. 1, Sect. 5 provides in part, "Every person shall be secure in his person, property, communications, houses, papers, and effects against unreasonable searches, seizures, or invasions of privacy."
In order to discourage police misconduct, any evidence recovered as a result of an unconstitutional search or seizure is inadmissible. State v. Dobard, 01-2629 (La.6/21/02), 824 So.2d 1127, 1130. Therefore, "property abandoned by an individual and recovered by the police as a direct result of an unconstitutional seizure may not be used in a subsequent prosecution." State v. Tucker, 626 So.2d 707, 710 (La.1993). However, if evidence or property is abandoned prior to any unlawful intrusion on a citizen's right to be free from governmental interference, then the property can be lawfully seized and used in prosecution. Id. Further, "it is only when the citizen is actually stopped without reasonable cause or when a stop without reasonable cause is imminent that the right to be left alone is violated, thereby rendering unlawful any resultant seizure of abandoned property." Id. at 710-711 (quoting State v. Belton, 441 So.2d 1195 (La.1983)).
In State v. Fisher, this court recognized a useful three-tiered analysis of interactions between citizens and the police from United States v. Watson, 953 F.2d 895, 897 n. 1 (5th Cir.1992). In the first tier, there is no seizure or Fourth Amendment concern during mere communication with police officers and citizens where there is no coercion or detention. State v. Fisher, 97-1133 (La.9/9/98), 720 So.2d 1179, 1183. The second tier consists of brief seizures of a person, under Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968), if the officer has an objectively reasonable suspicion, supported by specific and articulable facts, that the person is, or is about to be, engaged in criminal activity. Fisher, 720 So.2d at 1183. The third tier is custodial arrest where an officer needs probable cause to believe that the person has committed a crime. Id.
Within the first tier, officers have "the right to engage anyone in conversation, even without reasonable grounds to believe that they have committed a crime." Dobard, 824 So.2d at 1130 (quoting State v. Johnson, 01-2436, p. 3 (La.1/25/02), 806 So.2d 647, 648). Further, the police do not need probable cause to arrest or reasonable suspicion to detain an individual each time they approach a citizen. Dobard, 824 So.2d at 1130. As long as the person approached by the officers remains free to disregard the encounter and walk away, there are no constitutional implications. Id. In State v. Dobard, this court stated, "It is settled that `law enforcement officers' do not violate the Fourth Amendment by merely approaching an individual on the street or in another public place, by asking him if he is willing to answer some questions, by putting questions to him if the person is willing to listen ...." 01-2629, p. 8 (La.6/21/02), 824 So.2d 1127, 1132 (quoting *213 Florida v. Royer, 460 U.S. 491, 498, 103 S.Ct. 1319, 1324, 75 L.Ed.2d 229 (1983)).
In adopting the U.S. Supreme Court's pronouncement in California v. Hodari D., 499 U.S. 621, 111 S.Ct. 1547, 113 L.Ed.2d 690 (1991), this court held in Tucker that an individual has been actually stopped or seized, for constitutional purposes, when he submits to a show of police authority or when he is physically contacted by the police. Tucker, 626 So.2d at 712. Further, in State v. Fisher this court stated, "A prime characteristic of any Fourth Amendment seizure of a person is whether, under the totality of the circumstances, a reasonable person would not consider himself or herself free to leave." 720 So.2d at 1183 (quoting State v. Allen, 95-1754 (La.9/5/96), 682 So.2d 713, 719).
The relevant inquiry in this case is whether and at what point the defendant was seized for constitutional purposes. It is necessary to determine when and if defendant sufficiently submitted to an official show of police authority such that he was seized under the Fourth Amendment. Under the first tier of interaction from Fisher, the officers had every right to approach the defendant and pose some questions to him if he was willing to listen. According to Officer Clark's uncontradicted testimony, the officers in this case simply called over to defendant, at which point defendant continued to walk away. Defendant obviously believed himself free to walk away, as even after being spoken to by the officers he continued on his way. Defendant's decision to ignore the officers and continue to walk away was well within his rights[1] as the police had asserted no authority over him. Thereafter, however, by his own decision and with no compulsion from the officers to do so, defendant stopped and turned around and began to approach the officers with his hands in his pockets.
At this point, out of concern for the officers' safety, Officer Brady instructed the defendant to take his hands out of his pockets as he approached. The Court of Appeal, in its writ denial, reasoned that this instruction from Officer Brady for the defendant to remove his hands from his pockets constituted a sufficient showing of authority from the officers, to which defendant submitted by obeying and removing his hands from his pockets. The Court of Appeal reasoned this brought the encounter into the second tier of police interaction requiring reasonable suspicion. We disagree. When the defendant was voluntarily walking toward the officers with his hands in his pockets, it created a concern for the officers' safety. The request for the defendant to remove his hands from his pockets was not coupled with any search, pat down, or intrusion into the privacy of the defendant. It was merely a reasonable, self-protective safety precaution for the officers in case the defendant who was approaching them had some sort of concealed weapon, as there had been a recent wave of violent crimes in the area. Cf. State v. Boyer, 07-0476, p. 21 (La.10/16/07), 967 So.2d 458, 471("Officer Guillot[ ] was trained for the purpose of officer safety, to order persons in these situations to remove their hands from their pockets .... the defendant's hand was not visible and a reasonably prudent person would be warranted in believing that his safety or that of others was in danger.")
As the defendant removed his hands, Officer Brady told Officer Clark to place *214 the defendant in handcuffs. Officer Clark testified that Officer Brady observed the defendant drop contraband as he was removing his hands from his pocket. While Officer Clark detained the defendant, Officer Brady retrieved the packet of foil, which was later determined to contain heroin. As the encounter was still voluntary under the first tier of police interaction and as the police officers were reasonable in requesting the defendant to remove his hands from his pockets as a safety measure, the contraband was abandoned prior to any unlawful intrusion into the defendant's right of freedom from governmental interference. As such, it was subject to lawful seizure.[2]
Similarly, in State v. Jackson, this court held recovered cocaine was legally seized after the defendant discarded his cocaine packet, even after police officers positioned themselves to stop him, approached the defendant, and identified themselves as police officers, because he discarded the cocaine before the officers acted to effectuate their subjective intent to stop him. 00-3083, p. 4 (La.3/15/02), 824 So.2d 1124, 1126-27. The court stated, "by merely identifying themselves as the police, before they asked respondent any questions, drew their weapons, or otherwise asserted their official authority over him, the officers had not yet `seized' the respondent." Id. at 1126. Also, in State v. Johnson, this court held no stop or seizure occurred and evidence was legally seized where officers parked their police car four to five feet from the defendant, at which time defendant threw down a bag later determined to be heroin. 01-2436 (La.1/25/02), 806 So.2d 647. The court in Johnson stated the officers "had not yet indicated by word or action that an actual stop, i.e., a forcible detention, or seizure of the person was about to take place." Id. at 648. Also, in State v. Britton, 633 So.2d 1208, 1209 (La. 1994), this court held the seizure of cocaine constitutional, after police followed the defendant into a gas station and were no more than one or two feet from defendant when he discarded the cocaine on a store shelf, reasoning that the officers "did not forcibly detain him, or make a show of their authority signalling [sic] that some form of official detention was imminent, until after he discarded the packet of cocaine."
In the present case, defendant was approaching the officers voluntarily with his hands in his pocket, and discarded the cocaine before the police showed any intent to seize him. After the defendant exercised his right to ignore the police officers, he voluntarily changed his mind and began walking toward the officers with concealed hands. The only intent communicated was for the defendant to take his hands out of his pockets out of concern for the officers' safety in having an individual approaching them with concealed hands. The instruction did not indicate any intent to detain, search, or seize the defendant. Thus, the instruction did not constitute an actual stop or seizure, making the subsequently abandoned contraband lawfully subject to police seizure.
In sum, defendant's encounter with the two officers was voluntary and did not intrude into his privacy. Their instruction to remove his hands from his pockets was based on concerns for officer safety and did not communicate an intent to stop, seize, or search the defendant. Prior to his abandoning the foil, the defendant was neither seized nor stopped, a fact that *215 made the package legally recoverable by the officers.
For the above reasons, we find the trial court erred in granting the defendant's Motion to Suppress the heroin and the statements made after the arrest. The ruling of the trial court is hereby reversed.
REVERSED.
JOHNSON, J., dissents and assigns reasons.
JOHNSON, Justice dissenting.
The trial court is afforded great discretion in ruling on a motion to suppress, and its ruling will not be disturbed absent an abuse of that discretion. State v. Lee, 05-2098 (La.1/16/08), 976 So.2d 109, 122. For the reasons articulated by the court of appeal in its writ denial, I find no error in the trial court's ruling on the motion to suppress.
NOTES
[*] Retired Judge Philip C. Ciaccio, assigned as Justice ad hoc, sitting for Chief Justice Catherine D. Kimball.
[1] Absent a showing of police authority, "the individual `need not answer any question put to him; indeed, he may decline to listen to the questions at all and may go on his way.'" State v. Lewis, 00-3136, p. 4 (La.4/26/02), 815 So.2d 818, 820-821 (quoting Florida v. Royer, 460 U.S. 491, 498, 103 S.Ct. 1319, 1324, 75 L.Ed.2d 229 (1983)).
[2] See State v. Andrishok, 434 So.2d 389, 391 (La.1983). ("[Evidence discarded or abandoned] without any prior unlawful intrusion into a citizen's right of freedom from governmental interference ... may be lawfully seized.") | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555387/ | 775 F.Supp. 1492 (1991)
FLORAL TRADE COUNCIL OF DAVIS, CALIFORNIA, Plaintiff,
v.
UNITED STATES, Defendant,
and
Asociacion Colombiana De Exportadores De Flores, et al., Defendants-Intervenors.
Consol. Court No. 90-06-00290.
United States Court of International Trade.
September 27, 1991.
*1493 *1494 *1495 Stewart & Stewart, Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr. and Jimmie V. Reyna, Washington, D.C., for plaintiff.
Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Jeanne E. Davidson, (Andrea Fekkes Dynes, Office of Chief Counsel for Intern. Trade Admin., U.S. Dept. of Commerce, Washington, D.C., of counsel), for defendant.
Arnold & Porter, Lawrence A. Schneider, Michael T. Shor and Susan G. Lee, Akin, Gump, Strauss, Hauer & Feld, Patrick F.J. Macrory, Spencer S. Griffith, Washington, D.C., for defendants-intervenors.
OPINION
RESTANI, Judge:
In this case, domestic and foreign producers of fresh cut flowers challenge the final results of the second antidumping duty review by the International Trade Administration ("ITA") in Certain Fresh Cut Flowers From Colombia, 55 Fed.Reg. 20491 (1990).[1] The review covered 218 producers and exporters of flowers (standard carnations, miniature (spray) carnations, standard chrysanthemums, and pompon chrysanthemums) from Colombia to the United States, and the period March 1, 1988 through February 28, 1989.
The case is before the court on motions for judgment upon the agency record brought by plaintiff, Floral Trade Council of Davis, California ("FTC"), and the intervenors, Asociacion Colombiana de Exportadores de Flores, its individual members, and 201 individual growers and exporters ("Asocolflores"). The government seeks a remand to correct four specific errors.
The court will address plaintiff's claims first, then turn to claims raised by the intervenors and the government.
STANDARD OF REVIEW
ITA's decision will be upheld unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1988).[2] In addition, ITA's interpretation of the statute it administers must be reasonable and must not conflict with Congressional intent. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984); Four "H" Corp. v. United States, 9 CIT 271, 272, 611 F.Supp. 981, 983 (1985).
DISCUSSION
I. FTC CHALLENGES
A. Constructed Value as Basis for Foreign Market Value.
FTC argues that ITA erred in using constructed value ("CV") as the basis for foreign market value ("FMV") because the *1496 statute, regulations and agency practice express a preference for third country prices. According to FTC, adequate third country price information was available, and ITA's decision to reject it was unsupported by the record.
1. Statutory Scheme.
In the preliminary determination, ITA used home market or third country prices as the basis of FMV, and CV when home market or third country prices were not available. Certain Fresh Cut Flowers from Colombia Preliminary Results of Antidumping Duty Administrative Review, 55 Fed.Reg. 456, 457 (1990). In the final determination, ITA rejected home market and third country sales in favor of CV. ITA's decision was based on findings that home market sales were inadequate, and due to an "unusual set of facts" third country prices would not provide an accurate measure of dumping. 55 Fed.Reg. at XXXXX-XXX.
Section 773 of the Tariff Act of 1930, as amended, sets forth three methods for determining FMV: home market sales; third country sales; and constructed value. See 19 U.S.C. § 1677b(a)(1) (2).[3] The statute provides that if home market sales are inadequate, FMV may be determined based on CV, notwithstanding third country sales. 19 U.S.C. § 1677b(a)(2).[4] Although the statute places third country prices and CV on a nearly equal footing, the regulations express a clear preference for third country prices. See 19 C.F.R. § 353.48(b)[5] ("[t]he Secretary normally will prefer foreign market value based on sales to a third country rather than on constructed value") (emphasis added). Nonetheless, ITA interpreted the statute and regulation as giving it discretion to disregard third country sales in favor of CV under "extraordinary circumstances." 55 Fed.Reg. at 20492.
ITA's interpretation was reasonable: third country prices may be abandoned if there is an adequate factual basis in the record for doing so. The statute and regulations cited above, and pertinent case law *1497 all support this conclusion. See Smith-Corona Group v. United States, 713 F.2d 1568, 1576 n. 20 (Fed.Cir.1983) (CV may be used without regard to availability of third country prices); Asociacion Colombiana de Exportadores de Flores v. United States, 13 CIT ___, 704 F.Supp. 1114, 1124 (1989) ("Asocolflores") (though statute favors actual prices, ITA not required to find third country prices completely unusable before turning to CV). The next issue is whether substantial evidence in the record supports ITA's decision to reject third country prices.
2. Substantial Evidence.
ITA gave three reasons for rejecting third country sales: (i) United States and European price and volume movements were not "positively correlated"; (ii) third country sales occurred only in peak months, making it difficult to find contemporaneous sales; and (iii) the perishability of fresh cut flowers leads to price differences that are unrelated to dumping. 55 Fed.Reg. at XXXXX-XXX. Because of these factors, ITA concluded third country prices would not provide an accurate measure of dumping. 55 Fed.Reg. at 20943.
(i) Lack of correlation between United States and European Markets.
ITA identified several distinctions between United States and European markets which lead to price differences that can "either mask dumping in some instances or exaggerate" it in others. 55 Fed.Reg. at 20492. According to ITA, the United States market is characterized by "extreme price volatility" and pronounced peaks and lulls; in contrast, the European market is mature and demand is consistent throughout the year. Id. Europe supplies most of its own flowers, and during peak production periods Colombian flowers cannot be sold there easily. European prices are primarily determined by the auction houses. Because producers must guarantee a certain volume to sell there, Colombian producers are usually prevented from participating. Finally, ITA noted that United States and European holidays often do not coincide, resulting in different peak periods.[6] 55 Fed.Reg. at 20492-20493. Although ITA used an extended one year period of investigation because of the cyclical nature of the flower market, it found that European and United States cycles did not coincide.
Given the presence of different price and demand patterns in United States and European markets, ITA correctly concluded that price differences might be the result of factors other than price discrimination. In light of market differences, reliance on third country prices likely would have produced misleading results. ITA's reasoning on this point was sound. In addition, its findings were supported by substantial evidence. Although citations to the record were not given, it appears that ITA relied heavily on three economic reports submitted by Asocolflores.[7] These reports provide ample support for ITA's findings.
*1498 (ii) Third Country Sales Not Made over Entire Year.
ITA also found that third country sales were made only in peak months, not over the entire year, making a fair comparison with United States sales difficult. 55 Fed. Reg. at 20493. ITA reasonably relied on this factor because a comparison of peak foreign and nonpeak United States prices likely would lead to inaccurate results, that is, unreasonably high margins. ITA's finding was supported by questionnaire responses, which indicated that most companies did not have sales to the European market in all months.
(iii) Perishability Factor.
On the supply side, ITA found that flowers are highly perishable, and subject to natural and economic forces unlike those facing nonperishable products. ITA noted that these difficulties are compounded because Colombian producers plan production for the United States market: in the event of excess production, producers might have to sell in unanticipated markets where they are vulnerable to market differences. Here again, ITA's consideration of this factor was reasonable, and its findings concerning product characteristics and Colombian export patterns are supported by substantial evidence in the record.
At oral argument, FTC asserted ITA should have adopted a "company-specific" approach, and used third country price data, for the companies and during the months such data was available, and constructed value in other cases, as it did in some instances during the investigative phase. FTC, however, failed to provide the court with specific data to indicate for which companies and time periods third country price information was available, and should have been used. In any event, even if FTC had supplied this information, utilization of third country prices would not account for different demand and pricing patterns in the United States and Europe.
B. Calculation of Average Constructed Value for Companies that Did not Submit Cost Data.
FTC argues ITA erred in using average CV for companies that did not submit adequate cost data.[8] ITA reviewed information for fifty producers. It did not request cost data, but thirty-nine producers voluntarily submitted cost as well as price information. Eleven producers did not provide complete cost information. Relying on best information available, ITA assigned each firm a weighted-average CV. 55 Fed. Reg. at 20493. ITA must use "best information available" whenever a party "refuses or is unable to produce information requested in a timely manner and in the form required." 19 U.S.C. § 1677e(c) (emphasis added); see also 19 C.F.R. § 353.37(a). Normally, however, ITA may not resort to the best information rule without finding "noncompliance with an information request." Olympic Adhesives, Inc. v. United States, 899 F.2d 1565, 1574 (Fed. Cir.1990). The government concedes that ITA did not request cost data initially, but notes that the decision to abandon third country prices was made late in the proceeding, and cost information was unavailable at that time. While this explains ITA's decision, the government does not offer authority that would justify use of best information in this case in the absence of an information request. Perhaps, in some situations, ITA may rely on averages to fill in incidental data rather than commencing an entirely new investigation. Here, ITA changed its basic methodology. It should have conducted a proper investigation based on its choice of a new methodology. ITA cannot simply average data from producers who volunteer unsolicited *1499 cost information. Such a procedure is highly suspect. Remand on this issue is necessary to permit collection of cost data from the eleven companies discussed.
C. Reliance on Economic Reports.
FTC claims that ITA's decision to rely on CV was premised on two economic reports that were untimely and inadequately documented.
After the preliminary determination, respondents filed two economic reports, the Litan and Botero reports.[9] ITA found the reports "critical to a reasoned decision on the question of the appropriate basis for foreign market value," and retained them on the grounds that "the Department may request new information at anytime under 19 C.F.R. § 353.31(b)(1)." 55 Fed.Reg. at 20495.
ITA may reject factual information submitted after the preliminary determination. See 19 C.F.R. § 353.31(a)(1)(ii); § 353.31(a)(3); § 353.31(b)(2). The regulations also provide that ITA may request additional information at any time during a proceeding. 19 C.F.R. § 353.31(b)(1).[10] Clearly, the regulations give ITA flexibility to obtain information necessary to its decision; if information it deems "critical" is submitted, albeit without a request, ITA has discretion under the regulations to consider it. Certainly, ITA abuses its discretion if it arbitrarily accepts information which is not truly critical. FTC has not shown such abuse. Moreover, FTC cannot claim prejudice because it was given a special opportunity to submit information in rebuttal, which it did.[11] 55 Fed.Reg. at 20945. In addition, FTC has not demonstrated that it has any truly contradictory data. This entire issue appears to rest on speculation.
FTC also claims the studies lacked supporting data. ITA acknowledged that "the reports do not indicate the sources of all of the information they rely upon," but found the reports "sufficiently well documented and explained to warrant serious consideration." 55 Fed.Reg. at 20494. ITA was correct. Certainly, each proposition in the reports is not substantiated; however, the general trends are documented and supported by evidence in the record so that the reports are worthy of consideration.
II.
ASOCOLFLORES CHALLENGES
A. Monthly Average United States Price.
Asocolflores argues ITA should have used annual rather than monthly United States prices ("USP"). Specifically, Asocolflores claims the fresh cut flower market is characterized by annual demand, and due to perishability of the product, growers are forced to make below-cost sales in certain months. According to Asocolflores, these below-cost sales are economically necessary, and cannot be characterized as dumping; monthly averaging makes no allowance for these sales, and, in essence, measures "technical dumping." Asocolflores also argues that monthly averaging produces unrepresentative prices, is inconsistent with ITA's findings in this and other *1500 cases concerning the flower industry, and is unsupported by the record.
ITA has authority to select averages, as long as the averages are "representative of the transactions under investigation." 19 U.S.C. § 1677f-1(b); see 19 C.F.R. § 353.59(b)(1).[12] Indeed, this court has stated that ITA must select a methodology to account for industry characteristics so that price data is "representative of reality." See Floral Trade Council of Davis, California v. United States, 12 CIT 1163, 1168, 704 F.Supp. 233, 239 (1988) (ITA must adopt averaging or another methodology to account for flower perishability). Absent specific evidence that the averaging method resulted in margins that were unrepresentative, ITA's decision will be upheld. See id. at 1170, 704 F.Supp. at 239.
In this case, ITA used monthly averaging to account for perishability; it rejected annual averaging based on a finding that annual averaging would mask dumping by allowing high prices in peak months to offset low prices in other months. 55 Fed.Reg. at 20494 (Response to Comment 2). This court agrees that monthly averaging adequately compensates for the perishability factor,[13] but averaging over too long a period likely will obscure dumping. See Floral Trade Council, 12 CIT at 1169-1170, 704 F.Supp. at 239-240 (monthly averaged USP upheld against claims that longer period should be used); see Asocolflores, 13 CIT at ___, 704 F.Supp. at 1116 (monthly averaged USP upheld).
The record in this case reveals the tension found in previous cases involving this product between prejudice to producers if prices are not averaged and potential for masking dumping if prices are averaged over too long a period. Asocolflores wants ITA to adjust for the life cycle of flowers; that is, plants grow even in off-peak sales periods. It states that this may be viewed as another perishability factor. As indicated, selecting an averaging period is difficult. No period accounts for the legitimate concerns of all parties. Monthly averaging is one acceptable compromise. ITA averaged over what it considered the shortest period possible to ensure that dumping was not obscured entirely, and at the same time, to account for as many perishability factors as possible.
Asocolflores' argument concerning technical dumping was addressed in a previous case. There, this court determined that the peculiarities of the flower industry do not justify an overall negative determination. See Asocolflores, 13 CIT at ___, 704 F.Supp. at 1120. In any event, it is for the International Trade Commission to determine if imports sold at less than fair value ("LTFV") cause injury, or if LTFV sales are merely the result of meeting prevailing domestic industry prices and are not injurious.[14] While ITA is free to adjust its *1501 methodology to measure dumping margins as precisely as possible, it cannot abandon statutory and regulatory procedures because it believes foreign producers' actions are dictated by the domestic market.
Asocolflores also argues that the combination of monthly averages for USP and CV for FMV has the ultimate result of guaranteeing affirmative dumping margins for any month in which producers do not make an eight percent profit.[15] This may be the effect of ITA's choices concerning USP and FMV, but it is the effect of the application of the statute and regulations at various stages. Why producers should be protected if their annual profit is eight percent, as would seem to be the result of Asocolflores' proposed method, has not been explained.
Use of CV and necessary averaging may yield unsought results. Congress authorized the use of CV and averaging not because they are desirable methods, but because certain situations necessitate their use. While foreign producers may have received a higher than theoretically desirable rate partially based on the economic necessity of below-cost sales in certain months, it seems equally likely that the rate is somewhat lower than theoretically desirable because of the use of constructed FMV, rather than actual prices. As with the use of best information available, the collateral effects of these methodologies are not always desired. Use of actual prices and sale-by-sale USP data is the ideal situation. These choices are not suitable for this industry, and Asocolflores does not argue for their use.
The court views ITA's overall methodology as acceptable, both in terms of literal adherence to the law and in terms of equity and fairness. None of the parties have offered a better approach and the court has not thought of one. While there is no guarantee that the results are exactly what they should be, they seem to be as fair as possible given the difficulties presented by the perishable commodity at issue.
B. Calculation of Sample Group Rate and All Other Rate.
Asocolflores raises several arguments with respect to calculation of the "sample group" and "all other" rates. The government contends these arguments were not raised before ITA. As an initial matter, therefore, the court must determine which arguments were presented to ITA because, absent exceptional circumstances, an administrative determination will not be set aside upon a ground not presented to the agency. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed.Cir. 1990).
ITA has authority to use "representative" samples. 19 U.S.C. § 1677f-1(b). This review covered 218 firms. Thirty-five firms requested a review of themselves ("self-requesting firms"), and petitioner requested a review of the remaining 183 firms. Thirty-three of the 183 firms had no exports, leaving 150 firms ("sample universe") subject to review. From the 150 firms, ITA selected fifteen firms at random, eleven small and four medium or large, and calculated margins for each group. Then, the margins of the two groups were weight-averaged using the export shares of each group to arrive at the overall weighted average margin, or the "sample group" rate. This sample group rate, 4.16 percent, was applied to 135 firms in the sample universe; the fifteen sampled firms received their own individual rates.
ITA applied an "all other" rate of 2.42 percent to the thirty-three firms that had no exports during the review period. This "all other" rate represents the simple average of the weighted-average rates for the (1) sample group; and (2) self-requesting group. 55 Fed.Reg. at 20493.
Asocolflores raises three arguments. First, Asocolflores claims ITA gave undue weight to margins for small firms because in calculating the sample rate, ITA weight-averaged margins for the sampled companies *1502 by the total volume of exports of all companies within the sample universe, rather than only the sampled companies. Asocolflores contends it raised this issue before ITA; however, it does not appear from the document to which Asocolflores refers the court that the argument made here was also made at the administrative level. See 1 Pub.Rec. 169. At best, the document is ambiguous as to the argument raised, and cannot be said to put ITA on notice as to the problem.
Asocolflores' second argument, concerning exclusion of the self-requesting companies, was clearly raised before ITA. 3 Pub.Rec. 182 at 70. At oral argument, Asocolflores conceded that it did not raise its third argument concerning calculation of the "all other" rate, but claims it had no opportunity to do so. This is incorrect since the summary calculation work sheets prepared for the preliminary results clearly indicate that the "all other" rate was based on a simple average. Supp.Pub./Prop.Doc. 75. As a result, the court will not consider Asocolflores' argument concerning the "all other" rate. Out of an abundance of caution, the first ambiguously-raised argument will be addressed, as well as the second argument, which was clearly raised.
Asocolflores' first argument is that the sample group rate is skewed unfairly towards margins determined for small firms, which had higher margins than the medium and large firms. Small firms accounted for approximately forty-six percent of exports for the sample universe; medium and large firms accounted for fifty-four percent. In arriving at the margin for each group, ITA weight-averaged each group's margin by the percentage representing its share of exports for the sample universe. Asocolflores argues that ITA should have weight-averaged each groups' margin based on a percentage representing its share of the sampled companies' exports.[16] As the government correctly points out, the purpose of the sample was to obtain a representative rate for all firms in the sample universe; therefore, the only relevant percentage was each group's relation to the sample universe.
Asocolflores' second argument that the sample group rate is not representative because ITA did not include the self-requesting firms in its calculations fails for a similar reason. The purpose of sampling was to determine a rate only for the 150 firms in the sample universe; the self-requesting companies were not part of the sample universe.
C. Double-Counting Credit Expense in Constructed Value.
Asocolflores claims, and the government concedes, that when it calculated CV ITA double-counted credit expense. In calculating FMV, ITA makes adjustments for differences in the circumstances of sale between United States and foreign markets; an adjustment is made for differences in credit terms. See 19 U.S.C. § 1677b(a)(4)(B); 19 C.F.R. §§ 353.-56(a)(1)-(2). In this case, it appears that ITA made an adjustment for credit expense; that is, the cost of financing accounts receivable or extending credit to United States customers.[17]
Interest expense, or the cost to the company of financing its debt, is one of the components of CV. See 19 U.S.C. § 1677b(e)(1)(B) (CV includes amount for general expenses); 19 C.F.R. § 353.50(a)(2) (same); East Chilliwack Fruit Growers Coop. v. United States, 11 CIT 104, 107, 655 F.Supp. 499, 503 (1987) (general expenses include cost of financing). ITA assumes that part of the debt is credit expense the amount used to finance accounts receivable. Because credit expense *1503 has already been accounted for through the circumstance-of-sale adjustment, in calculating CV, ITA routinely deducts from interest expense an amount that represents credit expense. See Roller Chain, Other than Bicycle, From Japan, 55 Fed.Reg. 42602, 42604 (1990) (in CV calculation interest expense reduced by amount related to accounts receivable to allow for credit costs already added to CV); Mechanical Transfer Presses from Japan, 55 Fed.Reg. 335, 337 (1990) (same); 64K Dynamic Random Access Memory Components (64K DRAM's) From Japan, 51 Fed.Reg. 15943, 15949 (1986) (Response to NEC Comment 4) (same). Without such an adjustment, credit expenses would be double-counted in CV. See 64K DRAMs, 55 Fed.Reg. at 15949.
ITA failed to make the necessary adjustment for credit expense. This error affects five companies: Floral/Bochica, Flores de Serrezuela, La Valvanera, Florandia, and Jardines del Muna. On remand, ITA shall make the necessary adjustments.
D. Street Vendor Sales.
Asocolflores' next argument is that ITA improperly included sales to street vendors in the United States in USP calculations for Floral/Bochica and Inversiones Targa. ITA characterized these sales as "distress" sales, and refused to exclude them, finding that distress sales consist of the same class or kind of merchandise as export quality flowers. 55 Fed.Reg. at 20500 (Response to Comment 66).
As the government correctly points out, if merchandise enters the United States as "export quality," it is included in the calculation of USP because it is within the scope of the investigation: the fact that the merchandise subsequently deteriorates and is sold on the street at a lower price is irrelevant. Averaging already accounts for perishability, and all United States sales both in and out of the ordinary course of trade are included in calculating USP.[18] Here, Asocolflores does not point to any evidence in the record to indicate that flowers sold by street vendors were of inferior quality when they entered the United States. In the absence of such evidence, street vendor sales were properly included.
To be consistent, street vendor sales also should have been included in the calculation of inland freight in Colombia. The denominator used to calculate inland freight was sales volume, excluding street vendor sales. Because street vendor sales were included in USP data, they should also have been included in calculating the inland freight charge. This issue affects Floral/Bochica. ITA will make the necessary adjustment on remand.
E. Exclusion of Certain Revenue Accruing to Dianticola Colombiana.
Both Asocolflores and the government seek a remand to permit ITA to adjust for revenues deposited by Dianticola's consignment agent into a United States bank. The record indicates that Dianticola sells its flowers on consignment to an agent in Miami, who deposits [[*]] percent of gross sales revenue into a United States bank account. See 4 Prop.Rec. at 226-239A. Dianticola included this amount in its "total revenue" for calculation of USP, id., but ITA recalculated USP without regard to this income, finding no proof that revenues were related to sales under consideration. 55 Fed.Reg. at 20498 (Response to Comment 36). Failure to include these revenues in the USP calculation decreased Dianticola's USP, thereby increasing its dumping margin. In fact, Dianticola's questionnaire response indicated that the income represented a percentage of sales revenues from flower sales. See 4 Prop.Rec. at 226-239A. ITA should have *1504 included these revenues in calculating Dianticola's USP; in the alternative, if ITA was unsatisfied with the questionnaire response, in fairness, a deficiency letter should have been issued. On remand, the necessary adjustments shall be made.
F. Calculation of Constructed Value for Flores El Trentino.
Both Asocolflores and the government seek a remand to correct a clerical error concerning calculation of CV for Flores El Trentino. The record indicates that the correct CV for Flores El Trentino was [*] pesos per carnation. 6 Prop.Rec. at 2121A. In calculating the dumping margin, ITA used another figure, 25.5248 pesos. See 7 Prop.Rec. at 1315A. This error is to be corrected on remand.
G. Offsets to Financial Expenses.
Asocolflores claims ITA erred in failing to offset financial expenses of Floral Ltda./Exportaciones Bochica ("Floral"), and La Valvanera ("Valvanera") by exchange rate gains and interest income.
Constructed value includes the cost of producing the particular merchandise under consideration and an amount for general expenses. See 19 U.S.C. § 1677b(e)(1)(A)-(B); 19 C.F.R. § 353.50(a)(1)-(2). In calculating CV in at least one previous case, ITA has adjusted general expenses to account for exchange rate gains and losses. Offshore Platform Jackets and Piles from the Republic of Korea, 51 Fed.Reg. 11795, 11796 (1986). In addition, ITA has allowed interest expenses to be offset by interest income if that income is earned from short-term investments related to current operations of the company. Certain Small Business Telephone Systems and Subassemblies Thereof From Taiwan, 54 Fed.Reg. 42543, 42545 (1989); see Cellular Mobile Telephones and Subassemblies From Japan, 54 Fed.Reg. 48011, 48016 (1989) (Response to Comment 16).
In its questionnaire response, Floral deducts "exchange rate gains and other debt-related income" from interest expense. 5 Prop.Rec. 399A, Annex D-8. Valvanera includes "exchange rate gains and losses" in the general expense component of CV. 5 Prop.Rec. 1630A. The Department's questionnaire specifically requests itemization of all offsets to expenses, and an explanation as to the manner in which offsets relate to production of the subject merchandise. See 1 Pub.Rec. 575.[19] Neither Floral nor Valvanera provided a proper itemization, nor did they explain how offsets were related to flower production. See 5 Prop.Rec. 399A (Floral); 5 Prop.Rec. 1630A, 1712A (Valvanera). It appears that ITA denied the offsets on this basis. 55 Fed.Reg. at 20501 (Response to Comment 71) (Valvanera); see 7 Prop.Rec. 851A (Floral). As the companies failed to comply with clear instructions in the questionnaires, ITA's decision was proper.
Asocolflores protests that ITA should have issued a deficiency letter. Certainly, if the companies made a good faith attempt to respond to ITA's questionnaire and substantially complied with the request, ITA might have an obligation to issue a deficiency letter. Where, however, a company utterly fails to comply with a clear request, no obligation to issue a deficiency letter arises. In light of the unambiguous request and feeble responses, deficiency letters were not required.
H. Normalization of Costs.
1. Florandia Herrera-Camacho.
Asocolflores claims ITA failed to amortize start-up costs for Florandia Herrera-Camacho's pompon crop, and failed to normalize movement charges associated with United States pompon sales. Florandia Herrera-Camacho began growing pompons in 1988. The first two crops were improperly fertilized; the company experienced low yields of export-quality pompons, and many flowers shipped to the United States were destroyed or returned for credit *1505 due to their poor condition. Florandia treated costs associated with these low yields as start-up costs, and amortized them over the production cycle. It also amortized costs associated with movement and selling expenses. ITA denied the adjustments, finding "insufficient historical evidence of normal production and sales to support the claim that this was an abnormal situation." 55 Fed.Reg. at 20493.
ITA did not provide a sufficient basis for rejecting the claimed adjustments. Because these were "start-up" costs, no record of past performance existed. Florandia produced data to show comparative costs for the period March 1989 to September 1989, when its production reached normal levels. Upon remand, ITA should reconsider this issue in light of the comparative data provided by Florandia. The government's argument that these types of costs are not "abnormal" is not reflected in ITA's findings, thus the court declines to consider it.
2. Flores La Valvanera and Flores Dos Hectareas.
Asocolflores also claims ITA should have adjusted constructed values for Flores La Valvanera and Flores Dos Hectareas to account for abnormally low yields due to natural disasters. In La Valvanera's case, the low yield was caused by an "unexpected and extraordinary (sic) extremely hard viral attack which left the plants with yellow foliage." 3 Pub.Rec. 98-99 at 31-32. In Dos Hectareas' case, the low yield was caused by collapse of an irrigation well. 3 Pub.Rec. 394-403.
ITA refused to adjust CV to account for these natural disasters. ITA found that La Valvanera failed to provide information as to what it considers "unusual" damage, or as to its "normal" or "expected" production levels. 55 Fed.Reg. at 20501 (Response to Comment 70). Similarly, ITA found that Dos Hectareas failed to provide sufficient or timely information concerning the existence or magnitude of the problem, and its projected or historical production yield. 55 Fed.Reg. at 20496 (Response to Comment 22).
ITA erred in rejecting the claimed adjustments on the grounds of insufficient information. Both companies provided some information as to the unusual nature of the events; in addition, it appears that both companies provided information concerning expected production. In the event that ITA believed information provided was inadequate, under these circumstances, it should have given notice of the deficiency, and provided an opportunity to supplement the record. The case is remanded on this point to allow the parties to supplement the record, and for further findings.
CONCLUSION
This case is remanded for further consideration in accordance with this opinion with respect to the following issues: calculation of constructed value for companies not submitting cost data; credit expense adjustment; inland freight charges and street vendor sales; exclusion of revenues accruing to Dianticola; constructed value for Flores El Trentino; and normalization of costs to account for low yields and natural disasters. In all other respects, ITA's determination is affirmed.
NOTES
[1] Under United States antidumping law, the International Trade Administration issues antidumping duty orders on imported merchandise that is sold, or likely to be sold, in the United States at less than fair value. Merchandise is sold at less than fair value when, in general terms, the United States price is lower than the price at which merchandise is sold in the home market.
[2] Unless otherwise stated, citations to the United States Code are to the 1988 edition, and citations to the Code of Federal Regulations are to the 1991 volume.
[3] The statute provides, in part:
(1) In general.
The foreign market value of imported merchandise shall be the price....
(A) at which such or similar merchandise is sold or, in the absence of sales, offered for sale in the principal markets of the country from which exported, in the usual commercial quantities and in the ordinary course of trade for home consumption, or
(B) if not so sold or offered for sale for home consumption, or if the administering authority determines that the quantity sold for home consumption is so small in relation to the quantity sold for exportation to countries other than the United States as to form an inadequate basis for comparison, then the price at which so sold or offered for sale for exportation to countries other than the United States....
(2) Use of constructed value.
If the administering authority determines that the foreign market value of imported merchandise cannot be determined under paragraph (1)(A), then, notwithstanding paragraph (1)(B), the foreign market value of the merchandise may be the constructed value of that merchandise ...
19 U.S.C. § 1677b(a)(1)-(2) (emphasis added).
Constructed value is defined, in part, as:
the sum of (A) the cost of materials ... and of fabrication or other processing of any kind employed in producing such or similar merchandise ... (B) an amount for general expenses and profit ... and (C) the cost of all containers and coverings ..., and all other expenses incidental to placing the merchandise under consideration in condition packed ready for shipment to the United States.
19 U.S.C. § 1677b(e)(1).
[4] See supra n. 3.
[5] 19 C.F.R. § 353.48 provides, in part:
§ 353.48 Calculation of foreign market value if sales in the home market country are inadequate.
(a) In general.... [I]f the quantity of such or similar merchandise sold during the period being examined for consumption in the home market country is so small in relation to the quantity sold for exportation to third countries (normally, less than five percent of the amount sold to third countries) that it is an inadequate basis for the foreign market value of the merchandise, the Secretary will calculate the foreign market value of the merchandise under either § 353.49 [third country sales] or § 353.50 [constructed value].
(b) Preference for third country sales. The Secretary normally will prefer foreign market value based on sales to a third country rather than on constructed value if adequate information is available and can be verified, if a verification is conducted, within the time required.
19 C.F.R. § 353.48.
[6] The ITA's findings are set forth below:
In general, the United States market is marked by extreme price volatility due to the sporadic gift-giving nature of U.S. demand and by very pronounced peaks during holidays and equally pronounced lulls during the off season. In Europe, there is a mature market for fresh cut flowers throughout the year that is not subject to the extreme volatility that marks the U.S. market. Europe supplies most of its own flowers, and at periods of peak European production, Colombian flowers cannot easily be sold there. European flower prices are primarily determined by auction houses, such as the Aalsmeer auction in Holland. Auction participants must guarantee the auction houses a certain amount of production each year in order to sell there. The Colombian flower growers cannot assure adequate flower production of the type and color demanded in European markets on a yearly basis and are prevented from participating in the Aalsmeer auction. In addition, European holidays often do not coincide with those [in] ... the United States, resulting in different peak periods in the two markets. Even when holidays do coincide, the limited access of the Colombian growers to the European market does not assure them of obtaining peak prices.
55 Fed.Reg. at XXXXX-XXX.
[7] The reports were: Dr. German Botero, Fresh Cut Flowers-Some Issues on the Estimation of Dumping Margins in the U.S. Market ("Botero"); Sparks Commodities, Inc., Methodological Issues Concerning the Department of Commerce Review of Dumping Margins for Colombian Cut Flowers ("Sparks"); and Dr. Robert E. Litan and ICF Consulting Associates, U.S. and European Prices of Colombian Cut Flowers: A Statistical Analysis ("Litan"). FTC argues that two of the reports (Litan and Botero) were untimely and inadequately documented. These arguments are addressed infra.
[8] FTC also argues that ITA erred in using cost data for the three companies whose price information had been verified. This argument is meritless. When ITA determined that third country prices were inappropriate, price information, whether verified or not, became irrelevant.
[9] See supra n. 8.
[10] 19 C.F.R. § 353.31(b)(1) provides:
Notwithstanding paragraph (a) [time limits for submission of information] of this section, the Secretary may request any person to submit factual information at any time during a proceeding.
19 C.F.R. § 351.31(b)(1).
[11] Respondents submitted the reports on February 28, 1990. On April 3, 1990, five weeks later, ITA informed the parties that it would retain the reports in the record, and gave FTC thirteen days to respond. A.R.Pub.Rec.Doc. 199. At oral argument, FTC claimed that it did not have adequate time to respond to the reports; FTC claims it made this objection before ITA. FTC did not, however, provide citations in its brief or at oral argument to indicate that this objection was raised before ITA. Moreover, a review of the pertinent part of the record does not indicate that FTC either requested additional time, or objected to the time limits imposed on it. See A.R.Pub.Rec.Doc. 202. Without evidence of such an objection, FTC's argument that it lacked sufficient time to respond warrants no further consideration. Furthermore, this was not a new issue. FTC could have submitted its own economic data earlier in the case.
[12] 19 U.S.C. § 1677f-1(b) provides:
The authority to select appropriate samples and averages shall rest exclusively with the administering authority; but such samples and averages shall be representative of the transactions under investigation.
19 U.S.C. § 1677f-1(b).
19 C.F.R. § 353.59(b)(1) provides:
In calculating United States price or foreign market value, the Secretary may use averaging or generally recognized sampling techniques whenever a significant volume of sales or number of adjustments are involved.
19 C.F.R. § 353.59(b)(1).
[13] Weekly averaging probably would adjust adequately for most perishability problems. Monthly averaging also tends to even out the impact of holiday sales and post-holiday effects.
[14] In a final antidumping investigation, the International Trade Commission ("ITC") determines whether a United States industry is materially injured, or threatened with material injury, by reason of imports or sales of the merchandise under investigation. 19 U.S.C. § 1673(2)(A)(i)-(ii). In making this determination, the ITC considers, among other factors, the effect of imports on domestic prices, see 19 U.S.C. § 1677(7)(B)(i)(II), and whether there has been significant price underselling, or imports have depressed or suppressed prices to a significant degree. 19 U.S.C. § 1677(7)(C)(ii)(I)-(II). To determine whether price underselling has occurred, ITC considers whether the prices of imported goods are below the level necessary to meet competition. See e.g., British Steel Corp. v. United States, 8 CIT 86, 96, 593 F.Supp. 405, 412-13 (1984) (record indicates prices below level required to meet competition); S.Rep.No. 93-1298, 93rd Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Admin.News 7186, 7316 (when products sell at prices not lower than prevailing United States prices, dumping likely to be technical and not injurious to domestic market).
[15] Eight percent is the minimum CV profit factor. 19 U.S.C. § 1677b(e)(1)(B)(ii).
[16] Here, the percentages differed. Small firms accounted for only fourteen percent of exports for the eleven sampled companies exports; the medium and large companies accounted for eighty-six percent.
[17] According to Asocolflores, the credit-expense adjustment was made as follows: in cases where USP was based on Exporter's Sales Price, ITA deducted credit expense from USP; in cases where USP was based on Purchase Price, ITA added credit expense to FMV. Asocolflores does not provide citations to the record. Exporter's Sales Price and Purchase Price are defined in 19 U.S.C. §§ 1677a(b)-(c).
[18] In Ipsco, Inc. v. United States, 12 CIT 384, 687 F.Supp. 633 (1988), this court noted that the statutes and regulations concerning FMV provide for consideration only of sales in the "ordinary course of trade," whereas no corresponding provisions exist for USP. 12 CIT at 393-94, 687 F.Supp. at 640-41; Compare 19 U.S.C. § 1677b(a)(1); 19 C.F.R. § 353.46(a)(1), § 353.-46(b) with 19 U.S.C. § 1677a and 19 C.F.R. § 353.41. Hence, United States sales both in and out of the ordinary course of trade are included in the USP calculation.
[*] Confidential information deleted.
[19] The document indicates service on Floral Ltda. The court assumes that Valvanera was served with the same questionnaire. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555401/ | 775 F.Supp. 335 (1991)
UNITED STATES of America,
v.
Bobby D. WOOD.
Crim. No. 91-50012-01.
United States District Court, W.D. Arkansas, Fayetteville Division.
September 27, 1991.
Matthew J. Fleming, Fort Smith, Ark., Gregory T. Everts, Washington, D.C., for U.S.
Samuel A. Perroni, Little Rock, Ark., for Wood.
MEMORANDUM OPINION
MORRIS SHEPPARD ARNOLD, District Judge.
Defendant Bobby Wood was indicted in July, 1991, on one count of conspiracy to *336 distribute adulterated or misbranded animal drugs, one count of concealing material facts from the Food and Drug Administration, and 10 counts of distribution of misbranded animal drugs. Trial is set for early February, 1992.
Defendant Wood has now moved for discovery of considerable information relating to grand jury procedures and materials, including details of when and how testimony was presented, attendance records of grand jurors, voting records on the indictment, the jury instructions given, and those who had access to grand jury materials. The government opposes on the ground that defendant Wood has not shown the particularized need that would allow him to have access to grand jury materials. The motion will be denied.
I.
Fed.R.Crim.P. 6 governs grand jury proceedings in general. It specifies that a grand jury must have between 16 and 23 members,[1]see Fed.R.Crim.P. 6(a)(1); that all grand jury proceedings except deliberation and voting are to be recorded, see Fed.R.Crim.P. 6(e)(1); that one of the grand jurors is to keep a record of the number of jurors concurring in the decision to indict, see Fed.R.Crim.P. 6(c); that an indictment may be returned only upon the concurrence of 12 or more legally qualified grand jurors, see Fed.R.Crim.P. 6(f), see also Fed.R.Crim.P. 6(b)(2); and that the government may not disclose "matters occurring before the grand jury" except as specified by the rule, see Fed.R.Crim.P. 6(e)(2). A court may order disclosure of otherwise secret grand jury matters "at the request of a defendant, upon a showing that grounds may exist" to dismiss the indictment "because of matters occurring before the grand jury," see Fed.R.Crim.P. 6(e)(3)(C)(ii), or "preliminarily to or in connection with a judicial proceeding," see Fed.R.Crim.P. 6(e)(3)(C)(i). Professor Wright describes the latter provision as permitting disclosure "for purposes other than a motion to dismiss the indictment." See 1 C. Wright, Federal Practice and Procedure: Criminal 2d § 108 at 265-66 (1982).
II.
It is not clear to the court exactly why defendant Wood is requesting access to grand jury materials. In his motion, defendant Wood states that "it has become apparent" that at least two grand juries have "probably" investigated the events precipitating his indictment[2] and suggests that such circumstances "present questions concerning possible grand jury irregularities." Based on these assertions, the court believes that defendant Wood is anticipating the possibility of a motion to dismiss, either because of procedural irregularities[3] or because of substantive due process concerns.[4] Because of the "strong presumption of regularity of the grand jury proceedings," see 1 C. Wright, Federal Practice and Procedure: Criminal 2d § 111.1 at 326 (1982), however, these assertions by defendant Wood, unsupported by affidavit or other evidence, are insufficient to establish that "grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury," see Fed.R.Crim.P. 6(e)(3)(C)(ii).
The Eighth Circuit has found an insufficient showing in cases where an affidavit by counsel for the defendant stated that a tape of several witnesses after their grand *337 jury appearances contained a description of various instances of prosecutorial misconduct during the grand jury proceedings, but the affidavit was unsupported by other evidence, see Beatrice Foods Co. v. United States, 312 F.2d 29, 37, 39 (8th Cir.1963), cert. denied, 373 U.S. 904, 83 S.Ct. 1289, 10 L.Ed.2d 199 (1963), see also United States v. Hintzman, 806 F.2d 840, 843 (8th Cir. 1986); where the defendant's motion "relied upon ... an attack upon the use of hearsay," see United States v. Smith, 552 F.2d 257, 261 (8th Cir.1977); where the defendant made "a general plea that an inspection of the [grand jury] minutes might yield a ground" for a motion to dismiss, see United States v. Harbin, 585 F.2d 904, 907 (8th Cir.1978) (per curiam), see also United States v. Knight, 547 F.2d 75, 78 (8th Cir.1976) (per curiam), and United States v. Harflinger, 436 F.2d 928, 935 (8th Cir.1970), cert. denied, 402 U.S. 973, 91 S.Ct. 1660, 29 L.Ed.2d 137 (1971); and where "it was only conjecture that the minutes might reveal grounds for motions to dismiss," see United States v. Ammons, 464 F.2d 414, 417-18 (8th Cir.1972), cert. denied, 409 U.S. 988, 93 S.Ct. 343, 34 L.Ed.2d 253 (1972). Other circuits have found an insufficient showing in cases where counsel for the defendant stated "his `understanding' that the grand jury which had returned the indictment was not the grand jury which had heard the witnesses" but offered no factual support for that "`understanding,'" see United States v. Fife, 573 F.2d 369, 372 (6th Cir.1976), cert. denied, 430 U.S. 933, 97 S.Ct. 1555, 51 L.Ed.2d 777 (1977); where the defendant's "assertion of impropriety" in the grand jury proceedings, "based only on the speed with which the indictment was returned," was "mere speculation," see United States v. Ferreboeuf, 632 F.2d 832, 835 (9th Cir. 1980), cert. denied, 450 U.S. 934, 101 S.Ct. 1398, 67 L.Ed.2d 368 (1981); and where the defendant asserted that he had "no way of knowing whether prosecutorial misconduct occurred" without grand jury transcripts, see United States v. Bennett, 702 F.2d 833, 836 (9th Cir.1983).
In light of such case law, see generally, Annotation, Accused's Right to Inspection of Minutes of Federal Grand Jury, 3 A.L.R. Fed. 29, especially §§ 12-14 at 70-84 (1970), this court cannot find in good conscience that defendant Wood has made the requisite showing of the potential for the existence of grounds for a motion to dismiss the indictment. See Fed.R.Crim.P. 6(e)(3)(C)(ii).
III.
To be entitled to disclosure of grand jury materials for purposes other than a motion to dismiss, presumably trial preparation in this case, a defendant must show a "`particularized need' ... which outweighs the policy of secrecy." Pittsburgh Plate Glass Co. v. United States, 360 U.S. 395, 400, 79 S.Ct. 1237, 1241, 3 L.Ed.2d 1323 (1959), quoting United States v. Procter and Gamble Co., 356 U.S. 677, 683, 78 S.Ct. 983, 987, 2 L.Ed.2d 1077 (1958). See also Dennis v. United States, 384 U.S. 855, 870-71, 875, 86 S.Ct. 1840, 1849, 16 L.Ed.2d 973 (1966); United States v. Benson, 760 F.2d 862, 864 (8th Cir.1985) (per curiam), cert. denied, 474 U.S. 858, 106 S.Ct. 166, 88 L.Ed.2d 137 (1985); United States v. Bruton, 647 F.2d 818, 823-24 (8th Cir.1981), cert. denied, 454 U.S. 868, 102 S.Ct. 333, 70 L.Ed.2d 170 (1981); and United States v. Bass, 472 F.2d 207, 210 (8th Cir.1973), cert. denied, 412 U.S. 928, 93 S.Ct. 2751, 37 L.Ed.2d 155 (1973). As a practical matter, many decisions treat the requirement of particularized need and the evaluation of a defendant's ability to show potential grounds for a motion to dismiss as essentially synonymous, although the opinions are not always explicit on this point. See, e.g., United States v. Harbin, 585 F.2d 904, 907 (8th Cir.1978) (per curiam); United States v. Knight, 547 F.2d 75, 78 (8th Cir. 1976) (per curiam); United States v. Ammons, 464 F.2d 414, 417-18 (8th Cir.1972), cert. denied, 409 U.S. 988, 93 S.Ct. 343, 34 L.Ed.2d 253 (1972); and Beatrice Foods Co. v. United States, 312 F.2d 29, 39 (8th Cir.1963), cert. denied, 373 U.S. 904, 83 S.Ct. 1289, 10 L.Ed.2d 199 (1963).
The court holds that under the prevailing law of the Eighth Circuit, defendant Wood has failed to show a particularized *338 need for the information relating to grand jury procedures and materials that he seeks. See also Annotation, Accused's Right to Inspection of Minutes of Federal Grand Jury, 3 A.L.R. Fed. 29, especially § 3(b) at 47-51, § 9(a) at 63-67, and § 10 at 69-70 (1970).
IV.
Defendant Wood has moved, separately, for early disclosure of the pretrial statements and grand jury testimony of government witnesses. The court finds that, for the same reasons that access to the grand jury materials discussed above is denied, defendant Wood's request for these witness statements and testimony is denied.
NOTES
[1] By statute, at least 16 grand jurors must be present for any grand jury proceedings to be valid. See 18 U.S.C. § 3321.
[2] The government denies this allegation.
[3] Defendant Wood alludes to the necessity of determining whether quorum requirements were met, presumably as to both the taking of testimony and the decision to indict.
[4] Defendant Wood asserts that "the clear ambiguities" of the statutes establishing criminal liability for his alleged acts "compel disclosure" of the instructions given to the grand jury "to ensure that the elements" of the offenses were "properly stated." Defendant Wood also contends that where an indictment is based primarily or solely on hearsay, the grand jury's independence in assessing credibility may be compromised. The court construes this as an argument that such circumstances may be present in this case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555407/ | 36 So.3d 97 (2010)
LeBLANC
v.
STATE.
No. 2D09-5082.
District Court of Appeal of Florida, Second District.
May 20, 2010.
Decision Without Published Opinion Appeal dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/407993/ | 687 F.2d 257
Horace Edward HOLLIS, Appellant,v.UNITED STATES of America, Appellee.
No. 81-2184.
United States Court of Appeals,Eighth Circuit.
Submitted May 21, 1982.Decided Aug. 30, 1982.
John D. Evans, Jr., Lewis, Rice, Tucker, Allen & Chubb, St. Louis, Mo., for appellant.
Thomas E. Dittmeier, U. S. Atty., Edward L. Dowd, Jr., Asst. U. S. Atty., St. Louis, Mo., for appellee.
Before ROSS and McMILLIAN, Circuit Judges, and ALSOP,* District Judge.
ROSS, Circuit Judge.
1
This is an appeal from the district court's1 denial of Hollis' habeas petition filed pursuant to 28 U.S.C. § 2255. We reverse in part and affirm in part.
2
Hollis was indicted on June 1, 1979, on eleven counts of interstate transportation of forged securities, in federal district court in Delaware under 18 U.S.C. § 2314. Hollis consented to a transfer of the case to the Eastern District of Missouri pursuant to Rule 20 of the Federal Rules of Criminal Procedure.
3
On June 5, 1979, the government made an oral motion for a psychiatric examination, which motion was granted by the district court. On August 2, 1979, the district court reviewed the psychiatric report of Hollis' examination at the Springfield Medical Center and concluded that Hollis was competent. Also at the June 5 hearing, the district court accepted Hollis' pleas of guilty to five of the eleven counts. Pursuant to the plea agreement the government dismissed the other six counts. On August 20, 1979, Hollis was sentenced to five consecutive five-year sentences for a total sentence of twenty-five years.
4
On September 10, 1979, Hollis' attorney filed a notice of appeal. On January 14, 1981, this court dismissed the appeal for failure to file within ten days under Rule 4(b) of the Federal Rules of Appellate Procedure. United States v. Hollis, 647 F.2d 167 (8th Cir. 1981). Hollis filed this habeas action on February 3, 1981. The district court reviewed Magistrate David D. Noce's report and recommendation and dismissed the habeas petition.
5
On appeal Hollis argues: (1) that he was denied effective assistance of counsel due to his attorney's failure to file a timely appeal; (2) that he was denied effective assistance of counsel due to his attorney's failure to order an independent psychiatric examination; and (3) that his guilty plea was involuntary.
I. Untimely Appeal
6
Hollis argues he was denied effective assistance of counsel because his attorney failed to file a timely notice of appeal from the sentence and conviction, which failure resulted in a dismissal of the appeal. The district court denied the habeas petition because:
7
While the failure to file the notice of appeal within the required period of time violated Hollis' right to effective assistance of counsel, there is no prejudice to Hollis by this failure, because he does not allege what claims were not considered on appeal, other than those which were raised in the instant § 2255 proceeding and which have been found to be without merit. (Citation omitted.)Hollis argues that no showing of prejudice or likelihood of success on the merits need be made to show ineffective assistance of counsel for failure to file a timely appeal. We agree.
8
The standard established in this circuit is that "trial counsel fails to render effective assistance when he does not exercise the customary skills and diligence that a reasonably competent attorney would perform under similar circumstances." United States v. Easter, 539 F.2d 663, 666 (8th Cir. 1976), cert. denied, 434 U.S. 844, 98 S. Ct. 145, 54 L. Ed. 2d 109 (1977) (footnote and citation omitted). Additionally, petitioner must show that his attorney's failure prejudiced his defense. Id. at 666.
It is clear that
9
(t)he failure of counsel to take the simple steps required to file a notice of appeal when instructed by his client to do so would * * * (constitute) "such an extraordinary inattention to a client's interests as to amount to ineffective assistance of counsel, cognizable under Section 2255."
10
Williams v. United States, 402 F.2d 548, 552 (8th Cir. 1968) (citations omitted). Hollis and his attorney testified at the habeas hearing that Hollis had informed his attorney of his wish to appeal his sentence. Hollis' attorney stated that the delay in filing the notice of appeal was inadvertent. We agree with the district court that the attorney's failure to file a timely notice of appeal of Hollis' sentence and conviction did amount to ineffective assistance of counsel.
11
Regarding the requirement that petitioner show that the attorney's failure prejudiced his defense, this court has stated that "(i)n situations where ineffective assistance of counsel deprives a defendant of his right to appeal, courts have not required a showing of prejudice or of likely success on appeal." Robinson v. Wyrick, 635 F.2d 757 (8th Cir. 1981) (citations omitted). In Robinson, counsel brought the appeal but filed a deficient brief. The court held that
12
where none of Robinson's alleged errors were preserved for review, we have no difficulty concluding that Robinson was denied his right to a direct appeal of his conviction and that he was denied his constitutional right to effective counsel-just as much as if counsel had never filed a notice of appeal.
13
Id. at 759 (footnote omitted).
14
The court in Robinson followed the rule originally established in this circuit in Williams v. United States, supra, 402 F.2d 548 and announced by the Supreme Court in Rodriquez v. United States, 395 U.S. 327, 330, 89 S. Ct. 1715, 1717, 23 L. Ed. 2d 340 (1969) of not requiring a petitioner to specify the points he would raise on appeal in order to make a showing of ineffective assistance of counsel where no notice of appeal was filed.2 Accord Barnes v. Jones, 665 F.2d 427, 434 (2d Cir. 1981); Kent v. United States, 423 F.2d 1050, 1051 (5th Cir. 1970); Grooms v. Solem, 520 F. Supp. 1184, 1186 (D.S.D.1981). Hollis need not show that he was prejudiced by his attorney's failure to file a timely notice of appeal.
15
The procedure followed by this court to remedy petitioner's deprivation of his constitutional right to effective assistance of counsel is to vacate the sentence and to remand the case to the trial court for resentencing, the time for appeal then commencing to run from the date of the resentence. Williams v. United States, supra, 402 F.2d at 552. We adopt this procedure here and accordingly order a remand for resentencing.
16
John D. Evans, Jr., court appointed counsel who has efficiently and ably represented Mr. Hollis in this action, shall continue to represent Hollis in this litigation unless and until relieved of such obligation by this court or the district court.
II. Psychiatric Exam
17
Hollis argues he was denied effective assistance of counsel because his attorney failed to order an independent psychiatric examination to determine Hollis' competency. Hollis argues that he was not satisfied with the results of the court's psychiatric examination and told his attorney that he wanted a more thorough examination.
18
The district court held that a second psychiatric evaluation was not required because there was no evidence that Hollis was incompetent. Hollis cooperated with his attorney in the preparation of his case; had no previous psychiatric involvement; and elicited no signs of mental instability. Hollis' attorney's failure to order a second psychiatric examination, where there was no evidence that such an examination was necessary, did not amount to a failure to exercise the customary skills and diligence of a reasonably competent attorney under the standard for effective assistance established in United States v. Easter, supra, 539 F.2d at 666. See Harkins v. Wyrick, 552 F.2d 1308, 1313-14 (8th Cir. 1977).
III. Guilty Plea
19
Hollis argues that his guilty plea was involuntary because he relied on his attorney's representations that the maximum sentence Hollis would receive would be five years. Hollis also argues that his attorney failed to inform him of the maximum sentence allowed under the statute.3
20
The district court found that although Hollis and his attorney may have believed the sentence would not exceed five years, their expectations were based only on the attorney's opinion. The rule is clear that a defendant cannot set aside a guilty plea merely because he relied on his attorney's opinion that the sentence would be a lenient one. Greathouse v. United States, 548 F.2d 225, 228 n.6 (8th Cir.), cert. denied, 434 U.S. 838, 98 S. Ct. 130, 54 L. Ed. 2d 100 (1977). Where "a defendant is invariably informed that the sentencing decision rests solely in the discretion of the trial court," United States v. Goodman, 590 F.2d 705, 711 (8th Cir.), cert. denied, 440 U.S. 985, 99 S. Ct. 1801, 60 L. Ed. 2d 248 (1979), and where the defendant states at the sentencing hearing that he understood the negotiated plea and that there were no promises other than the plea agreement, Pennington v. Housewright, 666 F.2d 329, 332 (8th Cir. 1981), cert. denied, --- U.S. ----, 102 S. Ct. 1775, 72 L. Ed. 2d 178 (1982), the plea will not be set aside as involuntary.
21
Both Hollis and his attorney testified at the habeas hearing that they expected the sentence to be more lenient. However, there was no evidence that any promises were made as to what the sentence would be. Hollis understood that the sentencing was entirely within the discretion of the trial judge; he stated at the sentencing hearing that no promises had been made as to the length of the sentence; and he was informed by the court of the maximum possible sentence. Under these circumstances, we cannot say that the trial court erred in determining that the plea was voluntarily made.
22
Reversed in part and affirmed in part.
*
The Honorable Donald D. Alsop, United States District Judge for the District of Minnesota, sitting by designation
1
The Honorable H. Kenneth Wangelin, Chief Judge, United States District Court for the Eastern District of Missouri
2
This court in one instance held that a petitioner failed to show that his attorney's failure to file a direct appeal denied him effective counsel where petitioner did not state what grounds were available for an appeal. United States v. Neff, 525 F.2d 361 (8th Cir. 1975). However, Neff is not applicable to the present case because there the attorney advised Neff that he had no grounds for an appeal. Neff argued that his attorney's advice amounted to ineffective assistance and not that his attorney failed to file an appeal when instructed by Neff to do so. In the present case it is clear that Hollis instructed his attorney to take an appeal. Hollis' attorney did not follow his client's instructions. United States v. Neff is therefore distinguishable from the present case
3
We find no merit in the latter argument because Hollis testified that the district court fully informed him of the maximum possible sentence at the sentencing hearing. Hollis does not contend that he was unaware of the maximum sentence; only that his attorney did not so inform him | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1555566/ | 36 So.3d 112 (2010)
GARDNER
v.
STATE.
No. 5D08-4513.
District Court of Appeal of Florida, Fifth District.
May 18, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555631/ | 775 F.Supp. 929 (1991)
Timothy COURVILLE
v.
CARDINAL WIRELINE SPECIALISTS, INC.
Civ. A. No. 89-1511-LC.
United States District Court, W.D. Louisiana, Lake Charles Division.
October 15, 1991.
*930 Nick Pizzolatto, Jr., Lake Charles, La., for plaintiff.
Allen L. Smith, Jr., Lake Charles, La., for defendant.
RULING
TRIMBLE, District Judge.
This matter was tried before the undersigned on August 8, 1991, the plaintiff seeking damages for an injury sustained by him on March 22, 1989 while descending a ladder/stairway from the wheelhouse down to the galley of the JoMac 8, a 3-legged lift vessel owned and operated by Cardinal Wireline Specialists, Inc. Mr. Courville was a wireline helper and deckhand assigned to this boat, which was operated by a two man crew. The other crew member was Mr. Courville's superior, Steve Arnold, the boat captain and wireline operator. The parties stipulated that plaintiff, at the time of the alleged accident, was a seaman within the meaning of the Jones Act (46 U.S.C.App. § 688). Plaintiff's claims are predicated on theories of negligence on the part of the employer under the Jones Act and unseaworthiness of the vessel. Although plaintiff's wife and minor child were joined as parties plaintiff, counsel for plaintiff conceded that under recent jurisprudence they have no claims individually against the defendant. Defendant Cardinal denies any negligence or unseaworthiness giving rise to liability on its part, and alternatively alleges contributory negligence of Mr. Courville in reduction of his claim.
SUMMARY OF PERTINENT EVIDENCE
Mr. Courville testified that he had worked on this same boat from July, 1988 until just before Christmas of 1988, when the boat was transferred to New Iberia. At that time he was an employee of Schlumberger, in the Wireline Division, doing the identical work that he subsequently performed for Cardinal. When he first went to work for Schlumberger, Mr. Courville applied non-skid tape to the steel stairway from the galley to the wheelhouse. The treads had little "chicken feet" or raised areas to help create a non-skid surface, but the stairs were still slippery until the tape was applied.
*931 During early January of 1989, Mr. Courville worked offshore "catching jobs" for about two or three weeks, and he was not working on the JoMac. Toward the end of January, 1989 the boat was sent back from New Iberia to Galveston, at which time he was reassigned to it and discovered that the non-skid tape had been removed from the stairway. Because of the slippery condition on the stair steps, both he and the skipper, Steve Arnold, asked Alan and Paul Langley for non-skid tape for the treads. According to Mr. Courville, this occurred on more than one occasion, and one time another employee, Dennis Vidrine, was present. The conversations concerning the tape took place in the Cardinal office on Opelousas Street in Lake Charles. Alan Langley was the Lake Charles district manager, and Paul Langley was a salesman. Both plaintiff and Steve Arnold testified to the general state of disrepair of the boat, but the testimony made it clear that the only possible neglect relevant to this case had to do with the failure to furnish a non-skid surface for the treads of this particular stairway.
On March 22, 1989, Mr. Courville and Mr. Arnold drove from Sulphur to where the JoMac was docked in Galveston, arriving there about 6:00 A.M. Courville went directly up the stairs in question to the wheelhouse, checked things there, and then started down the stairs. Mr. Courville testified that he was descending, facing forward, and was holding the handrail which was to his left. When he was about halfway down, his right foot slipped, causing him to fall a distance of 4 to 4½ feet to the floor of the galley. He attempted to stop his fall by grabbing the railing and going stiff legged. When he landed, it felt as though his weight went to the inside, and he knew that his knee was hurt immediately. There was swelling in the joint, and he called to Steve Arnold for help. Mr. Courville's testimony was that the stairway was inside, it was dry, and he was not aware of any foreign matter on the stairs. The only complaint with the stairway, then, relates to the fact that it was quite steep, as illustrated in the photographs, and that the steel surface, even with the "chicken feet", without further non-skid coating, was slippery. Mr. Courville testified that he was wearing the standard steel toed work boots that all other workers wore.
Following the accident, Arnold assisted Courville in getting to the truck as Courville could not put any pressure on his right leg. They started back toward Lake Charles, but there was a constant pain in his knee as though he was being stabbed, so they stopped at St. Elizabeth Hospital in Beaumont. An emergency room doctor X-rayed the knee and put it in a brace to immobilize it. The physician stated that he needed to see a specialist. The doctor did give him a pain pill, but plaintiff could not remember whether he gave him a prescription for pain. The pain continued about the same until they arrived in Lake Charles. They had obtained some crutches from the hospital, which he used to walk into the office. Arnold called Dr. David Drez, an orthopedist in Lake Charles, and made arrangements for the doctor to see him. Arnold took him home, and from there his wife took him to Dr. Drez's office. Meanwhile, the pain had worsened. Dr. Drez drained the knee of fluid with a needle, which relieved the pain somewhat. Dr. Drez prescribed therapy. Mr. Courville testified that he did not get a prescription for pain because he has ulcers and could not take oral pain medication. After three or four days of physical therapy, he returned to Dr. Drez, who had him admitted to Lake Charles Memorial Hospital for arthroscopic surgery of the knee. He was in the hospital for two days, was released, and then saw Dr. Drez about two days later for removal of the stitches. He was placed on a machine that flexed his leg. He took this machine home with him and used it for several months. He also started physical therapy within a few days after the operation and continued that for several months. When walking, he utilized a stiff-legged brace. The pain was still bad, but not as severe as it had been before the operation. He was on crutches for about three or four months, and he even slept with the machine that moved his leg.
*932 Mr. Courville claims that he still has pain in his right knee. It feels like something is under the kneecap, and he feels a locking in the knee. There is also a popping and grinding in the kneecap. Occasionally, the pain will keep him awake at night. However, he admits there is no comparison between what the pain is now and what it was immediately after the accident, when it was excruciating. He is on no medication for pain because of his stomach condition. He did testify that pain injections do not irritate his stomach, and he also stated that he has not been treated for his ulcers since 1980 or 1981, when he spent eight days in the hospital. He said that he has problems with his right leg giving out, causing him to fall. Several months prior to the trial, he fell down the steps when this occurred, and a second surgery was performed. He has fallen a total of three times since his first operation. At the second surgery, Dr. Drez found that the knee joint was tight but noted some weakness in the quadriceps muscles. He finds that he has some aching when the weather changes.
Mr. Courville described an active recreational life, including hunting deer, duck, and squirrel. He states that he cannot walk the marsh, which is how he had hunted duck, nor can he climb a deer stand or walk on uneven ground. He states that he cannot walk very far.
Mr. Courville further testified that he used to fish, primarily for bass and perch. He admits that since the accident he has bought a campsite, and his friends built a camp for him. He helped a little, and he stated that he fished every chance he got. It was about a year following the accident when he resumed fishing, and he said that he has to sit down to fish now rather than stand up.
Mr. Courville claims that he also used to swim, tube, canoe, and water ski. He also did some snow skiing, but he can neither water ski nor snow ski now. He has done some swimming for therapy.
He has moved his family from a house in the country where he had a horse because he could not cut the grass or care for the horse. He used to ride a lot, but he has not ridden since his injury because he is afraid that the horse might shy away. On further examination, he admitted that he has gone snow skiing only once in his life. He now lives in a house with a smaller yard and uses a riding lawn mower. Before the accident, he enjoyed dancing, including fast dancing, but now he can only slow dance a little. He cannot kneel or crawl because of pain in his kneecap. He states that his family life has changed in that his temper flares, he is high strung, and he cannot ride the horse with his daughter, or "roughhouse" with her as he used to do. He is nervous, and this adversely affects his sleep. He is worried about his future and has borrowed money to live on. He has been receiving maintenance, up to the date of trial, from his employer. Mrs. Courville had gone to work a few months before the accident, and she is still employed by the Calcasieu Parish School Board as a cafeteria worker.
Mr. Courville has made no attempt whatever to find a job of any kind, his explanation for this being that he had not been "released" from the doctor's care. However, he had been told by the doctor that he had reached maximum medical recovery. He stated that he would have to try to go to school or get an office job of some kind.
On cross-examination, Mr. Courville admitted that he did not consider himself an invalid or totally disabled from doing any kind of work. He simply admitted that he had not tried to do any type of work. He further admitted that Dr. Drez had told him on July 25, 1990 that he had reached maximum medical recovery and needed to re-train, and gave as his only excuse for not doing anything about getting back into the work force the fact that he had not received a release form. He admitted that there was brown paint on board the JoMac, but he denied knowing how to make a surface skid resistant by sprinkling sand over a freshly painted area. He testified that Glenn Hebert had recommended that he attend a vocational-technical school or college, but he has done nothing about following that advice. He had no interest in going to college before, but he may have *933 to attend college now. He has thought about going into sales or some type of business for himself. It was established on direct examination that he had prior experience driving a delivery truck for Standard Supply, had worked for the Iowa Police Department, and for the Calcasieu Parish Sheriff's Department for a time, and had also operated a bar and night club for about 8 months.
Dennis Vidrine was a wireline operator and boat skipper who worked with the plaintiff. He also went to work for Cardinal after the Slick Line Division had been purchased from Schlumberger. Mr. Vidrine testified that he worked on JoMac 8 with Courville when Schlumberger owned it. He testified that he was present on one occasion when Steve Arnold and the plaintiff requested non-skid tape for the stairway on the JoMac 8. Vidrine stated that there was no non-skid tape on the steps when he had last worked on it. On other Cardinal boats, however, non-skid tape was on the steps. Vidrine also stated that the paint and sand mixture does not provide much skid resistance. Mr. Vidrine stated that all the ladders on the boats were steep. He had no problems going down stairs on the JoMac 8, which did not have non-skid tape when he worked on it, but he has had problems going down similar stairs on other Cardinal boats. He testified that the skipper was responsible for the overall condition of the boat. The helper does most of the labor, but the skipper determines what is needed in the way of repairs and makes requests for material to be used from the supervisory staff. While he felt that more than two men were needed on a boat, he admitted that a two man crew is standard in the industry. He could not recall what response Alan Langley made to the request for non-skid tape.
Steve Arnold now works for Production Wireline Services in Jennings as a wireline operator. He had worked for Schlumberger for about 11 years, and then worked for Cardinal for 8 or 9 months. He was on the JoMac 8 working for Cardinal the first part of 1989. He was working out of the Lake Charles division, and Tim Courville was his helper. He picked up Courville on the morning of March 22, 1989, and they arrived at JoMac 8 in Galveston between 6 and 6:30 A.M. Tim went to check the wheelhouse while Arnold went to the tool area. About 6:30 or 6:45 A.M., Tim called him into the galley, and he found him lying on the floor at the foot of the steps. He advised that he had been going down the stairs from the wheelhouse and fell. He helped Tim up and looked at his right knee, where he noted apparent swelling. He recounted the trip from Galveston to Lake Charles, with the interim stop at St. Elizabeth Hospital in Beaumont, much the same as the plaintiff. Mr. Arnold testified that the stairs did not have a non-skid surface, and that it was common in the industry that things that were used for climbing were provided with a non-skid surface. He, as the skipper, was responsible to see that appropriate material was requested, and either he or the helper would put it down. Ultimately, it was his responsibility to see that the stairs were made safe. He stated that he had ordered non-skid tape before Tim's accident, but he did not receive it until after. The first time it was requested was early or mid-January. He noted the absence of the non-skid tape when he inspected the vessel right after being assigned to it. This is routine with him. Mr. Arnold testified that he requested not only non-skid tape, but a non-skid paint additive for the deck and paint in general for cosmetic use on the boat. The only material that he received was the tape after Tim's accident. He stated that he requested the non-skid tape at least twice before the accident. He stated that he had made the request of Paul Langley, the district salesman for Cardinal. Arnold testified that he had surgery on his left knee in 1972 because of torn ligaments and cartilage, and as a result thereof received a medical retirement from the Marine Corps. In February of 1976, following a fall off a gin pole while working for Otis Engineering, he again had surgery to correct torn cartilage and ligaments. Arnold testified that the skipper handles customer relations, operates the boat, runs the wireline, and is generally responsible for the upkeep *934 of the vessel. The wireline helper does about everything else. Because of his knee problems, he is limited in climbing and stooping. He has a 55 percent permanent partial disability of his left leg, and he testified that he could not work as a helper, though he has been able to continue to work as a wireline operator.
On cross-examination, Arnold testified that there was brown paint on the boat, but there was no sand. He had requested some sand, but that had not been furnished. He advised that he was not responsible to bring material for the boat from his home. Tim Courville had advised him that the steps on the stairway of the JoMac 8 were slick. He had also personally had some problem with the steps, though he had never actually fallen. Because he is taller than Tim, he was able to hold onto the headway on the way down. Tim had proper footwear for his job as a helper when the accident occurred.
Professor Jan Duggar, who teaches finance at U.S.L., prepared a report which was introduced into evidence concerning loss of income, past and future. The information regarding earnings communicated to Duggar was that Courville earned $5.70 per hour, 15 hours per day, 5 days a week, and sometimes 7 days on and 7 days off. Additionally, there were fringe benefits, which the witness estimated at 11.4 percent of earnings. Professor Duggar testified that he assumed, in his calculations, that Mr. Courville worked full-time with overtime. Certain modifications were required from the written report because the date of trial was delayed from March, 1991 until August, 1991. Additional calculations were made, appearing on plaintiff's exhibit 5, at the request of plaintiff's counsel, on actual earnings from Schlumberger and at the request of counsel for defendant on actual earnings from Cardinal. These figures speak for themselves and need not be reiterated here.
The testimony of Dr. David Drez, submitted by deposition, establishes that on April 4, 1989, he performed arthroscopic surgery to correct slackness in the right knee and to repair a tear of the cartilage on the lateral side of the knee. The torn ligament in the knee was reconstructed by taking a portion of the tendon of the kneecap and grafting it to serve as a substitute for the ligament. There were no complications following the surgery, and he was continued on routine follow-up examinations until January 22, 1990. Because of continued complaints of pain in the knee and no further rehabilitative progress, Dr. Drez suggested on that date that the knee be re-arthroscoped to see if there was anything wrong. The doctor testified that he could not explain these symptoms on the basis of his examinations. On January 23, 1990, the doctor performed another arthroscopic procedure. This revealed excellent stability of the knee with no arthritis apparent and no loose body in the joint. The area of the graft was well supplied with blood vessels and was stable. The doctor found no abnormality in the joint but did remove a screw which had been inserted at the initial operation because it was causing a little irritation.
Dr. Drez was extremely thorough, even having a neurologist test him for muscular dystrophy because he advised that a family member had that disease. The neurological examination was normal.
On March 14, 1990, Mr. Courville complained to Dr. Drez about pain in the knee with some popping, but with no catching, and swelling of the knee with activity. There was also a complaint that the knee gave way on him, and that he felt some grinding in the kneecap which would prevent him from squatting and caused him pain on climbing stairs. On examination, the doctor found a slight limp, with excellent motion in the knee and no difference in thigh circumferences. The doctor did detect a mild degree of grinding in the kneecap, but there was excellent stability in the knee. A Cybex test for muscle weakness revealed that muscle around the knee on the right was approximately 50 percent weaker than on the left. The doctor felt this was probably pain inhibition, meaning that pain prohibited him from performing the test to maximum effort. On April 18, 1990, the strength deficit had diminished by about 20 percent, with complaints being *935 about the same otherwise. Dr. Drez last saw plaintiff on July 25, 1990 and explained to him that he had reached maximum medical improvement and told him it would be to his advantage to find some other occupation besides oilfield work in view of his complaints. Dr. Drez testified that Mr. Courville would be expected to have some weather-related discomfort in the knee, and he has detectable weakness in the knee. He has a greater risk than the normal person for developing arthritis over a 10-20 year period. He assigned him a permanent partial impairment to the right lower extremity of 35-40 percent, which translates to a 14-16 percent impairment of the body as a whole. Dr. Drez's testimony, which was taken on April 3, 1991, was that he had not seen the plaintiff since July 25, 1990. While the doctor stated that Mr. Courville would not be effective in climbing stairs, carrying heavy loads, and he would not be able to go back to the heavy manual labor he had previously performed, "he is certainly not totally disabled by any stretch of the imagination."
The parties stipulated that if David Qualls, a physical therapist who worked with the plaintiff, were called to testify, he would state that the plaintiff had cooperated with his rehabilitation program.
Glenn Hebert, a vocational rehabilitation expert, testified for defendant. His report was entered as defendant's exhibit 4. This reveals that Mr. Courville has in fact had approximately one year instruction in small appliance repair and that he was trained as an electrician's mate while in the United States Navy. Testing by Mr. Hebert revealed that the plaintiff was reading at the tenth grade level, and that he demonstrated competence in spelling and arithmetic at the ninth grade level. IQ test revealed him to be of average intelligence. He functions at a higher intelligence level than the normal individual who performs labor work, and the tests show that he has the capacity to work in office environments that require reading, taking messages, completing forms, using technical manuals, following detailed written instructions, and performing mathematical calculations beyond simple addition, subtraction, multiplication, and division. He has the capacity to complete vocational-technical school requirements in the courses of instruction in electronics, computer maintenance, computerized-aided drafting, and computer operations. Further, he demonstrated the ability to complete office skills occupation courses. These courses last an average of 18 to 24 months. Mr. Courville expressed to him some interest in returning to school for some retraining, and if he attended the state supported vocational-technical school in the Lake Charles area he would spend an average of 18 to 24 months in training and, and if could not obtain financial assistance, the cost would run between $2,000.00 and $3,000.00. If he had to purchase his own special tools, they would cost about $1,000.00 additional. In fact, he is eligible for assistance, which would pay all tuition, books, and supplies, plus $5.00 per day subsistence. The jobs for which he would become qualified through this retraining would all pay in excess of the $5.70 per hour that he was earning, and would actually pay in the $6.25 per hour category, or more.
At private schools such as Delta or Clark, a two year course would cost him between $5,000.00 and $6,000.00. At McNeese, a two year associate degree in electronics, computer operations, or computer-aided drafting would cost about $15,000.00, including books, tuition, material, parking and meals. With the skills acquired in this program, he should be able to begin work earning between $1,400.00 and $1,500.00 per month.
Mr. Hebert also testified that while Mr. Courville's intelligence was average for the nation, he is higher than the Louisiana average.
Defense exhibit 1 is a letter from the controller of Cardinal Wireline showing that Mr. Courville earned $9,118.33 from July 5, 1988 to December 31, 1988, while employed by Schlumberger. From January 1, 1989 through the date of the accident, March 22, 1989, he earned $3,446.83 while employed by Cardinal.
*936 The deposition of Mr. Alan Langley disclosed that he was the former manager of Cardinal Wireline at the Lake Charles district office beginning in January, 1989. He was familiar with the stairways on the JoMac 8, which he described as being very steep and narrow. They were made of iron, and when Schlumberger had the boat, they had non-skid tape on the treads. He recalled that Steve Arnold had asked him for tape, but he did not remember when it was. He contacted the safety director and obtained some tape and gave it to Arnold. He could not recall whether this was before or after the accident. His testimony was that he thought he received the tape before the accident, but he was not sure.
Paul Langley likewise testified by deposition. He did not recall being asked for any non-skid tape.
ANALYSIS OF LAW AND FACTS
A. Unseaworthiness
The law is clear and settled that a vessel owner has an absolute duty to furnish a seaworthy vessel, that is a vessel and appurtenances which are reasonably safe and fit for their intended use. Ceja v. Mike Hooks, Inc., 690 F.2d 1191 (5th Cir. 1982). Photographs introduced into evidence clearly depict the stairway in question to be very steep and narrow as described by Alan Langley in his deposition. Even with the raised "chicken feet" plaintiff, Arnold, and Vidrine all described the surface of the treads of the stairway as being slippery without the non-skid tape. Non-skid tape had in fact been in use on the vessel when it was owned by Schlumberger, but for reasons unexplained it was removed and not reapplied until after Mr. Courville's mishap. No one testified that the steps were not slippery. In fact, Mr. Arnold testified that he had a problem with the steps but held onto the headway in descending, as he was taller than Courville. The use of the non-skid tape or some other skid resistant surface was apparently customary in the industry. Mr. Vidrine testified that the other Cardinal boats had non-skid tape on the stairway. This boat had had it when it was owned by Schlumberger.
Based upon the evidence in the case, the court concludes that the vessel JoMac 8, owned and operated by Cardinal Wireline Services, Inc., was, on March 22, 1989, at the time of plaintiff's accident, unseaworthy because of the absence of non-skid tape or some other appropriate skid resistent surface on the steep steps between the galley and the wheelhouse.
B. Negligence Under the Jones Act
A vessel owner will be deemed negligent if he fails to exercise reasonable care to maintain a reasonably safe work environment. Ceja v. Mike Hooks, Inc., supra. Evidence by way of testimony of plaintiff, Arnold, and Vidrine establishes to the court's satisfaction by a preponderance of the evidence that the unsafe condition of the stairs persisted from the first part of January, 1989 until March 22, 1989 when the accident occurred. Even if the condition had not been called to the attention of Cardinal management personnel, more than adequate time elapsed for management to have discovered the inadequacy and had it remedied. The court finds, however, that both Courville and Arnold made Alan and Paul Langley, who would have had authority to obtain the non-skid tape, aware of the situation and requested the material. This is really not a matter of making credibility choices. Courville, Arnold, and Vidrine testified positively to that effect. Alan Langley was extremely vague about when the tape was requested, and could not say whether it was before or after the accident. Paul Langley could not recall being asked for the tape, but he did not deny that such a request was made. In this situation, the positive testimony of the three witnesses preponderates to the effect that on more than one occasion, over a period that extended from sometime in January, 1989 until March 22, 1989, requests for the tape were made of management without response. Failure to remedy this defective condition of the stairway constituted negligence under the Jones Act.
The court notes that defense counsel was quite candid in his pretrial memorandum on this issue of liability, stating the following:
*937 "If the court believes that the non-skid material was removed from the steps by some Cardinal employees in New Iberia and that the Langleys refused or failed to supply non-skid material after requests by Courville and Arnold, then there seems to be little question that Cardinal Wireline Services is not only guilty of negligence under the Jones Act but that the vessel JoMac 8 would have been unseaworthy."
The court does not know who removed the non-skid tape, but is convinced that it was removed sometime after the boat was taken to New Iberia and before it was returned to Galveston. Thereafter, the court is convinced that well in advance of this accident, Alan and/or Paul Langley had been advised of the slippery condition of the steps and requested to furnish non-skid tape.
C. Contributory Negligence
As pointed out in Ceja v. Mike Hooks, Inc., supra, in contrast to the broad duty imposed upon a vessel owner to supply a safe work place, the seaman's duty to protect himself is slight. However, contributory negligence is available to mitigate a vessel owner's liability according to comparative fault, when an injured seaman has been negligent in breaching a duty to act or refrain from acting. A seaman is not contributorily negligent merely because he uses an unsafe tool or appliance or proceeds in an unsafe area of the ship. Only where it is shown that there existed a safe alternative available to him of which he knew or should have known, can a seaman's choice of an unsafe course of action be properly considered in determining whether he was negligent. Applying the foregoing statement of the law to the facts of this case, we had a stairway known to the plaintiff to be slippery. He had called the slippery condition to the attention of his immediate superior (Arnold) and to the Langleys. At the same time, the stairway was not by any means impossible of negotiation. Although Mr. Arnold steadied himself by holding onto the ceiling overhead, he walked down the steps without mishap even though he had a 55 percent disability of his left leg from two prior accidents and surgeries. The plaintiff himself had negotiated this stairway from January until the latter part of March without falling.
On the date of the accident, according to Courville's own testimony, there was no foreign substance in the way of water, grease, or otherwise, on the stairway. This was a routine workday, and the plaintiff was not being hurried in any way. He had nothing in his hands, and he claims to have been holding onto the rail with his left hand as he came down in the forward position.
Even though the cases indicate that a seaman's obligation to protect himself is slight, it is certainly not nonexistent. Counsel for plaintiff, in his pretrial memorandum, refers to the stairway as a "ladder/set of stairs." A photograph, in the opinion of the undersigned, shows this so-called stairway to be far more accurately labeled a ladder. The court finds that there did in fact exist a very obvious alternative which should have been quite apparent to the plaintiff, i.e., simply to use the stairway as a ladder, knowing that it was slippery and that the non-skid tape had not been applied to the treads. He could simply have gone down the ladder backward, holding onto the rail with his right hand. This would have been slightly slower, perhaps, but there is no evidence of any need for the plaintiff to have been in a hurry and no prohibition by his superiors against so utilizing the "stairway." The court feels that the plaintiff's own negligence or fault in the circumstances of this case contributed 15 percent to his injury, and the judgment herein will so reflect.
In passing, the court heard testimony about an option available to the crew of applying paint to the stairway and sprinkling it with sand. The paint was available on the vessel, but there was no sand. The court has been referred to no law or custom requiring crew members to furnish, at their own expense, and initiative, material to render a vessel seaworthy. The court ascribes no fault to Mr. Courville in that connection.
*938 D. Damages
As noted by Professor Duggar, Mr. Courville was approximately 29½ years old at the time of his injury. He is left with a 35 to 40 percent impairment of the right leg, according to Dr. Drez. The nature of his injury is such that he will not be able to engage in heavy manual labor, which is the type work that he had elected to perform. He was apparently quite active physically in his recreational life prior to his accident. Without question, there will be some significant restrictions on his future activities. He also will be more likely than the average person to develop arthritis in the affected knee.
The above having been said, the undersigned did not feel that Mr. Courville was totally ingenuous in his testimony as it pertains to damages in this case. Although he testified that he enjoyed snow skiing, it developed that he had only been snow skiing once in his life. In view of the fact that Mr. Courville is married and is by now probably the father of two children, considering his income as reflected in the letter from the Cardinal controller, it is doubtful that he would have engaged in snow skiing to any great extent. The court is aware of the expense involved in this particular activity. He also advised that he could not duck hunt any longer because it was his method of hunting to walk along the marshes. The court is likewise aware that thousands of hunters ride boats to duck blinds, where they sit and wait for the ducks to appear. If this is one of Mr. Courville's avid pursuits, there is no reason why he could not continue it with a slight modification. People with physical impairments from disease, injury, or congenital anomalies can and do make remarkable adaptation to their incapacities. The writer recently watched a program which featured in part video tapes of a young paraplegic playing tennis in a wheelchair with amazing skill and agility.
It is likewise noted that because of Mr. Courville's continued complaints of pain and weakness in the knee, in spite of the fact that there was nothing evident to indicate the cause of the problem, Dr. Drez performed a second arthroscopy. Through this, he found no vascular problem and no problem whatsoever with regard to stability of the knee. Neurological testing was totally normal. Measurements of the right thigh shows that it is equal to the left, which to the undersigned would indicate rather normal usage of the extremity despite Mr. Courville's protestations of discomfort. Dr. Drez never mentioned any wasting of the musculature of the right knee or leg. The strength test that he administered admittedly had a strong subjective component, but Dr. Drez stated that Mr. Courville may not have exerted maximum effort because of pain limitations. His assessment of disability was made on the basis of the demonstrated weakness. The court notes that Mr. Courville, following his injury, has purchased a campsite and assisted somewhat in building a camp thereon. The camp is located on a lake, and the court cannot conceive of Mr. Courville making this type of investment without an intention of making rather extensive use of it. In fact, Mr. Courville says that he resumed fishing about a year after his accident, but he simply cannot stand up and fish.
Having observed Mr. Courville and considered his testimony and the testimony of Dr. Drez, this court feels that Mr. Courville will in fact make adjustments in the manner in which he pursued many of his prior activities so as to permit him to engage in them, but perhaps not as vigorously and for not as extended a period of time. Nevertheless, Mr. Courville suffered apparent severe pain immediately following the injury and for sometime thereafter. He was forced to utilize a stiff-legged brace, to undergo two surgical procedures, and to be placed on a machine for two or more months that moved his leg involuntarily in order to avoid loss of motion. He is going to be forced to pursue employment not of his voluntary choosing, and he will not be able to engage in activities that involve climbing, squatting, or running on uneven ground. His disability comes during the prime of his life, when he could have looked forward to many years of enjoying a very physically demanding recreational *939 life. All circumstances considered, the court feels that an award of $175,000.00 for Mr. Courville's pain, suffering, disability, and loss of enjoyment of life, past, present, and future, is appropriate for general damages.
The only other item of damages involves loss of income. The court cannot accept Professor Duggar's computations based upon an assumption that Mr. Courville would work full-time and overtime 15 hours per day and from five to seven days per week on a steady, uninterrupted basis. The only direct earnings information belies such an assumption. Neither can the court accept the invitation of defense counsel to simply utilize the approximately 2¾ months when the plaintiff was employed by Cardinal Wireline Services as a base line for lost income. It would be logical that the winter months, because of inclement weather, would afford less work opportunity than other times of the year. In an effort to stay within the framework of the evidence presented to the court, the undersigned elects to use an average of the 8¾ months earnings immediately prior to the accident reflected in the letter of April 12, 1991 from the Cardinal controller. The combined total of Schlumberger and Cardinal earnings from July 5, 1988 through March 22, 1989 amounted to $12,565.16. This, divided by 8.75 months, would reflect average monthly earnings of $1,436.02. It is from this figure that loss of earnings will be computed.
This court cannot and will not, from the evidence, conclude that it is just and proper to project loss of earnings for Mr. Courville throughout his work life expectancy as a wireline helper. Mr. Courville's attitude toward returning to the work force, as expressed in his testimony, was most unimpressive. He admitted quite frankly that he understood as of July 25, 1990 that he had reached maximum recovery, and that he would have to make some kind of career choices. For some unexplained reason, the company continued to pay him maintenance, and Mr. Courville simply did nothing whatsoever about pursuing some type of career within his physical capabilities. Mr. Courville is an articulate young man who appears to be of at least average intelligence. This is borne out by the testimony of Mr. Hebert. He is definitely a candidate for training in some type of skill which would enable him to keep much better hours at his work than getting up at 4 o'clock in the morning to be in Galveston by 6 or 6:30 A.M., and thereafter work perhaps 15 hours before returning home. He would also be able to make more money than he has been making, according to Mr. Hebert's unrefuted testimony. The court cannot accept Mr. Courville's excuse that he had not been given a "release" form, and therefore he was entitled to simply sit back and do nothing career-wise for an indeterminate period in the future.
With regard to loss of wages, the court will award sixteen months, from March 22, 1989 through July 25, 1990, at $1,436.02 for a total of $22,976.32. In accordance with the testimony of Mr. Hebert, who said that Mr. Courville could obtain an associate degree in electronics, computers, or some other skilled field by taking a two year course, and thereafter earn $1,400.00 to $1,500.00 per month, the court will award an additional 25 months at $1,436.02, for a total of $35,900.50. Additionally, Mr. Hebert felt that the cost of obtaining an associate degree from McNeese, which would be the best option, would amount to a total of $15,000.00, and the court will allow that amount. This should adequately compensate Mr. Courville for lost income, and in addition, leave him equipped to function as a skilled technician with the ability to work regular hours and advance in accordance with his ability and initiative. The total award will be reduced by 15 percent for Mr. Courville's contributing negligence.
To summarize, damages will be awarded as follows:
*940
General Damages ....................................... $175,000.00
Loss of Income (3/22/89-7/25/90) ...................... 22,976.32
Loss of Income (7/25/90-8/25/92) ...................... 35,900.50
Cost of Associate Degree from McNeese ................. 15,000.00
___________
TOTAL.................................... $248,876.82
Less 15% .............................................. 37,331.52
___________
TOTAL AWARD ............................. $211,545.30
E. Interest
In awarding interest, the court again looks to guidance from Ceja v. Mike Hooks, Inc., supra. In that case, the court held that prejudgment interest should be awarded in admiralty cases not as a penalty, but as compensation for the use of funds to which the claimant was rightfully entitled. The court is given discretion to deny prejudgment interest only when there are "peculiar circumstances" making it inequitable to require defendant to pay prejudgment interest. The court finds no such peculiar circumstances in this case. The fault of the employer and vessel owner in this case far outweighed the fault of the plaintiff, and interest will be allowed from July 3, 1989 at the legal rate. This is in keeping with Ceja, where liability was predicated upon both Jones Act negligence and unseaworthiness.
Judgment will be rendered in accordance with the foregoing.
THUS DONE AND SIGNED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3034551/ | FILED
NOT FOR PUBLICATION MAR 05 2010
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
RANJIT SINGH, No. 07-73073
Petitioner, Agency No. A096-487-620
v.
MEMORANDUM *
ERIC H. HOLDER Jr., Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted February 16, 2010 **
Before: FERNANDEZ, GOULD, and M. SMITH, Circuit Judges.
Ranjit Singh, a native and citizen of India, petitions for review of a Board of
Immigration Appeals (“BIA”) order dismissing his appeal from an Immigration
Judge’s (“IJ”) decision denying his application for asylum, withholding of
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
EN/Research
removal, and relief under the Convention Against Torture (“CAT”). We have
jurisdiction under 8 U.S.C. § 1252. Where, as here, the BIA reviews de novo the
IJ’s decision, our review is limited to the decision of the BIA. Garcia-Quintero v.
Gonzales, 455 F.3d 1006, 1011 (9th Cir. 2006). We review for substantial
evidence, Gu v. Gonzales, 454 F.3d 1014, 1018 (9th Cir. 2006), and we deny the
petition.
The BIA denied Singh’s petition for asylum and withholding of removal,
finding that, even assuming Singh had proven past persecution on account of a
protected ground, the Government had successfully rebutted the presumption of a
well-founded fear of future persecution by demonstrating changed country
conditions. Substantial evidence supports the BIA’s finding. See
Gonzalez-Hernandez v. Ashcroft, 336 F.3d 995, 1000 (9th Cir. 2003).
Substantial evidence also supports the BIA’s denial of Singh’s CAT claim
because he failed to establish it was more likely than not that he would be tortured
if he returned to India. See 8 C.F.R. § 1208.16(c)(3)(ii); Singh v. Gonzales, 439
F.3d 1100, 1113 (9th Cir. 2006).
PETITION FOR REVIEW DENIED.
EN/Research 2 07-73073 | 01-03-2023 | 10-13-2015 |
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https://www.courtlistener.com/api/rest/v3/opinions/517470/ | 866 F.2d 103
UNITED STATES of America, Plaintiff-Appellee,v.Travles Russell LANE, Defendant-Appellant.
No. 88-5542.
United States Court of Appeals,Fourth Circuit.
Argued Oct. 7, 1988.Decided Jan. 25, 1989.
Todd Clark Conormon, Asst. Federal Public Defender (William E. Martin, Federal Public Defender on brief), for defendant-appellant.
Dale Jeffrey Stone, Sp. Asst. U.S. Atty. (Office of the Staff Judge Advocate on brief), for plaintiff-appellee.
Before WIDENER, ERVIN and WILKINS, Circuit Judges.
WILKINS, Circuit Judge:
1
Travles Russell Lane, a black male, appeals his conviction of theft of personal property in violation of 18 U.S.C.A. Sec. 661 (West 1976). He contends that he was denied equal protection because the prosecutor used peremptory challenges to strike one black prospective petit juror and one black prospective alternate juror in violation of Batson v. Kentucky, 476 U.S. 79, 106 S. Ct. 1712, 90 L. Ed. 2d 69 (1986). We affirm.
I.
2
In Batson, the Supreme Court ruled that a prosecutor's discriminatory use of peremptory challenges to exclude blacks from a petit jury violated a black defendant's equal protection rights.1 This extended the rule previously enunciated in Swain v. Alabama, 380 U.S. 202, 85 S. Ct. 824, 13 L. Ed. 2d 759 (1965), which required a defendant raising an equal protection claim regarding the jury selection process to demonstrate that the prosecution had systematically excluded a protected group from juries over a period of time. Since Batson, a defendant of a cognizable racial group may assert an equal protection claim solely on the exclusion of a prospective juror of his race from a single petit jury.
3
A defendant has the burden of establishing a prima facie case of discrimination by the prosecutor in the selection of the jury. Batson, 476 U.S. at 93-97, 106 S.Ct. at 1721-23. If the defendant makes a showing sufficient to infer discrimination, the burden shifts to the prosecutor to provide neutral explanations for his use of peremptory challenges. Id. at 97, 106 S.Ct. at 1723. The decision of whether to hold an evidentiary hearing rests within the discretion of the district judge subject to appellate review applying an abuse of discretion standard. See United States v. Garrison, 849 F.2d 103, 106 (4th Cir.1988).
4
The Court in Batson also set forth the method for assessing whether a defendant has presented a prima facie case of discrimination.2 A defendant must illustrate "that he is a member of a cognizable racial group," Batson, 476 U.S. at 96, 106 S.Ct. at 1723, and that the prosecutor has challenged members of his race. Id. He is allowed "to rely on the fact ... that peremptory challenges constitute a jury selection practice that permits 'those to discriminate who are of a mind to discriminate.' " Id. (quoting Avery v. Georgia, 345 U.S. 559, 562, 73 S. Ct. 891, 892, 97 L. Ed. 1244 (1953)). Finally, a defendant must show, based on all "relevant circumstances," that an inference of discrimination has been raised that the prosecutor utilized peremptory challenges to exclude jurors based on their race. The Court provided guidance to trial courts in deciding whether a prima facie case has been established:
5
For example, a 'pattern' of strikes against black jurors included in the particular venire might give rise to an inference of discrimination. Similarly, the prosecutor's questions and statements during voir dire examination and in exercising his challenges may support or refute an inference of discriminatory purpose. These examples are merely illustrative. We have confidence that trial judges, experienced in supervising voir dire, will be able to decide if the circumstances concerning the prosecutor's use of peremptory challenges creates a prima facie case of discrimination against black jurors.
6
Batson, 476 U.S. at 96-97, 106 S.Ct. at 1722-23.II.
7
In the selection of the jury which convicted Lane, the prosecutor used one of his three peremptory challenges to strike William Robinson, a black male. Defense counsel objected to the challenge at the time Robinson was struck, but the district court found no basis for the objection, implicitly concluding that no prima facie case had been established. The prosecutor was therefore not required to give his reason for excluding Robinson. The two remaining peremptory challenges were not exercised by the prosecutor and a jury which included two black jurors was subsequently impaneled.
8
During the selection of an alternate juror, the prosecutor used his one allotted peremptory challenge to strike Lauren Lucas, a black male. Defense counsel, after objecting to the prosecutor's peremptory strike, struck another prospective alternate juror and a third was seated. Although the district judge stated his belief that Lane had failed to make a prima facie showing since the prosecutor had used only one of his three strikes in selecting the jury, he nonetheless questioned the prosecutor on whether he had a neutral reason for the peremptory challenge to prospective alternate juror Lucas. The prosecutor explained that he was seeking a higher educational level for jurors than that of Lucas, who had not completed high school. The court determined that this explanation was satisfactory and refused to conduct an evidentiary hearing. At that time Lane made no request that the prosecutor be required to give his reason for his earlier challenge to Robinson.
9
Lane contends that the district court erred in failing to find that he established a prima facie case of discrimination based on the prosecutor's challenge to Robinson. Lane also asserts that the district court erred in determining that the prosecutor properly articulated a neutral reason for the challenge to Lucas. Finally, Lane argues that the district court abused its discretion in refusing to hold an evidentiary hearing.
III.
10
District court findings regarding whether a prima facie showing has been made, like other findings on discrimination, are entitled to "great deference." Batson, 476 U.S. at 98 n. 21, 106 S. Ct. at 1724 n. 21. Such determinations will not be disturbed by this court unless clearly erroneous. United States v. Tindle, 860 F.2d 125, 129 (4th Cir.1988). Further, this court will not address the question of whether the defendant established a prima facie showing to satisfy Batson where the prosecutor articulated reasons for his strikes. United States v. Woods, 812 F.2d 1483, 1487 (4th Cir.1987).
11
In Woods this court declined to address the question of whether the defendant had established the requisite prima facie showing, and instead, proceeded to examine the reasons articulated by the prosecutor for striking the only black venireman whose exclusion the defendant claimed was based on improper racial considerations. This approach is reasonable since "appellate review should not become bogged down on the question of whether the defendant made a prima facie showing in cases where the district court has required an explanation." Forbes, 816 F.2d at 1010. Here, however, we must determine whether Lane met his prima facie burden since the prosecutor's reason for striking Robinson was never stated. Applying the principles enunciated in Batson, we hold that the district court did not clearly err in finding that Lane failed to raise a prima facie case of discrimination for the challenge to venireman Robinson.
12
As Lane correctly points out, striking only one black prospective juror for a discriminatory reason violates a black defendant's equal protection rights, even when other black jurors are seated and even when valid reasons are articulated for challenges to other black prospective jurors. United States v. David, 803 F.2d 1567, 1571 (11th Cir.1986). However, this does not mean that a prima facie case of discrimination arises every time a prosecutor strikes a black prospective juror. United States v. Chalan, 812 F.2d 1302, 1303 (10th Cir.1987). The defendant must present sufficient evidence to make a prima facie showing and cannot merely rest on the fact that a prosecutor challenged a prospective juror of his same race. United States v. Ratcliff, 806 F.2d 1253, 1256 (5th Cir.1986), cert. denied, 481 U.S. 1004, 107 S. Ct. 1625, 95 L. Ed. 2d 199 (1987).
13
Lane, in objecting to the challenge to Robinson, relied solely on the fact that the prosecutor struck a member of a cognizable racial group to which he belongs. Lane presented no additional evidence of the type suggested in Batson to infer discrimination in the use of the challenge. Clearly the challenge to Robinson, by itself, was insufficient to trigger an inference of discrimination and the district court was not required to request a reason for the challenge. United States v. Ingram, 839 F.2d 1327, 1330 (8th Cir.1988); United States v. Lewis, 837 F.2d 415, 417 (9th Cir.1988).
IV.
14
When the prosecutor challenged prospective alternate juror Lucas, defense counsel once again objected and asserted that a pattern of discrimination had been established. Without finding that a prima facie case had been established, the district court asked the prosecutor to articulate a reason for the strike. The prosecutor stated that he was challenging Lucas because he had not completed high school and "we are looking for a jury that is all in all a little more educated." The district court found that the two strikes were insufficient to show a pattern of discrimination and that the prosecutor had satisfactorily explained the reason for the challenge to Lucas. He further noted that the prosecutor used only one of his three available peremptory challenges in the selection of the petit jury, and that two black jurors were impaneled. Lane argues that the district court erred in accepting this reason, contending that the facially neutral reason was merely pretextual as evidenced by the fact that the prosecutor had earlier accepted a white female juror who, like Lucas, had not finished high school and had struck Robinson, who had 14 years of education.3
15
In the selection of a jury panel, prosecutors and defense counsel use their peremptory challenges depending on many valid factors. For example, although one may be searching for jurors who have a certain characteristic such as a college degree, a juror who did not complete college may nevertheless be accepted because he possesses other desirable characteristics. Numerous factors may influence the decision of a prosecutor and defense counsel, including current and past employment, general appearance and demeanor, previous jury service, and the absence or presence of apparent prejudice. The Court in Batson noted that while prosecutors may not challenge prospective jurors because of their race, they are "ordinarily ... entitled to exercise permitted peremptory challenges 'for any reason at all, as long as that reason is related to [their] view concerning the outcome' of the case to be tried." Batson, 476 U.S. at 89, 106 S.Ct. at 1719 (quoting United States v. Robinson, 421 F. Supp. 467, 473 (D.Conn.1976), mandamus granted sub. nom. United States v. Newman, 549 F.2d 240 (2d Cir.1977)).
16
The district court acceptance of the prosecutor's expressed reason for the challenge to Lucas as neutral was not clearly erroneous. Although Lane contends that the prosecutor's stated reason was pretextual, he made no showing regarding the educational levels of the two other prospective alternate jurors. Moreover, the district court reliance on the prosecutor's acceptance on the jury of two black jurors when he possessed sufficient peremptory challenges to strike them, although not conclusive, weighs heavily in support of the district court finding of no discrimination. See United States v. Montgomery, 819 F.2d 847, 851 (8th Cir.1987); United States v. Dennis, 804 F.2d 1208, 1211 (11th Cir.1986), cert. denied, 481 U.S. 1037, 107 S.Ct.1973, 95 L. Ed. 2d 814 (1987).
17
Lane also urges this court to consider the prosecutor's stated reason for striking Lucas in its review of whether a prima facie case of discrimination has been raised as to Robinson. Since Batson instructs the court to consider all "relevant circumstances," we agree that a prosecutor's stated reason for one challenge may be used to show that a prima facie case of discrimination existed for a prior challenge. Lewis, 837 F.2d at 417. However, in light of all relevant circumstances including the reason given for challenging Lucas, Lane did not establish a prima facie case of discrimination as a result of the challenge to Robinson.
V.
18
Since Lane made no showing that the prosecutor's questions or conduct during voir dire or the exercise of his challenges demonstrated a discriminatory tendency, the district court determination that the peremptory challenge to alternate juror Lucas failed to show a pattern of discrimination likewise was not clearly erroneous. The peremptory challenge to one black prospective petit juror and one black prospective alternate alone is insufficient to establish a pattern. By contrast, a pattern of discrimination may be established by a prosecutor's successive use of peremptory challenges to strike black veniremen. Tindle, 860 F.2d at 128; United States v. Allen, 666 F. Supp. 847, 853 (E.D.Va.1987), aff'd sub nom. United States v. Harrell, 847 F.2d 138, 139 (4th Cir.1988). In Tindle, the prosecutor used five of six challenges against black prospective jurors and no black juror served. Similarly, in Allen, although three black jurors served, a pattern was found where the prosecutor exercised five of six peremptory challenges against black veniremen. Although no mathematical formula can be devised to signal the establishment of a prima facie case, United States v. Clemons, 843 F.2d 741, 746 (3d Cir.1988), the fact that two black jurors were seated on Lane's jury and the fact that the prosecutor exercised only one of his three peremptory challenges tends to negate a motive to discriminate.
VI.
19
We hold that the district court did not clearly err in finding that no prima facie case of discrimination had been raised in the challenge to venireman Robinson. The district court acceptance of the neutral reason articulated by the prosecutor for the challenge to prospective alternate juror Lucas likewise was not clearly erroneous. Finally, we hold that the district court did not abuse its discretion in refusing to conduct an evidentiary hearing.
20
AFFIRMED.
1
Although Batson involved a state prosecution and application of the fourteenth amendment, the same limitations are imposed on federal prosecutors by the fifth amendment. See United States v. Forbes, 816 F.2d 1006, 1009 n. 6 (5th Cir.1987)
2
The Court borrowed from its previous cases involving the showing required for a prima facie case of discrimination in the selection of a jury venire. See Castaneda v. Partida, 430 U.S. 482, 494-95, 97 S. Ct. 1272, 1280-81, 51 L. Ed. 2d 498 (1977); Alexander v. Louisiana, 405 U.S. 625, 631-32, 92 S. Ct. 1221, 1225-26, 31 L. Ed. 2d 536 (1972)
3
Lane's counsel mistakenly represented to the court during oral argument that the alternate juror was not called upon to serve as a member of the petit jury. If this had been the case Lane would not have been prejudiced by the peremptory challenge to Lucas, regardless of the stated reason. However, the record reveals that the alternate juror was indeed impaneled as a member of the petit jury just prior to the commencement of the trial | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/672361/ | 27 F.3d 90
UNITED STATES of America, Plaintiff-Appellee,v.Kent NEAL, Defendant-Appellant.
No. 93-5145.
United States Court of Appeals,Fourth Circuit.
Argued Feb. 11, 1994.Decided June 13, 1994.
ARGUED: Clinton Wayne Smith, Charleston, WV, for appellant. John Kirk Brandfass, Asst. U.S. Atty., Charleston, WV, for appellee.
ON BRIEF: Michael W. Carey, U.S. Atty., Charleston, WV, for appellee.
Before HALL and MICHAEL, Circuit Judges, and OSTEEN, United States District Judge for the Middle District of North Carolina, sitting by designation.
Reversed and remanded by published per curiam opinion.
OPINION
PER CURIAM:
1
This appeal apparently presents a question of first impression both for this Court and for the remaining federal circuits. The question formally presented is whether the trial judge erred in finding, pursuant to U.S.S.G. Secs. 4B1.1 and 4B1.2(2) that the defendant, Kent Neal, was a career offender by virtue of having been convicted of two felony offenses under Sec. 220.06 of the New York Penal Code, a drug possession statute. The underlying issue concerns the correct interpretation of the New York law, a matter that we review de novo. The trial judge found that Neal's convictions under the New York statute qualified him as a career criminal. We now reverse.
I.
2
The relevant facts of this appeal are straightforward. On November 16, 1992, Kent Neal pled guilty to distribution of crack cocaine, in violation of 21 U.S.C. Sec. 841(a)(1). Sentencing was scheduled for January 19, 1993. The criminal history section of the presentence report delivered to counsel in late December listed twenty-one (21) adult criminal convictions, all under New York law. Nine of the convictions were for possession or attempted possession of controlled substances. The probation officer calculated the base offense level at 14, with a two-level reduction for acceptance of responsibility. Neal's criminal history put him in a category of VI, yielding a guideline range of imprisonment between 30 and 37 months. Neither the government nor Neal filed objections to the report.
3
At the time of sentencing, the district court announced that it believed that the convictions listed in the presentence report1 rendered Neal subject to the "career offender" provision of the sentencing guidelines, see U.S.S.G. Sec. 4B1.1 (Nov.1992), and continued the hearing so that each side could address the issue. After hearing arguments, the court found and concluded that
4
these offenses are such as to qualify as possession with intent to distribute either on the face of it in Subsection A [sic; subsection 1] of the statute or as ... entirely consistent with the possession of the other substances condemned by that statute is a--of a significant level to carry with it the presumed intent to distribute such substances.
5
(J.A. 30-31.) On this basis, the court raised Neal's offense level to 32 with a criminal history category of VI, as required by U.S.S.G. Sec. 4B1.1. The court next reduced the offense level to 29 for acceptance of responsibility and found the guideline range to be 151 to 188 months. The court then sentenced Neal to 151 months of imprisonment, 5 years of supervised release, no fine, and a $50 special assessment. Neal now appeals.
II.
6
Section 4B1.1 of the U.S. Sentencing Guidelines provides:
7
A defendant is a career offender if (1) the defendant was at least eighteen years old at the time of the instant offense, (2) the instant offense of conviction is a felony that is either a crime of violence or a controlled substance offense, and (3) the defendant has at least two prior felony convictions of either a crime of violence or a controlled substance offense.
8
U.S.S.G. Sec. 4B1.1 (Nov.1992). There is no question that Neal was eighteen or older at the time of the instant offense or that the instant offense is a controlled substance offense. The only issue is whether Neal has been convicted of the requisite two prior offenses.
9
Section 4B1.2(2) defines "controlled substance offense" as
10
an offense under a federal or state law prohibiting the manufacture, import, export, distribution, or dispensing of a controlled substance (or a counterfeit substance) or the possession of a controlled substance (or a counterfeit substance) with intent to manufacture, import, export, distribute, or dispense.
11
U.S.S.G. Sec. 4B1.2(2) (emphasis added). The commentary to that section makes no reference to this definition beyond stating that it includes aiding and abetting, conspiring, and attempting to commit the offense. Id. application note 1. Presumably, then, the definition means exactly what it says; thus, simple possession of drugs is excluded from the category "controlled substance offense." Publications issued by the U.S. Sentencing Commission take this position, which has also been adopted by several circuits. U.S. Sentencing Commission, Most Frequently Asked Questions About the Sentencing Guidelines 28 (6th ed.1992); United States v. Vea-Gonzales, 999 F.2d 1326, 1329 n. 1 (9th Cir.1993); United States v. Gaitan, 954 F.2d 1005, 1011 (5th Cir.1992); United States v. Galloway, 937 F.2d 542, 549 (10th Cir.1991); United States v. Tremble, 933 F.2d 925, 929 (11th Cir.1991).
12
In light of the above, the underlying question in this case becomes "Were Neal's prior convictions under New York law for simple possession or possession with intent to distribute, etc.?" If either conviction was for simple possession, the career offender enhancement does not apply to Neal's case and he must be resentenced.
13
The New York statute under which Neal was convicted provides:
14
A person is guilty of criminal possession of a controlled substance in the fifth degree when he knowingly and unlawfully possesses:
15
1. a controlled substance with intent to sell it; or
16
2. one or more preparations, compounds, mixtures or substances of an aggregate weight of one-half ounce or more containing a narcotic preparation; or
17
3. fifty milligrams or more of phencyclidine; or
18
4. one or more preparations, compounds, mixtures or substances of an aggregate weight of one-quarter ounce or more containing concentrated cannabis ...; or
19
5. five hundred milligrams or more of cocaine.
20
New York Penal Law Sec. 220.06 (McKinney). There is no evidence before this Court, nor apparently before the trial court, as to exactly which subsection applied to Neal's two convictions.2
21
The government argues, as it did before the district court, that although subsection 1 plainly requires intent to distribute as an element of the offense, one can infer from the amounts specified in the remaining subsections that they too require such an element. In contrast, Neal argues as he did before the lower court that as a matter of simple statutory interpretation, the facts that intent to distribute is required only in subsection 1 and that the subsections are listed disjunctively mean that the remaining subsections punish only simple possession. We find this position to be the correct one.
22
Neal analogizes his case to cases decided by this Court that deal with the "crimes of violence" section of the career offender enhancement provision. In United States v. Wilson, 951 F.2d 586 (4th Cir.1991), cert. denied, --- U.S. ----, 112 S. Ct. 2294, 119 L. Ed. 2d 218 (1992), this Court adopted a "categorical" (as opposed to a "particularized") approach to determining whether an offense qualifies as a "crime of violence" for purposes of applying Sec. 4B1.1. In doing so, we stated that
23
the plain language of the Guidelines contemplates a legal rather than a factual approach to determining which offenses qualify as crimes of violence.... [T]he Guidelines' definition clearly mandates a categorical approach by focusing the inquiry on the elements of the offense rather than the particular conduct involved. Thus, the sentencing court's task is reduced to a simple legal inquiry--the court simply reads the statutory or common law definitions of the defendant's prior felonies to see whether they list as an element "the use, attempted use, or threatened use of physical force."
24
Id. at 588. If the statutory definition of the offense does not use these terms, then the trial court may look to the conduct described in the indictment against the defendant (but no further) in determining if the offense presented a serious potential risk of physical injury to another. United States v. Johnson, 953 F.2d 110, 113 (4th Cir.1991).
25
When we take the statute at face value and give effect to every phrase in it as standard statutory interpretation requires, it clearly indicates that the intent to distribute requirement is limited to the offense spelled out in subsection 1. None of the subsections that follow "list as an element" the intent to distribute. It is normally presumed that a legislature intends for the plain meaning of its laws to control. See United States v. Tremble, 933 F.2d 925, 929-30 (11th Cir.1991).
26
This conclusion ends our inquiry under Wilson. If, however, we were to look to sources outside the statute, those sources would only strengthen our conclusion, as they indicate that the New York legislature clearly meant to limit the intent to distribute requirement to subsection 1.
27
The New York Attorney General has described the state's drug laws as "a comprehensive, detailed scheme," 1990 N.Y.Op.Atty.Gen. (Inf.) 1143, in which possession of controlled substances is prohibited and punished in a series of statutes separate and distinct from those dealing with sales of controlled substances. Compare New York Penal Law Secs. 220.03--220.21 (possession offenses) with New York Penal Law Secs. 220.31--220.43 (sales offenses). Cf. 21 U.S.C.A. Sec. 841(a)(1) (West Supp.1993) (punishing both possession and distribution in same provision). Within the offense of possession, there are six degrees. The lowest degree, seven, represents the basic offense.
28
New York Penal Law Sec. 220.03. According to the practice commentary:
29
The higher degrees are premised on certain aggravating factors. The principal aggravating factor ... is the weight of the particular drug or class of drugs which is possessed.
30
A second commonly utilized aggravating factor requires the possession of any quantity of the controlled substance to be "with intent to sell it."
31
For certain non-narcotic drugs, the possession with intent to sell ... is coupled with a requirement of proving that the defendant has previously been convicted of [a drug offense].
32
In other instances, an amount of the drug required to be possessed with the intent to sell is specified. The amount specified is understandably less than the amount required to constitute the crime solely by possession.
33
New York Penal Law article 220 supplementary practice commentaries (McKinney Supp.1994) (emphasis added) (citations omitted). The detailed nature of the drug possession statutes has also been recognized by New York's highest court. See People v. Ryan, 82 N.Y.2d 497, 503, 605 N.Y.S.2d 235, 626 N.E.2d 51 (1993) ("The primary distinctions between one grade or another relate to the type and weight of the controlled substance, and in some instances the existence of an intent to sell ....") (emphasis added).
34
These sources make it clear that the intent to distribute requirement is only one of several factors considered by the New York legislature in determining the appropriate punishments for illegal drug possession. It is equally clear that the legislature arrived at a judgment that possession of drugs with intent to sell is a worse offense than simple possession; hence the commentary's remark that the amount required for possession with intent to sell is "understandably less" than the amount required for simple possession. To read the intent to distribute requirement of Sec. 220.06(1) into the subsections that follow, as the trial court did and the government requests this Court to do, would obliterate the New York legislature's careful work.
35
In light of the above discussion, we cannot find that Neal was properly sentenced under the career offender section of the sentencing guidelines. Therefore, we reverse and remand this case for resentencing. At that time, the trial court will determine under which subsection(s) of New York Penal Law Sec. 220.06 Neal was previously convicted. Unless each conviction falls under subsection 1, the court may not resentence Neal as a career offender.
36
REVERSED AND REMANDED.
1
The two convictions at issue are described in paragraphs 32 and 33 of the presentence report. Paragraph 32 explains that in New York on October 30, 1989, Neal was charged with criminal possession of controlled substances. He pled guilty to attempted criminal possession of controlled substances and was sentenced to one year imprisonment. Paragraph 33 explains that in New York on November 9, 1989, Neal was charged with three drug offenses. He again pled guilty to attempted criminal possession of controlled substances and was sentenced to one year imprisonment. (J.A. 17.)
2
The presentence report did not specify under which New York statute Neal was convicted but stated only that he pled guilty to attempted criminal possession of controlled substances. The parties understood the applicable statute to be New York Penal Law Sec. 220.06, Govt's Br. 4; they did not, however, specify under which specific subsection Neal was convicted. Apparently, Neal's "rap sheets," which may have specified the subsection, were before the parties at the hearing, although the actual indictments were not offered into evidence; none of these documents were included in the record on appeal | 01-03-2023 | 04-16-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/988350/ | Electronically Filed
Intermediate Court of Appeals
CAAP-10-0000137
03-JUL-2013
09:37 AM | 01-03-2023 | 07-03-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/598159/ | 983 F.2d 1057
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.UNITED STATES OF AMERICA, Plaintiff-Appellee,v.Sharon D. BASKERVILLE, Defendant-Appellant.
No. 91-7636.
United States Court of Appeals,Fourth Circuit.
Submitted: September 21, 1992Decided: January 11, 1993
Appeal from the United States District Court for the Eastern District of Virginia, at Richmond. Richard L. Williams, Senior District Judge. (CR-90-47-R)
Sharon D. Baskerville, Appellant Pro Se.
Roger William Frydrychowski, Office of the United States Attorney, Richmond, Virginia, for Appellee.
E.D.Va.
Affirmed.
Before WILKINS and HAMILTON, Circuit Judges, and SPROUSE, Senior Circuit Judge.
PER CURIAM:
OPINION
1
Sharon D. Baskerville appeals from the district court's order denying her second Motion for Reconsideration of an earlier order concerning a request for Rule 35(b)1 relief. Fed. R. Crim. P. 35(b). Because the district court was without authority to consider Baskerville's motion, we affirm.
I.
2
Baskerville pled guilty to one count of defrauding a federally insured financial institution in violation of 18 U.S.C.A. § 1344 (West Supp. 1992) (count (1)), and two counts of embezzling and misapplying funds of the institution while employed as a branch manager in violation of 18 U.S.C.A. § 657 (West 1976) (counts (2) and (3)). Counts (1) and (3) were subject to sentencing under the sentencing2 guidelines, while count (2) described a pre-guidelines offense. Baskerville was sentenced in October 1990 to fifty-seven months imprisonment on the guidelines offenses, and received a term of five years (the statutory maximum) on the pre-guidelines offense, in addition to supervised release and a special assessment.
3
On December 29, 1990, Baskerville filed an informal request for modification of her sentence. The district court construed her request as a motion under Rule 35, and partially granted the requested relief by changing the sentence imposed on the pre-guidelines offense to a sentence under 18 U.S.C.A. § 4205(b)(1) (West Supp. 1992) (repealed 1984),3 and by directing the parole commission to consider Baskerville eligible for parole upon completion of the sentences imposed in connection with the guidelines offenses. The Government then filed a timely motion for reconsideration, which resulted in the court's correction of its order to change the sentence imposed on count (2) from a sentence under § 4205(b)(1) to a sentence under4 § 4205(b)(2).
4
Twenty-one days later Baskerville filed a Motion for Reconsideration which the court denied for want of jurisdiction. Baskerville then filed another Motion for Reconsideration which the district court likewise denied, but not without purporting to retain jurisdiction to clarify its earlier orders for the parole commission's benefit. Baskerville then filed the present appeal.
II.
5
This case is controlled by our decision in United States v. Breit, 754 F.2d 526, 530 (4th Cir. 1985), in which we held that an order disposing of a timely Rule 35(b) motion becomes final at the end of the 10-day appeal period, after which time the district court has no authority to reconsider or vacate its decision. Although the government's timely Motion for Reconsideration tolled the initial appeal period in this case, Baskerville's first and second Motions for Reconsideration were filed well beyond the 10-day appeal period following the district court's disposition of the government's motion, thus depriving the court of jurisdiction. Not only did the district court lack authority to consider Baskerville's Motions for Reconsideration, it also lacked authority, pursuant to Breit, to retain jurisdiction for purposes of clarifying its earlier orders.5 For these reasons, we affirm the district court's denial of Baskerville's second Motion for Reconsideration. We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the Court and argument would not aid the decisional process.
AFFIRMED
1
This case is controlled by former Rule 35(b)
2
The offenses occurred after November 1, 1987, the effective date of the federal sentencing guidelines
3
Section 4205(b)(1), which was repealed upon enactment of the sentencing guidelines effective November 1, 1987, provided that a sentencing court could "designate in the sentence of imprisonment imposed a minimum term at the expiration of which the prisoner shall become eligible for parole...."
4
Section 4205(b)(2), which was also repealed upon enactment of the sentencing guidelines, provided that "the court may fix the maximum sentence of imprisonment to be served in which event the court may specify that the prisoner may be released on parole at such time as the Commission may determine
5
We note that if Baskerville was concerned with the parole commission's interpretation of those earlier orders, she had the option of filing a petition under 28 U.S.C.A. § 2241 (West 1971) in the district court with jurisdiction over her person. Chatman-Bey v. Thornburgh, 864 F.2d 804 (D.C. Cir. 1988) (in banc) (challenges to parole commission decisions properly brought under § 2241) | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/669682/ | 23 F.3d 888
UNITED STATES of America, Plaintiff-Appellee,v.Thomas John MAYBECK, Defendant-Appellant.
No. 92-6449.
United States Court of Appeals,Fourth Circuit.
Argued Dec. 6, 1993.Decided May 6, 1994.
ARGUED: John Jacob Hoeffner, Supervising Atty., Appellate Litigation Clinical Program, Georgetown University Law Center, Washington, DC, for appellant. Robert James Conrad, Jr., Asst. U.S. Atty., Charlotte, NC, for appellee. ON BRIEF: Steven H. Goldblatt, Thomas D. Bunton, Student Counsel, Mark A. Racanelli, Student Counsel, Appellate Litigation Clinical Program, Georgetown University Law Center, Washington, DC, for appellant. Thomas John Maybeck, appellant pro se. Jerry W. Miller, U.S. Atty., Charlotte, NC, for appellee.
Before ERVIN, Chief Judge, MICHAEL, Circuit Judge, and SPROUSE, Senior Circuit Judge.
Reversed and remanded for resentencing by published opinion. Senior Judge SPROUSE wrote the opinion, in which Chief Judge ERVIN and Judge MICHAEL joined.OPINION
SPROUSE, Senior Circuit Judge:
1
Thomas Maybeck pled guilty to two counts of bank robbery and one count of unlawful possession of a firearm in violation of federal law. After he had filed a plea agreement but before he had been sentenced, Maybeck, during a presentencing interview, mischaracterized a previous New York state burglary conviction as one involving violence. The probation officer, including that conviction as one of two predicate felonies, calculated that Maybeck was a career offender, and the district court sentenced him on that basis without objection from either Maybeck or his counsel. After sentencing, however, Maybeck filed a motion to vacate, set aside, or correct his sentence pursuant to 28 U.S.C. Sec. 2255. The district court dismissed the motion, finding that Maybeck had failed to show cause for his procedural default, as required under United States v. Frady, 456 U.S. 152, 167-68, 102 S.Ct. 1584, 1594-95, 71 L.Ed.2d 816 (1982).
2
Maybeck appeals. He contends that the Frady rule1 does not apply to a collateral attack on a sentence imposed after a guilty plea. We disagree but hold that although such an appeal is governed by the Frady rule, the appeal is also subject to the "actual innocence" exception to the "cause and prejudice" requirement of Wainwright v. Sykes, 433 U.S. 72, 97 S.Ct. 2497, 53 L.Ed.2d 594 (1977), and Frady. Since the record conclusively shows that Maybeck was actually innocent of one of the predicate requirements for classification as a career offender, we reverse and remand with instructions.
3
* On October 3, 1989, Thomas Maybeck was charged in two separate indictments in the United States District Court for the Western District of North Carolina with several bank robbery offenses stemming from his robberies of a savings and loan in Charlotte, North Carolina, on two different occasions. In January 1990, Maybeck and the government entered into a plea agreement in which Maybeck pled guilty to two counts of bank robbery in violation of 18 U.S.C. Sec. 2113(a) and one count of unlawful possession of a firearm in violation of 18 U.S.C. Sec. 922(g), in exchange for the government's dismissal of the other counts in the indictments. The parties stipulated that under the Sentencing Guidelines,2 the combined offense level for these crimes was 30. The plea agreement also stated that Maybeck was to be sentenced as a career offender, that the applicable criminal history category was VI, and that the parties would waive the Presentence Report. Criminal history worksheets, which were attached to the plea agreement and which assumed career offender status without explanation, apparently provided the basis for the stipulation that Maybeck was a career offender.
4
After the plea agreement had been filed, probation officer David Waddell met with Maybeck and asked him if his record, as indicated on the pretrial services report, was complete. Maybeck said, evidently for the first time, that besides the convictions listed on the report,3 he had also been convicted of an armed burglary in 1973. As it turned out, Maybeck's description of this 1973 crime as an armed burglary was erroneous. He was actually convicted under the laws of New York of attempted third degree burglary of a drug store.4 Nevertheless, incorporating the mischaracterized 1973 armed burglary conviction into the worksheet, Waddell calculated Maybeck's criminal history category and determined that Maybeck had 10 criminal history points, which would place him in criminal history category V. Because Maybeck was designated a career offender, however, he was placed in criminal history category VI, U.S.S.G. Sec. 4B1.1, and his sentence was calculated accordingly.
5
At the sentencing hearing on February 1, 1990, the district court determined that Maybeck had entered his guilty plea knowingly and voluntarily and accepted the plea agreement. Based upon an offense level of 30 and a criminal history category of VI, the district court determined that the applicable Guideline range was 168-210 months and imposed a sentence of 198 months. Maybeck did not object to his sentence at the sentencing hearing or appeal his sentence.5
6
Later, however, Maybeck filed a Sec. 2255 motion to vacate, set aside, or correct his sentence on the grounds that he had been improperly sentenced as a career offender and that he had not knowingly and voluntarily entered his guilty plea. The district court ordered a hearing and appointed counsel to represent Maybeck. After the hearing, the magistrate recommended that Maybeck's Sec. 2255 motion be granted and that his convictions, as well as the dismissals of the other charges, be vacated.
7
On February 24, 1992, the district court declined to accept the magistrate's recommendation and dismissed Maybeck's motion. The court found that Maybeck's failure to raise his claim that he was sentenced incorrectly as a career offender at his sentencing hearing was a procedural default, and his failure to raise the issue by direct appeal constituted a second procedural default. It ruled that he failed to show cause for these defaults under the rule of United States v. Frady, 456 U.S. 152, 167-68, 102 S.Ct. 1584, 1594-95, 71 L.Ed.2d 816 (1982).6 Maybeck appeals, and we review the district court's conclusions of law de novo. United States v. Williams, 977 F.2d 866, 869 (4th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1342, 122 L.Ed.2d 725 (1993).
II
8
In order to proceed on a Sec. 2255 motion "based on trial errors to which no contemporaneous objection was made, a convicted defendant must show both (1) 'cause' excusing his procedural default, and (2) 'actual prejudice' resulting from the errors of which he complains." Frady, 456 U.S. at 167-68, 102 S.Ct. at 1594. The government contends that Maybeck has failed to show cause or prejudice for his procedural default. Maybeck, however, urges us to follow the approach of the Second Circuit in United States v. Corsentino, 685 F.2d 48, 51 (2d Cir.1982), in which the court reasoned that the circumstances surrounding unappealed guilty pleas are totally different from those presented in Frady. The Second Circuit granted the defendant's motion to have his sentence vacated following a guilty plea without imposing the Frady requirements. Although we have not previously ruled on this issue, we now hold that the Frady cause and prejudice standard applies to cases like Maybeck's: collateral challenges to unappealed guilty pleas. The Third Circuit, considering a similar case in United States v. Essig, 10 F.3d 968, 979 (3d Cir.1993), reasoned:
9
If defendants could routinely raise, in a Sec. 2255 collateral proceeding, errors in sentencing not raised on direct appeal which the sentencing court had not had an opportunity to correct, Congress's intent of encouraging direct appellate review of sentences under the Sentencing Guidelines would be frustrated. Moreover, the Federal Rules of Criminal Procedure now plainly set out the procedure that must be used for challenges to presentencing reports and sentencing procedures.
10
See also Reid v. United States, 976 F.2d 446, 447-48 (8th Cir.1992), cert. denied, --- U.S. ----, 113 S.Ct. 1351, 122 L.Ed.2d 732 (1993); Bateman v. United States, 875 F.2d 1304, 1307 (7th Cir.1989); Williams v. United States, 805 F.2d 1301, 1306-07 (7th Cir.1986), cert. denied, 481 U.S. 1039, 107 S.Ct. 1978, 95 L.Ed.2d 818 (1987). Agreeing that this reasoning applies to attacks on sentences following guilty pleas, we find that the Frady cause and prejudice standard applies here.
11
There is no question, however, that on the record we review, Maybeck is actually innocent of being a career offender as defined in Sec. 4B1.1 of the Guidelines:
12
A defendant is a career offender if (1) the defendant was at least eighteen years old at the time of the instant offense, (2) the instant offense of conviction is a felony that is either a crime of violence or a controlled substance offense, and (3) the defendant has at least two prior felony convictions of either a crime of violence or a controlled substance offense.
13
(Emphasis added). Maybeck has only one prior felony conviction that was a crime of violence,7 and he has none that were controlled substance offenses.8
14
In a different context, the United States Supreme Court has recognized that it is an unacceptable deviation from our fundamental system of justice to automatically prevent the assertion of actual innocence simply because a defendant has not observed procedural avenues available to him. In Engle v. Isaac, 456 U.S. 107, 135, 102 S.Ct. 1558, 1575-76, 71 L.Ed.2d 783 (1982), the Supreme Court said that since the concepts of cause and prejudice are not rigid, but "take their meaning from ... principles of comity and finality...., [i]n appropriate cases those principles must yield to the imperative of correcting a fundamentally unjust incarceration.... [W]e are confident that victims of a fundamental miscarriage of justice will meet the cause-and-prejudice standard." Id. In Murray v. Carrier, 477 U.S. 478, 496, 106 S.Ct. 2639, 2649-50, 91 L.Ed.2d 397 (1985), the Court, although cautioning that it would not always be true, instructed that "where a constitutional violation has probably resulted in the conviction of one who is actually innocent, a federal habeas court may grant the writ even in the absence of a showing of cause for the procedural default." While recognizing that the "actual innocence" exception does not translate easily into the sentencing phase of a capital trial, the Supreme Court has applied it in those cases. Sawyer v. Whitley, --- U.S. ----, ----, 112 S.Ct. 2514, 120 L.Ed.2d 269 (1992); Dugger v. Adams, 489 U.S. 401, 410-12 n. 6, 109 S.Ct. 1211, n. 6, 103 L.Ed.2d 435 (1989); Smith v. Murray, 477 U.S. 527, 537, 106 S.Ct. 2661, 2667-68, 91 L.Ed.2d 434 (1986). The Supreme Court has not, however, applied the exception in non-capital sentencing cases,9 although two Courts of Appeals have done so. Mills v. Jordan, 979 F.2d 1273, 1279 (7th Cir.1992) ("actual innocence exception applies to habitual offender proceedings ... whether or not they involve the possibility of capital punishment"); Jones v. Arkansas, 929 F.2d 375, 381 & n. 16 (8th Cir.1991) (defendant's claim that he was sentenced under habitual offender statute that did not apply to him came within actual innocence exception to cause and prejudice rule for habeas petitioners). See also Smith v. Collins, 977 F.2d 951, 959 (5th Cir.1992) (assuming, without deciding, that actual innocence exception applies to non-capital sentencing procedures), cert. denied, --- U.S. ----, 114 S.Ct. 97, 126 L.Ed.2d 64 (1993); cf. Waring v. Delo, 7 F.3d 753, 757 (8th Cir.1993) (cautioning that "actual innocence exception in a non-capital sentencing case must be defined by a narrow, objective standard"). But see United States v. Richards, 5 F.3d 1369, 1371 (10th Cir.1993) (a person cannot be actually innocent of a non-capital sentence); Higgins v. Smith, 991 F.2d 440, 441 (8th Cir.1993) (questioning whether, after Sawyer, Jones is still good law in the context of a non-capital case); United States ex rel. Henderson v. Thieret, 671 F.Supp. 1193, 1201 (N.D.Ill.1987) (holding that "Smith v. Murray has no general application beyond capital cases though the proposition is not free from doubt"), aff'd, 859 F.2d 492 (7th Cir.1988), cert. denied, 490 U.S. 1009, 109 S.Ct. 1648, 104 L.Ed.2d 163 (1989).
15
The government urges that the actual innocence defense is inapplicable here because it applies only to death penalty habeas challenges otherwise procedurally barred. We disagree. Except for the obvious difference in the severity of the sentences, we see little difference between holding that a defendant can be innocent of the acts required to enhance a sentence in a death case and applying a parallel rationale in non-capital cases. The more difficult conceptual barrier was overcome by the Supreme Court in Smith v. Murray, 477 U.S. 527, 537, 106 S.Ct. 2661, 2667-68, 91 L.Ed.2d 434 (1986), and Dugger v. Adams, 489 U.S. 401, 410-12 n. 6, 109 S.Ct. 1211, 1217-18 n. 6, 103 L.Ed.2d 435 (1989), when it applied to sentencing review the same rationale applied to the habeas review of convictions of defendants who were actually innocent. In our view, the reasoning of Smith and Dugger logically extends to non-capital sentencing enhancement cases. In capital sentencing cases, the jury has determined guilt, and when aggravating factors are present, the sentence is enhanced to one of death. In non-capital enhancement cases, the length of a defendant's sentence may be aggravated by factors specified by statute or the Guidelines. Here, for example, the Guidelines state that the defendant's commission of two prior felonies with certain characteristics would raise him to career offender status. Hence, a defendant in either a capital or non-capital case would, unless excepted from the cause and prejudice requirement, suffer the same general consequence (an enhanced sentence) from being held responsible for an act of which he or she is actually innocent.
16
As the Eighth Circuit said in Jones, 929 F.2d at 381, "[i]t would be difficult to think of one who is more 'innocent' of a sentence than a defendant sentenced under a statute that by its very terms does not even apply to the defendant." In Jones, the defendant had been erroneously sentenced under a habitual offender statute that was not in effect at the time he had committed his crime. Although the habitual offender provisions here are inapplicable for a different reason than in Jones, both defendants were sentenced under laws that should not have been applied to them, and the same principles apply.
17
Circumstances of a case may dictate exceptions to the actual innocence rule. We agree with the government, for example, that the actual innocence exception in non-capital cases should not be available to a defendant who, although actually innocent of committing an aggravating act, was not prejudiced by its inclusion in the sentencing calculus. See Sawyer, --- U.S. at ----, 112 S.Ct. at 2525 (Court narrowed the actual innocence defense by holding that "petitioner has failed to show by clear and convincing evidence that but for constitutional error at his sentencing hearing, no reasonable juror would have found him eligible for the death penalty"); Smith v. Collins, 977 F.2d 951, 959 (5th Cir.1992) ("actual innocence in a non-capital sentencing case can be no less stringent than the Supreme Court's formulation of actual innocence in capital sentencing").
18
The government asserts that Maybeck was not prejudiced by the denial of his Sec. 2255 petition because he would have received an equivalent or greater sentence even if he had not been categorized as a career offender. This is not apparent from the record, however. Under the agreement negotiated between Maybeck and the government, Maybeck agreed to plead guilty to two counts of bank robbery and one count of unlawful possession of a firearm. Even if he had pled guilty to all of the counts alleged in the indictment, the maximum sentence he could have received is still less than the minimum sentence for a career offender in the same circumstances; thus, the prejudice caused by his career offender designation is apparent. Specifically, Maybeck's Guideline range for the two armed bank robberies and the Sec. 922(g) charge would be 84-105 months.10 Adding the 60 month mandatory sentence for the Sec. 924(g) charge (and assuming the court would have imposed the maximum sentence for the first three charges), his maximum sentence would have been only 165 months. As a career offender, he was exposed to a minimum of 168 months.11
19
Again, assuming Maybeck would have received the maximum sentence for the crimes for which he was indicted, he would have the benefit of only a three-months shorter sentence, but we do not know if the district court would have sentenced him to the maximum. There is no dispute, however, that he was innocent of one of the convictions used to determine that he was a career offender and he was improperly sentenced as such.
20
One of the government's other arguments is persuasive, however. The government urges that it would be prejudiced by a remand either for a new sentencing or for a new trial. It argues that the passage of time, the FBI's routine destruction of evidence, and fading memories of witnesses would handicap a prosecution. It contends that a remand simply for resentencing would also be prejudicial to its position, since it relinquished the opportunity to prosecute Maybeck on other counts when the plea agreement was negotiated. It is no overstatement to say that Maybeck has not been a model citizen; he has been incarcerated for a good part of his life and has admitted to at least six crimes and two prison escapes. The government's argument that it should not be inappropriately prejudiced in protecting the society at large from demonstrated criminal activity is persuasive, particularly under the circumstances represented here. On the other hand, even though Maybeck himself is in a large sense responsible for his being counted a career criminal, that does not completely outweigh the objective of protecting defendants from sentencing based on elements of crimes for which they are conclusively innocent. We think in this case both vital concerns can be accommodated, at least in part, by returning the parties as nearly as possible to their pre-plea agreement positions. The case is, therefore, reversed and remanded for resentencing, but after entertaining the parties' positions, the district court may, in its discretion, accept the guilty plea and resentence, or refuse to accept and vacate the guilty plea and order Maybeck and the government to enter into a new agreement. In the latter instance, if the parties fail to reach agreement, they should be ordered to proceed to trial on an appropriate indictment.
21
REVERSED AND REMANDED FOR RESENTENCING.
1
The Frady rule is that a petitioner who has defaulted procedurally in seeking correction of the errors about which he complains in a collateral proceeding must show cause and prejudice with respect to the default. Frady, 456 U.S. at 167-68, 102 S.Ct. at 1594-95
2
Maybeck was sentenced pursuant to the 1988 version of the United States Sentencing Commission Guidelines Manual
3
The pretrial services report indicated that Maybeck had been convicted of drug possession in 1973, for which he received a 30 day sentence; robbery in 1973, for which he received a one year sentence; attempted armed robbery and assault with a deadly weapon with intent to kill or inflict serious injury in 1977, for which he received a sentence of 10-15 years; and two escapes in 1981 and 1983, for which he received sentences of 6-12 months and 1 year, respectively
4
"A person is guilty of burglary in the third degree when he knowingly enters or remains unlawfully in a building with intent to commit a crime therein." N.Y.Penal Law Sec. 140.20 (McKinney 1987). Third degree burglary does not include the element of being armed with a deadly weapon, which is second degree burglary. Id. at Sec. 140.25
5
He did file an unsuccessful motion to correct or reduce his sentence pursuant to Federal Rule of Criminal Procedure 35
6
See supra note 1
7
A crime of violence is:
[A]n offense that has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or any other offense that is a felony and that by its nature involves a substantial risk that physical force against the person or property of another may be used in committing the offense.... Conviction for burglary of a dwelling would be covered; conviction for burglary of other structures would not be covered.
U.S.S.G. Sec. 4B1.2(1) and comment n. 1.
The parties do not dispute that Maybeck was not convicted of armed burglary in 1973. The government argues, however, that at the time Maybeck was sentenced, it would have been permissible for the government to argue that his third degree burglary conviction was a crime of violence, making Maybeck a career offender. Under United States v. Wilson, 951 F.2d 586, 588 (4th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 2294, 119 L.Ed.2d 218 (1992), a proper inquiry, for sentencing purposes, into a defendant's prior convictions should focus on the elements of the offense as opposed to the actual conduct of the defendant. The government argues that since Maybeck was sentenced in 1989, two years before Wilson, a conduct-based inquiry would still be permissible. As the magistrate pointed out in his Memorandum and Recommendation, however, it is unclear that the government could have argued that the conduct underlying the attempted third degree burglary of the drug store made it a crime of violence, since it does not appear that Maybeck actually possessed a weapon or threatened the use of physical force at the time.
The other arguments that the government makes in support of its claim that Maybeck would have been sentenced as a career offender if he had been convicted of all counts at trial are similarly unsupported by the record.
8
The definition of "controlled substance offense" includes:
[M]anufacturing, importing, distributing, dispensing, or possessing with intent to manufacture, import, distribute, or dispense, a controlled substance (or a counterfeit substance). This definition also includes aiding and abetting, conspiring, or attempting to commit such offenses, and other offenses that are substantially equivalent to the offenses listed.
U.S.S.G. Sec. 4B1.2 comment n. 2.
9
In Smith v. Murray, 477 U.S. at 538-39, 106 S.Ct. at 2668-69, the Supreme Court did imply that the actual innocence exception may apply to non-capital sentencing cases:
We reject the suggestion that the principles of Wainwright v. Sykes [cause and prejudice requirements in cases of procedural default] apply differently depending on the nature of the penalty a State imposes for the violation of its criminal laws. We similarly reject the suggestion that there is anything "fundamentally unfair" about enforcing procedural default rules in cases devoid of any substantial claim that the alleged error undermined the accuracy of the guilt or sentencing determination.
(Emphasis added).
10
His offense level would have been 23 and his criminal history category would have been V
11
Due to his career offender status, Maybeck had an offense level of 30 and a criminal history category of VI, which carries a sentencing range of 168-210 months | 01-03-2023 | 04-16-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1555552/ | 36 So.3d 98 (2010)
MONAHAN
v.
BUCCI.
No. 2D09-4845.
District Court of Appeal of Florida, Second District.
May 5, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555554/ | 36 So.3d 87 (2010)
CLAXTON
v.
STATE.
No. 1D09-2306.
District Court of Appeal of Florida, First District.
May 12, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1644851/ | 994 So.2d 28 (2008)
STATE ex rel. Robert ROUSSELL
v.
STATE of Louisiana.
No. 2008-KH-1800.
Supreme Court of Louisiana.
October 10, 2008.
This application is transferred to the Fifth Circuit Court of Appeal for consideration pursuant to the procedures outlined in that court's en banc resolution of September 9, 2008. See State v. Cordero, 08-1717 (La.10-03-08), 993 So.2d 203.
WEIMER, J., concurs in part and dissents in part for the reasons assigned in State v. Cordero, 08-1717 (La.10-03-08), 993 So.2d 203. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555568/ | 36 So.3d 668 (2010)
JIMENEZ
v.
STATE.
No. 2D10-104.
District Court of Appeal of Florida, Second District.
June 9, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1556577/ | 30 So.3d 684 (2010)
Sidney Marcellus SLACK, Appellant,
v.
STATE of Florida, Appellee.
No. 1D07-6305.
District Court of Appeal of Florida, First District.
March 25, 2010.
*685 Nancy A. Daniels, Public Defender, Terry Carley, Assistant Public Defender, and David P. Gauldin, Assistant Public Defender, Tallahassee, for Appellant.
Bill McCollum, Attorney General, and Joshua R. Heller, Assistant Attorney General, Tallahassee, for Appellee.
BENTON, J.
On consideration of appellee's motion for rehearing and/or clarification, we withdraw our prior opinion and substitute the following.
Sidney Marcellus Slack appeals his conviction for fleeing or attempting to elude a law enforcement officer in violation of section 316.1935(2), Florida Statutes (2006), on grounds the trial court erred in denying his motion for judgment of acquittal. He contends the state failed to prove that the *686 vehicle he fled prominently displayed agency insignia. We agree that, because of this failure of proof, the trial court erred in denying the motion for judgment of acquittal. While we reverse on this basis, we remand for entry of a judgment of conviction for violation of section 316.1935(1), Florida Statutes (2006), on the authority of section 924.34, Florida Statutes (2009).
Mr. Slack was charged with violating section 316.1935(2), Florida Statutes (2006), which provides:
Any person who willfully flees or attempts to elude a law enforcement officer in an authorized law enforcement patrol vehicle, with agency insignia and other jurisdictional markings prominently displayed on the vehicle, with siren and lights activated commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(Emphasis added.) The state attempted to prove the charged offense through the testimony of Deputy Sheriff Andrew Stone.
Deputy Stone testified that, on September 29, 2006, he passed an oncoming two-door Mercury vehicle, noticed in his rearview mirror that the vehicle's taillights were not working, turned around and decided to initiate a traffic stop. He testified he was driving a "marked patrol car, lights on top," and was wearing a uniform at the timethe same one he was wearing at the trial. He testified that, to make the Mercury stop, he "engaged" his exterior lights and activated his siren.
At the close of the state's case in chief, Mr. Slack moved for judgment of acquittal. Defense counsel argued, "I don't believe there was any testimony about the insignia on the vehicle. I have a case on that that says they must establish this was a law enforcement vehicle that has a law enforcement insignia." In arguing the motion, defense counsel highlighted Gorsuch v. State, 797 So.2d 649 (Fla. 3d DCA 2001), a case involving three police vehicles, two of which were unmarked and one of which bore a 15-inch City of Miami seal. Id. at 651. In Gorsuch, there was no evidence that any of the vehicles exhibited agency insignia or that any sirens had been activated. Id. The Third District reversed the defendant's conviction for fleeing or attempting to elude a law enforcement officer, concluding, "while the facts demonstrate a willful attempt to elude police, ... the facts do not support the officers were `in an authorized law enforcement patrol vehicle with agency insignia and other jurisdictional markings ... with sirens ... activated.'" Id. (emphasis in original).
In the present case, the trial judge denied the motion for judgment of acquittal, reasoning: "He did refer it was a marked patrol vehicle, and he did identify himself as a member of the sheriffs department. I know by Florida law their patrol vehicles must be marked in a certain scheme as required by Florida law." In due course, the jury was later instructed it had to find that "[t]he law enforcement officer was in an authorized law enforcement patrol vehicle with agency insignia and other jurisdictional markings prominently displayed on the vehicle and with siren and lights activated," in order to convict under section 316.1935(2).
On review of an order denying a motion for judgment of acquittal, we "must apply the competent, substantial evidence standard and `consider the evidence and all reasonable inferences from the evidence in a light most favorable to the [S]tate.'" State v. Konegen, 18 So.3d 697, 699 (Fla. 4th DCA 2009) (quoting Jones v. State, 790 So.2d 1194, 1197 (Fla. 1st DCA 2001) (en banc) (citations omitted)). Considering the evidence in this way, we review de novo the legal issue a trial court's ruling *687 on a motion for judgment of acquittal presents. See, e.g., Pagan v. State, 830 So.2d 792, 803 (Fla.2002) (citing Tibbs v. State, 397 So.2d 1120 (Fla.1981)).
While Deputy Stone testified he was driving a "marked patrol car" with "lights on top" and that he activated his lights and siren, there was no evidence of "agency insignia and other jurisdictional markings prominently displayed on the vehicle." § 316.1935(2), Fla. Stat. (2006). That not all markings on law enforcement vehicles constitute agency insignia was made clear in Gorsuch. By neglecting to adduce any evidence that Deputy Stone's vehicle had agency insignia or other jurisdictional markings, the state failed to make out a prima facie case of fleeing or attempting to elude a law enforcement officer in violation of section 316.1935(2), and the trial court erred in denying Mr. Slack's motion for judgment of acquittal.
The State argues, however, that it also proved and the jury also necessarily found the appellant guilty of violating section 316.1935(1), which the state argues[1] should be deemed a lesser-included offense:
It is unlawful for the operator of any vehicle, having knowledge that he or she has been ordered to stop such vehicle by a duly authorized law enforcement officer, willfully to refuse or fail to stop the vehicle in compliance with such order or, having stopped in knowing compliance with such order, willfully to flee in an attempt to elude the officer, and a person who violates this subsection commits a felony of the third degree, punishable as provided in s.775.082, s.775.083, or s.775.084.
§ 316.1935(1), Fla. Stat. (2006). We agree the fact that section 316.1935(1) is punishable in the same fashion as section 316.1935(2) is not determinative. See Sanders v. State, 944 So.2d 203, 207 (Fla. 2006) ("Ray[ v. State, 403 So.2d 956 (Fla. 1981)] does not require that the lesser included offense be lesser both in degree and in penalty.").
In Sanders, the defendant was charged with attempted first-degree murder and convicted of attempted second-degree murder with a firearm, a lesser-included offense that normally carried a shorter maximum sentence but, with the application of the ten-twenty-life statute, the two offenses carried the same maximum sentence. Id. at 205. While subsections (1) and (2) of section 316.1935 are punishable in the same fashion without regard to any enhancement statute, we have interpreted Sanders in a way that makes this immaterial. See Carle v. State, 983 So.2d 693, 695 (Fla. 1st DCA 2008) (holding simple possession is a necessarily included offense of possession of diazepam with intent to sell even though both offenses are third-degree felonies that carry the same penalty because "[l]esser included offenses are determined based on the elements of the offenses, not on the penalties attached"). "Necessarily lesser included offenses are those offenses in which the statutory elements of the lesser included offense are always subsumed within those of the charged offense." Id. (citing State v. Paul, 934 So.2d 1167, 1176 (Fla. 2006)).
In the present case, the jury was instructed, with respect to the elements constituting the offense proscribed by section 316.1935(2):
To prove the crime of fleeing to elude a law enforcement officer the State must prove the following four elements beyond a reasonable doubt. Sidney Slack *688 was operating a vehicle upon a street or highway in Florida. Secondly, a duly authorized law enforcement officer ordered the defendant to stop or remain stopped. Third, Sidney Slack know[ing] he had been directed to stop by a duly authorized law enforcement officer either willfully refused or failed to stop the vehicle in compliance with the order, or having stopped the vehicle willfully fled in an attempt to elude the officer.
... Number four, the law enforcement officer was in an authorized law enforcement patrol vehicle with agency insignia and other jurisdictional markings prominently displayed on the vehicle and with lights and sirens activated.
The jury was instructed that section 316.1935(1) was proven if the State proved all the elements of subsection (2) except the final element.
By finding Mr. Slack guilty of violating section 316.1935(2), the jury made a finding on every element of the lesser-included offense under subsection (1).[2] We therefore direct entry of judgment of conviction for subsection (1) on remand. Section 924.34 provides:
When the appellate court determines that the evidence does not prove the offense for which the defendant was found guilty but does establish guilt of a lesser statutory degree of the offense or a lesser offense necessarily included in the offense charged, the appellate court shall reverse the judgment and direct the trial court to enter judgment for the lesser degree of the offense or for the lesser included offense.
See generally State v. Sigler, 967 So.2d 835, 844 (Fla.2007) (an appellate court can direct a judgment for a permissive lesser-included offense under section 924.34 only if the jury verdict necessarily includes a finding on every element of that offense); Michelson v. State, 927 So.2d 890, 892-93 (Fla. 4th DCA 2005) ("Although we agree it is impermissible for an appellate court to remand for entry of a judgment of conviction for a lesser-included offense or for a lesser degree of offense for which a jury has not found all essential elements, we find no constitutional prohibition against remand for conviction for a lesser degree or lesser included offense where the jury has specifically found the existence of all elements of the offense and where the error causing remand does not disturb those findings.").
Reversed and remanded for entry of judgment of conviction for the lesser-included offense of fleeing or attempting to elude a law enforcement officer in violation of section 316.1935(1), Florida Statutes (2006).
KAHN and CLARK, JJ., concur.
NOTES
[1] At trial, the defense objected to treating section 316.1935(1) as a lesser-included offense of section 316.1935(2) because both offenses are third-degree felonies.
[2] Whether these elements correspond precisely to the language of section 316.1935(1) is not before us. The defense raised no objection to any element, when it objected to treating section 316.1935(1) as a lesser-included offense on the basis that both section 316.1935(1) and 316.1935(2) are third-degree felonies. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/398824/ | 668 F.2d 838
Manuel BARRIENTOS a/k/a Manny Redmon, Petitioner-Appellant,v.UNITED STATES of America, Respondent-Appellee.
No. 81-1072.
United States Court of Appeals,Fifth Circuit.
Feb. 26, 1982.
Elizabeth Unger Carlyle, Dallas, Tex., for petitioner-appellant.
Rebecca Gregory, Shirley Baccus-Lobel, Asst. U. S. Attys., Dallas, Tex., for the U. S.
Appeal from the United States District Court for the Northern District of Texas.
Before GEE, GARZA and REAVLEY, Circuit Judges.
GARZA, Circuit Judge:
1
Appellant, Manuel Barrientos a/k/a Manny Redmon, and his mother, Luchea Barrientos, were jointly indicted for possession and delivery of heroin. The facts indicate that Redmon sold some heroin to an undercover DEA agent, such substance having been delivered to the agent as "incense" purchased from Redmon's mother, at Luchea's Psychic World, a business establishment used by Redmon as a front for the sale of narcotics.
2
Following his indictment, Redmon retained counsel to represent both his mother and himself. According to counsel, Pat Robertson, Redmon initially told him that he was innocent of the crime for which he was charged. After flunking Robertson's lie detector test, however, Redmon confessed his guilt to his lawyer. At some point thereafter, counsel advised his client of the possibility of plea bargaining, as well as testifying in his mother's case. Redmon had indicated to counsel that he alone was responsible for the sale of the heroin.
3
Redmon subsequently pled guilty to possession of and aiding and abetting in the distribution of heroin in violation of 21 U.S.C. § 844(a), 21 U.S.C. § 841(a)(1) and 18 U.S.C. § 2. Thereafter Redmon testified at his mother's trial, implicating himself while exculpating her. He was sentenced to seven years imprisonment and was fined $1,000.00.
4
Redmon subsequently brought a 28 U.S.C. § 2255 application for post-conviction relief in the United States District Court alleging primarily: (1) that he did not receive the effective assistance of counsel because his attorney represented both him and his mother who was his co-defendant in what petitioner asserts to have been a clear conflict of interest; (2) that his plea of guilty was involuntary and in violation of Federal Rule of Criminal Procedure 11 because it was based on promises apart from the plea bargain which were not kept; and (3) that he repeatedly requested his lawyer to perfect an appeal but that his lawyer refused and failed to do so. Following a hearing before a U. S. Magistrate, the district court adopted the Magistrate's recommendations and denied appellant's claims for relief. For the reasons set forth below, we affirm the district court.1
5
* Appellant's first claim is that he was denied his Sixth Amendment right to effective assistance of counsel because of the dual representation by counsel of Redmon's mother and himself. We understand this argument to proceed as follows: Counsel for Redmon recognized that it was not possible to successfully defend both clients, and that Redmon's testimony could be an essential element in the defense of Luchea Barrientos, if Redmon would take sole blame for the crime charged. Accordingly, counsel determined that the best way to represent Mrs. Barrientos was to advise Redmon to plead guilty, and to testify in his mother's trial inculpating himself and exculpating her. By pleading guilty, Redmon's testimony could be preserved for his mother's defense. Recognizing these factors, Redmon argues that it was humanly impossible for an attorney who knew that the inculpatory testimony of one client was essential in the defense of another to adequately advise the first client as to the propriety of pleading guilty and as to what defenses were available to him. Such a scenario, he claims, created a conflict of interest warranting § 2255 relief.
6
Multiple representation does not violate the Sixth Amendment unless it gives rise to a conflict of interest. Cuyler v. Sullivan, 446 U.S. 335, 348, 100 S.Ct. 1708, 1718, 64 L.Ed.2d 333, 346 (1980); Holloway v. Arkansas, 435 U.S. 475, 98 S.Ct. 1173, 55 L.Ed.2d 426 (1978). It is affirmatively established that no Sixth Amendment violation occurs unless defendant demonstrates "that an actual conflict of interest adversely affected his lawyer's performance." Cuyler v. Sullivan, supra; Baty v. Balkcom, 661 F.2d 391 (5th Cir. 1981). A potential conflict of interest or one which is merely speculative does not by itself make out a constitutional claim. Id.
7
In examining the record before us, we note the standard of review applicable to this claim. An appellate court is bound by factual findings of a district court which are not clearly erroneous; however, mixed questions of law and fact and questions of law permit us to substitute our own judgment for that of the district court. See Baty v. Balkcom, supra at 394 n.7; Baker v. Metcalfe, 633 F.2d 1198, 1201 (5th Cir.), cert. denied, 451 U.S. 974, 101 S.Ct. 2055, 68 L.Ed.2d 354 (1981). Determinations concerning the adequacy of counsel and the existence of a conflict of interests are mixed determinations of fact and law subject to independent review. See Cuyler v. Sullivan, supra, 446 U.S. at 341-42, 100 S.Ct. 1708, 1714-15, 64 L.Ed.2d 333, 342 (1980); Baty v. Balkcom, supra at 394 n.5 (5th Cir. 1981).
8
An examination of the § 2255 hearing below reveals that Redmon's attorney, Robertson, was not unaware at the time he was retained of the potential conflict presented by dual representation of the co-defendants in this case. Robertson indicated that he discussed this possibility with Redmon prior to proceeding to represent him. Furthermore, after Redmon confessed his guilt and decided to plead guilty, counsel determined that dual representation of the co-defendants would not result in a conflict of interest. "An 'attorney representing two defendants in a criminal matter is in the best position professionally and ethically to determine when a conflict of interest exists or will probably develop in the course of trial.' " Holloway v. Arkansas, supra, quoting State v. Davis, 110 Ariz. 29, 31, 514 P.2d 1025, 1027 (1973).
9
Redmon argues that because trial counsel was convinced of his guilt and wanted to preserve his testimony in defense of Mrs. Barrientos, he was unable, due to a conflict of interests, to properly advise Redmon of other possible defenses or strategic considerations which would have made it more advantageous for Redmon to go to trial. First, the record does not support petitioner's claim that Robertson considered Redmon's testimony essential in the defense of Mrs. Barrientos. Indeed, at one time, Robertson states that he considered not using it. Second, appellate counsel hypothesizes certain other "strategic considerations" such as an illegal search which, because of the alleged conflict, precluded trial counsel from effectively advising Redmon. As previously stated, the standard requires that the conflict be "actual", not hypothetical or potential, and the record in this case simply does not reveal such an actual conflict warranting post-conviction relief. Prior to Redmon's decision to plead guilty, there was merely a "potential" that a conflict of interests could arise; counsel was aware of this potential and discussed such with Redmon. When Redmon voluntarily chose to plead guilty, the potential conflict was extinguished. There is simply no evidence in the record, other than Redmon's claims which are of suspect credibility, that trial counsel was ever faced with a situation in which he was forced to choose between the interests of one client over another. The law requires that an "actual" conflict be shown; to require anything less would require individual representation of every criminal defendant. We decline to take such a step in that direction today.
II
10
Petitioner also contends that his plea of guilty was based in part on an unkept promise that leniency would be shown to his mother; and, therefore, his plea was involuntary.2 The testimony of Redmon's counsel establishes that no promise of leniency was offered Redmon to induce him to plead guilty. This testimony was found "credible and worthy of belief." Furthermore, the entire plea bargaining agreement, in accordance with Rule 11, was recited to the court by government's counsel, and it was explained to Redmon by the court, as well as his counsel. At no time during the arraignment was there an indication that promises other than those described within the plea bargaining agreement were made. While Redmon initially equivocated somewhat in his plea of guilty, the court's further inquiry reveals that his plea of guilty was voluntarily made.
III
11
The final issue requiring resolution in this appeal concerns whether the failure of petitioner's trial counsel to perfect an appeal from Redmon's plea of guilty constituted ineffective assistance of counsel.3 This issue appears to be one of first impression in this circuit. We have previously, however, addressed a similar question arising from the failure of trial counsel to perfect an appeal from a jury conviction after the trial proceeding. These cases establish that the failure of counsel to timely file an appeal upon request of the defendant or to mislead the defendant or court as to the filing of appeal would constitute ineffective assistance of counsel entitling the defendant to post-conviction relief in the form of an out-of-time appeal. See, e.g., Mack v. Smith, 659 F.2d 23 (5th Cir. 1981); Chapman v. United States, 469 F.2d 634 (5th Cir. 1972); Arrastia v. United States, 455 F.2d 736 (5th Cir. 1972); Kent v. United States, 423 F.2d 1050, 1051 (5th Cir. 1970); Atilus v. United States, 406 F.2d 694 (5th Cir. 1969); Schwander v. United States, 386 F.2d 20 (5th Cir. 1967); Brewen v. United States, 375 F.2d 285 (5th Cir. 1967); Bray v. United States, 370 F.2d 44 (5th Cir. 1966); Camp v. United States, 352 F.2d 800 (5th Cir. 1965); cf. Torna v. Wainwright, 649 F.2d 290 (5th Cir. 1981); Perez v. Wainwright, 640 F.2d 596 (5th Cir. 1981) (failure of counsel to perfect appeal after promise to do so entitled defendant to out-of-time state appeal under 28 U.S.C. § 2254).
12
The basic principles upon which our rule entitling a defendant to an out-of-time appeal is founded are (1) that every person has an absolute right to an appeal from a trial court conviction, Atilus v. United States, supra at 697, and (2) that a criminal defendant's right to counsel extends through the period for taking an appeal. Bray v. United States, supra at 46. The failure of trial counsel to perfect an appeal denies a defendant the absolute right to appeal his jury conviction and, therefore, deprives him of his right to effective assistance of counsel.
13
The considerations, however, underlying an acceptance of a guilty plea are quite different from the considerations underlying a defendant's decision to take a direct appeal from a judgment of conviction. Arrastia v. United States, supra at 738-39. A guilty plea, since it admits all the elements of a formal criminal charge, waives all non-jurisdictional defects in the proceedings against a defendant. United States v. Jackson, 659 F.2d 73, (5th Cir. 1981); United States v. Saldana, 505 F.2d 628 (5th Cir. 1974). Absent a jurisdictional defect, a defendant usually has no right to appeal from a plea of guilty. We note that following a plea of guilty, a defendant may in some circumstances question the propriety of a Rule 11 proceeding. Other complaints, however, not based on a jurisdictional or Rule 11 ground, should be considered in a motion to vacate under § 2255. Redmon's allegations to the effect that his guilty plea was induced by promises apart from the plea bargain were fully considered in his § 2255 motion and thus negate any claim of ineffective assistance of counsel for failure to appeal in this case. Redmon has received a full hearing before a U. S. Magistrate; his record has been reviewed by the district court and this court, and we find no grounds upon which relief could or should be granted.
14
AFFIRMED.
1
In petitioner's application for § 2255 relief, he also alleged (1) that the presentence report in this case was incomplete because the Probation Officer failed to investigate the petitioner under the name of Manny Redmon even though the Probation Officer knew that that was petitioner's legal name; and (2) that he was denied due process of law because he was convicted and sentenced under the name of Manuel Barrientos which is not his true legal name. Redmon has pursued neither of these issues on appeal as separate grounds for relief and so has abandoned them in that regard. Boyd v. Estelle, 661 F.2d 388, 389 n.1, (5th Cir. 1981); Battie v. Estelle, 655 F.2d 692, 694 n.1 (5th Cir. 1981)
2
Petitioner similarly contends that the District Court failed to determine that his plea was not the result of promises apart from any plea bargain and therefore violated Fed.R.Crim.P. 11. "So long as the trial judge is convinced by the record before him that a guilty plea is not coerced, a further showing that the plea is knowingly entered and there exists sufficient evidence of guilt will satisfy requirements of Rule 11." United States v. Martinez, 486 F.2d 15, 21 (5th Cir. 1973). While the district judge may not have expressly inquired into the existence of other promises, her inquiry was adequately detailed and revealed the voluntariness of the plea. See Record on Appeal, Volume 3, 13-16
3
This issue was argued in petitioner's application for relief but denied by the district court. When such issue was not pursued on appeal, this court raised it, sua sponte, and requested supplemental briefs addressing this argument in light of our prior decisions in Torna v. Wainwright, 649 F.2d 290 (5th Cir. 1981) and Perez v. Wainwright, 640 F.2d 596 (5th Cir. 1981) | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1555671/ | 36 So.3d 90 (2010)
SMITH
v.
STATE.
No. 1D10-0332.
District Court of Appeal of Florida, First District.
May 4, 2010.
Decision Without Published Opinion Dismissed. | 01-03-2023 | 10-30-2013 |
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https://www.courtlistener.com/api/rest/v3/opinions/2858059/ | EVANS V. STATE
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-90-340-CR
AND
NO. 3-90-341-CR
TIMOTHY PETER EVANS,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE 51ST AND 119TH DISTRICT COURTS OF TOM GREEN COUNTY
NOS. CR89-0705-A & CR90-0232-B
HONORABLE JOHN E. SUTTON, JUDGE PRESIDING
Timothy Peter Evans, appellant, was charged in separate indictments with
possession of a controlled substance (cocaine) and aggravated possession of a controlled substance
(ecstasy). Appellant pled nolo contendere to both indictments, and the trial court assessed
punishment at five years and thirty-one years confinement, respectively. Appellant appeals to this
Court, asserting ineffectiveness of counsel. We agree and, therefore, reverse the trial court's
judgments and remand both causes for new punishment hearings.
STATEMENT OF FACTS
The pleas of nolo contendere described above were entered on the advice of counsel
and without a plea bargain agreement with the State. The trial court admonished appellant as to
the range of punishment the court could assess and the voluntariness of his plea. Appellant stated
he understood the range of punishment and that the court could set his punishment anywhere in
that range. After the plea was entered and the admonishments were given, the State offered a
"waiver and stipulation of evidence" that appellant had executed. The State also offered the
testimony of four witnesses. The only evidence offered by appellant was the testimony of his
mother. Based on the plea of nolo contendere and the stipulations and evidence offered by the
State, the trial court refused to defer adjudication and found appellant guilty of the offenses set
forth in the indictments.
The trial court then proceeded to the punishment stage, wherein the State and
appellant merely reurged the evidence presented at the guilt-innocence stage. Because of the
paucity of evidence before the court that was relevant to punishment, the trial court also examined
the pre-sentence investigation (P.S.I.) report that had been prepared in the case. In the P.S.I.
report, the probation department recommended that appellant be incarcerated. After considering
the evidence presented and the P.S.I. report, the trial court sentenced appellant to confinement for
five years on the possession charge and thirty-one years on the aggravated possession charge.
Appellant then filed a motion for new trial wherein he alleged ineffective assistance
of counsel. At the hearing on the motion for new trial, appellant offered the testimony of three
witnesses, including his own testimony, to show the ineffectiveness of his counsel. In response,
the State offered the testimony of appellant's prior counsel. The trial court denied the motion for
new trial, and appellant has appealed to this Court.
INEFFECTIVE ASSISTANCE OF COUNSEL
1. Plea of Nolo Contendere
Appellant asserts that his plea of nolo contendere was involuntary as a result of
ineffective assistance of counsel. A defendant who pleads nolo contendere on the advice of
counsel may attack the voluntary and intelligent character of the plea by showing: (1) that the
counsel's advice was not within the range of competence demanded of attorneys in criminal cases;
and (2) that there is a reasonable probability that, but for counsel's errors, the defendant would
not have pleaded nolo contendere and would have insisted on going to trial. See Hill v. Lockhart,
474 U.S. 52, 56-59 (1985); Strickland v. Washington, 466 U.S. 668 (1984); McMann v.
Richardson, 397 U.S. 759 (1970); Ex parte Pool, 738 S.W.2d 285, 286 (Tex. Crim. App. 1987).
Even if we assume for the sake of argument that appellant's counsel did not operate
within the range of competence demanded of attorneys in criminal cases, after examining the
record presented on appeal we conclude that appellant has failed to show there was a reasonable
probability that, but for counsel's errors, he would not have pled nolo contendere and would have
insisted on going to trial. The evidence of appellant's guilt was overwhelming. Further, appellant
wanted deferred adjudication; and in order to obtain such a result, he had to plead either "guilty"
or "nolo contendere." See Tex. Code Crim. Proc. Ann. art. 42.12, § 5(a) (Supp. 1991). Finally,
nowhere in his testimony given at the hearing on the motion for new trial does appellant assert
that he would have insisted on going to trial. Indeed, the record shows quite the contrary, as is
evidenced by the following exchange between appellant and the State's attorney:
Q: Now, you're not disputing that you're, in fact, guilty of aggravated
possession of [a] controlled substance, are you?
A: No, sir.
Q: Okay. And so basically, what you're asking here is that you are granted a
new trial and we have a new punishment hearing; is that correct?
A: Yes, sir. I would like a new punishment hearing.
. . . .
Q: Your nolo plea was freely and voluntarily made . . .?
A: Yes.
Based on the record before us, we conclude that appellant has failed to satisfy the second prong
of the test set out above. Therefore, we overrule appellant's point of error as to the voluntariness
of his pleas of nolo contendere.
2. The Punishment Stage
Most, if not all, of appellant's complaints pertain to his counsel's alleged
ineffectiveness at the punishment stage. In Strickland the United States Supreme Court adopted
a two-part test for evaluating claims of ineffective assistance of counsel: The defendant must
show: (1) that counsel's representation fell below an objective standard of reasonableness; and (2)
that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the
proceeding would have been different. Strickland, 466 U.S. at 687-88, 694. However, in Ex
parte Cruz, 739 S.W.2d 53 (Tex. Crim. App. 1987), the Court of Criminal Appeals held that the
second prong of Strickland does not apply to the punishment stage of a trial. This holding was
reaffirmed in State v. Recer, 815 S.W.2d 730 (Tex. Crim. App. 1991); Ex parte Felton, 815
S.W.2d 733 (Tex. Crim. App. 1991); and Ex parte Walker, 777 S.W.2d 427 (Tex. Crim. App.
1989). (1)
In Cruz the Court stated that the appropriate test to be applied at the punishment
stage is the "reasonably effective assistance" standard of Ex parte Duffy, 607 S.W.2d 507 (Tex.
Crim. App. 1980). Ex parte Cruz, 739 S.W.2d at 58. The "reasonably effective assistance"
standard does not mean errorless counsel, nor does it mean counsel judged ineffective by
hindsight. Rather, it means counsel reasonably likely to render and rendering reasonably effective
assistance. Ex parte Duffy, 607 S.W.2d at 514. The Court of Criminal Appeals has discussed
the application of this standard to the punishment stage:
In applying this standard, this Court judges the "full scope of `assistance'--representation, performance, delivery--for effectiveness rather than adequacy of
ability or capacity to advise. The standard we retain mandates an examination both
of competence, `likely to render,' and of assistance, `and rendering,' in
determining effectiveness of counsel." While this Court normally looks to the
"totality of the representation" and "the particular circumstances of each case" in
evaluating the effectiveness of counsel, . . . we have also found that under some
circumstances a "single error of omission by . . . counsel [can] constitute[]
ineffective assistance."
Ex parte Felton, 815 S.W.2d at 735 (citations omitted). Looking at the facts and circumstances
of this particular case and the totality of the representation that appellant received from his
counsel, we conclude that appellant was not given reasonably effective assistance by his trial
counsel.
As stated above, at the hearing in which appellant pleaded nolo contendere and was
sentenced to prison, the State offered the testimony of four witnesses. Meanwhile, appellant's
counsel, William Moore, did not subpoena any witnesses to testify on behalf of appellant, even
though appellant gave him the name of at least one person he wanted present to testify at the
hearing. As a result, Moore offered no witnesses other than appellant's mother, and it was by
mere chance that she was there to testify on her son's behalf (Moore did not know she was coming
to the hearing). Further, not only did Moore fail to offer any evidence to rebut the four witnesses
of the State, he did not even know the State intended to present live testimony at the hearing until
he saw the State's witnesses in the courtroom that day. This failure to investigate what witnesses
the State intended to use at the punishment hearing was damaging in that the testimony of at least
one of the four witnesses for the State was particularly harmful to appellant. She testified that she
saw appellant sell drugs on at least one occasion and that he later threatened her. This testimony
went unrebutted. Moore knew neither that this witness was going to testify nor what the content
of her testimony would be. Moore lacked this critical knowledge despite the fact that the State
is obligated to disclose the names of witnesses, on proper motion by the defendant, if they will
be used by the State at any stage in the trial. See Young v. State, 547 S.W.2d 23, 27 (Tex. Crim.
App. 1977).
As stated earlier, the trial court also considered the P.S.I. report prior to assessing
punishment. As required by statute, the trial court permitted appellant to read the P.S.I. report
before sentencing. See art. 42.12, § 9(d). After reading the report, appellant told Moore that the
report contained several factual inaccuracies. Moore did nothing to rebut these inaccuracies, even
though the court must allow a defendant or his attorney to comment on the report and has the
discretion to allow the defendant to introduce testimony or other information alleging a factual
inaccuracy in the report. See art. 42.12, § 9(e). The failure to rebut the inaccuracies in the P.S.I.
report was damaging to appellant in that the trial court appears to have placed substantial reliance
on the report. Further, the alleged inaccuracies were highly unfavorable to appellant.
At the hearing on appellant's motion for new trial, appellant offered his own
testimony as well as the testimony of two other witnesses to show that Moore was ineffective in
failing to present such testimony at the punishment hearing to rebut the State's witnesses and the
P.S.I. report. A counsel's failure to call witnesses at the guilt-innocence and punishment stages
is irrelevant absent a showing that such witnesses were available and appellant would benefit from
their testimony. See King v. State, 649 S.W.2d 42, 44 (Tex. Crim. App. 1983).
The P.S.I. report discussed above contained several alleged inaccuracies: (1) that
appellant made several trips to Austin to get drugs and bring them back to San Angelo; (2) that
it was not at all unusual for appellant to have in his possession a hundred to a hundred and fifty
"hits" of ecstasy at a time; (3) that appellant had such quantities of ecstasy in his possession at
least a dozen times; and (4) that appellant always had a lot of money and the money seized by the
police during the search was in fact drug money. This evidence went unrebutted at the
punishment hearing; however, at the hearing on the motion for new trial, appellant and two other
witnesses testified that these assertions in the report were untrue. Also, as discussed above, one
of the State's witnesses at the punishment hearing testified that she saw appellant sell drugs on at
least one occasion and that he also threatened her. At the motion-for-new-trial hearing, appellant
rebutted these assertions with his own testimony.
That the trial court placed substantial reliance on this damaging evidence at the
punishment hearing is obvious from the following statement in the record: "Considering
everything in front of the court at this time, the court is of the opinion that Mr. Evans' possession
of this is more than that of merely a roommate in the same lodging; but is that of a very major
principal, if not the principal, in the trade of that substance that was possessed at his location."
(Emphasis added.) Thus, although appellant was charged with possession of illegal drugs, at the
sentencing hearing the trial court had before it unanticipated and unrebutted evidence that
appellant was a major dealer in illegal drugs. Therefore, we conclude that appellant would have
benefitted from the testimony offered at the hearing on the motion for new trial.
Quoting from the ABA Project on Standards for Criminal Justice, the Court of
Criminal Appeals stated the following concerning an attorney's responsibility to a criminal
defendant:
Defense counsel has the responsibility to conduct a prompt investigation of the
circumstances of the case and explore all avenues leading to facts relevant to guilt
and degree of guilt or penalty. The investigation should always include efforts to
secure information in the possession of the prosecution and law enforcement
authorities. The duty to investigate exists regardless of the accused's information
or statements to the lawyer of facts constituting guilt or his stated desire to plead
guilty.
Ex parte Duffy, 607 S.W.2d at 517 (emphasis added). A corollary to this notion is that counsel
has a responsibility to seek out and interview potential witnesses. Id.
Looking at the record in the present case, we conclude that appellant's trial counsel
clearly fell short of this standard. Moore offered no evidence at the punishment stage relevant
to appellant's degree of guilt; he failed to subpoena a witness that appellant wanted present to
testify at the punishment hearing; he made no efforts before the hearing to secure the names of
witnesses that the State would use at the punishment hearing; and he made no effort to rebut the
very damaging evidence presented by the State's witnesses and contained in the P.S.I. report, even
after appellant pointed out the inaccuracies in the evidence and asked to be allowed to testify. In
short, it appears that Moore did nothing but allow appellant to plead nolo contendere to a first-degree felony without any plea bargain and then fail to introduce any mitigating testimony even
in the face of highly damaging evidence produced by the State. Therefore, we conclude that
appellant's counsel was not reasonably likely to render, due to his lack of preparation, and did not
render reasonably effective assistance of counsel at the punishment stage.
CONCLUSION
Based on the foregoing discussion, we conclude that appellant was denied
reasonably effective assistance of counsel at the punishment stage of the trial; therefore, the trial
court's judgments are reversed and the causes are remanded for new punishment hearings. See
Tex. Code Crim. Proc. Ann. art. 44.29(b) (1979).
J. Woodfin Jones, Justice
[Before Justices Powers, Jones and B. A. Smith; Justice B. A. Smith
not participating]
Reversed and Remanded on Both Causes
Filed: January 8, 1992
[Do Not Publish]
1. 1 We note that the Court of Criminal Appeals recently stated that the correctness of its
holding in Ex parte Cruz may be subject to question. See Ex parte Felton, 815 S.W.2d at 736-37 n.4. Until the Court of Criminal Appeals overrules Cruz, however, we must follow it.
Therefore, we express no opinion as to outcome of the present case under the two-part
Strickland test. | 01-03-2023 | 09-05-2015 |
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LEWIS,v.UNITED STATES.
No. 10522.
United States Court of Appeals Third Circuit.
Argued Dec. 20, 1951.Decided Feb. 12, 1952.
Thorn Lord, Trenton, N.J., for appellant.
Edward v. Ryan, Asst. U.S. Atty., Jersey City, N.J. (Grover C. Richman, Jr., U.S. Atty. for District of New Jersey, Newark, N.J., on the brief), for appellee.
Before McLAUGHLIN, KALODNER and STALEY, Circuit Judges.
McLAUGHLIN, Circuit Judge.
1
Appellant sued below under the Federal Tort Claims Act, 62 Stat. 982, 28 U.S.C. § 2671 et seq., alleging personal injuries caused by the negligence of a Government employee acting within the scope of his employment and in the line of duty. The case was tried to the Court as the statute provides, 28 U.S.C. § 2402 and resulted in a judgment against plaintiff from which he now appeals.
2
The incident forming the basis of the action occurred on April 30, 1948 about 5:00 P.M. on the Bayonne, New Jersey, Naval Supply Depot in the vicinity of its 32nd Street gate. Prior to an outside civilian being allowed on the base he had to identify himself. He then received a clearance button which he surrendered on leaving.
3
The appellant Lewis, in the business of buying and selling second-hand machinery, had purchased some surplus Navy machinery which was still on the base. Among that machinery was a crane which Lewis wished to crate and ship away. About 8:30 on the morning of April 30, 1948, Lewis came to the base in his automobile to take care of this. He was accompanied by two employees, Ferdinand and William Unger, father and son. After parking his car outside the 32nd Street gate he and the Ungers went to the guard-house by the gate. They registered, were given identification buttons and went on into the base to the crane's location. Later that morning another Lewis employee, Kinney by name, drove on the base in his automobile to which a trailer was attached. In the trailer were tools belonging to Lewis. Kinney with his automobile and trailer joined Lewis at the crane. About quarter of five that afternoon Lewis and his men finished working for the day and they all rode back to the gate in Kinney's car. The Lewis tools were in the attached trailer with the exception of some sort of an acetylene torch which was in the rear of the car. Lewis testified that there had been thefts from the base; in particular, 'some thousands of dollars worth of stuff' had been stolen from the base, and 'every car leaving the post between 4:30 and 5:30 were searched.'
4
The Lewis car was stopped at the gate by a Marine sentry because there was no property pass covering the tools. Lewis was advised that such a pass was necessary and Sergeant Daniels of the Marine guard escorted him to the civilian guard office in a building adjoining the gate in order that this might be attended to. There, according to Stewart, the civilian guard on duty, Lewis started swearing. 'God-damn it,' he said, 'I have been buying material from the Government, $80,000 worth, and I want to get processed much quicker than this.' Later, Stewart testified, Lewis cursed at him and said, ' * * * I will get you outside the reservation.' Stewart immediately called the Provost Marshal's office and talked with Mrs. Tiene, secretary to the Provost Marshal and a security office employee, about the property pass. He said that as he was taking Lewis ' * * * grabbed the 'phone and * * * started swearing.' Mrs. Tiene testified that she heard the swearing over the telephone.
5
Acting on Mrs. Tiene's instructions Lewis in Kinney's car with Kinney driving, went to the proper base office to secure the property pass. Before doing so he sent the Ungers out to his own car to there await his return. He obtained the pass and he and Kinney came back to the 32nd Street gate where he gave the pass to Marine Corporal Zrubek, who was in charge. The corporal, inspecting the pass, found that it had been written in lead pencil, contrary to regulations. He ordered Kinney to pull his car out of traffic while the pass was checked. Zrubek testified that as the civilian guard Stewart was telephoning about the pass Lewis alighted from the car and stood on the side of his sentry box and said, 'These 'God-damn punks' and things like that. I cannot tell you the words. He called me a 'snot-nosed punk' and 'a snot-nosed beak". Zrubek states that he did not argue with Lewis and simply told him that it was a matter for his commanding officer. The pass was cleared shortly by telephone and Zrubek went outside and so advised Lewis. He said that as Lewis ' * * * goes to get in (the Kinney automobile) he called me a 'snot-nosed bastard". Zrubek walked to the front of the car. He states the machine jerked forward. He instructed Private Foote, a Marine on sentry duty at the gate ' * * * to hold the vehicle' while he telephoned the sergeant of the guard ' * * * because we didn't like that sort of thing going on at the gate not only with me but anybody else.' The sergeant ordered him to get the civilian police and have Lewis put under arrest. Zrubek had started over toward Stewart's office for that purpose when he heard some shots.
6
Private Foote testified that he knew little or nothing of the situation prior to Corporal Zrubek ordering him to hold the car. After receiving the order he states that he went to the left side of the car and instructed Kinney not to move it and Kinney had said, 'All right.' Lewis ordered Kinney to drive on, but Kinney refused. Then Lewis said to Kinney, 'Get out I will drive.' Kinney replied, 'All right. You drive. He's got a gun.' Lewis admitted that Kinney said to him, 'He wasn't going to drive, he (Foote) had a gun.' Kinney alighted from the car, Lewis moved in behind the wheel and started driving the car forward. As he did Foote told him that he could not move the automobile. Foote testified that Lewis said, 'I will drive this God-damned car' or something to that effect and started off. Foote yelled 'Halt' three times. He meanwhile, drew, loaded and cocked his pistol. Seeing that the car was not going to stop he fired two warning shots into the air. The car continued on and Foote fired two shots at the car's left rear tire. One of the shots hit the left rear fender, the other went through the left rear glass and struck Lewis in the left shoulder as he was sitting in the driver's seat on the left side of the automobile. Lewis estimated that the distance from where he had last stopped which was where Foote was standing to where he was hit was about 170 feet. Foote guessed the distance as perhaps 150 feet. Asked about his orders with reference to restraining a person from getting away he said, 'My orders were to hold the car, and I couldn't hold it by myself. The only thing I could do, that is what weapons were there for, to use.'
7
Marine Captain McLeod, who was in charge of the Marine guards at the Bayonne Naval Supply Depot at the time of trial, testified concerning basic orders for sentinels in force on April 30, 1948 and applicable to Private Foote at that time. He said that under the first general order the sentinel ' * * * carries out and uses all means at his disposal to arrest the person or any party causing a disorder on his post.' He further said that 'These orders, all sentinels standing a post are required to memorize prior to being posted.'
8
Lewis was taken to the Bayonne Hospital where the bullet was removed by Dr. Chayes. The latter was not a witness. The Government agreed to allow a report by him to be read into evidence upon the understanding that if the doctor were a witness he would testify substantially the same as what was contained in the report. The report said that the bullet had fractured the left shoulder. Lewis stated that he was in the hospital for two weeks or a few days over two weeks. The doctor's report said that the doctor discharged Lewis on November 29, 1948, with some permanent disability of the left shoulder.
9
The Trial Judge found as facts that Lewis did use profanity and was abusive on one or more occasions and did engage in one or more altercations with the Marine and civilian police personnel of the base and that as a result Private Foote was ordered by his superior to hold the Lewis car until permission to arrest Lewis was obtained. The events thereafter were found to have happened as already outlined above.
10
There was a finding that civilian patrolman Stewart, Corporal Zrubek and Private Foote acted ' * * * within the scope of their proper functions and duties in all of their actions in connection with the plaintiff and the stopping of the car in which he was a passenger, * * * ' and that they only did ' * * * what they considered necessary and appropriate in the proper execution of their duties and orders, * * * ' except that Foote in firing his pistol, as he did, was found to have ' * * * used excessive force under all the circumstances surrounding the occurrence.'
11
By the final finding of fact Lewis was held to have been negligent ' * * * when, in spite of instructions from the sentry to stop the car, he wilfully drove it away from the gate.'
12
As a conclusion of law it was held that the shooting was an assault and battery upon Lewis and consequently non-recoverable under sub-division (h) of the Exceptions to the Tort Claims Act, 28 U.S.C. § 2680(h). Contingently it was concluded as a matter of law that if Foote's action did not constitute assault and battery but under the circumstances was to be construed as an act of negligence so as to bring it within the Tort Claims Act, then Lewis' failure to stop on Foote's order was contributory negligence so as to defeat his action under the law of New Jersey which was held applicable to the case.1
13
Appellant's first point is that the shooting was not an assault and battery within the exceptions to the Tort Claims Act.
14
Section 2674 of the Act which states the liability of the United States reads' 'The United States shall be liable, respecting the provisions of this title relating to tort claims, in the same manner and to the same extent as a private individual under like circumstances, but shall not be liable for interest prior to judgment or for punitive damages. * * * '
15
Under Section 2680 the provisions of the Act shall not apply to '(h) Any claim arising out of assault, battery, false imprisonment, false arrest, malicious prosecution, abuse of process, libel, slander, misrepresentation, deceit, or interference with contract rights.'
16
The Court found, and it has compelling support in the record, that the sentry Foote directed Lewis and Kinney to wait. In spite of Foote's warning Lewis instructed Kinney to drive on. Kinney refused, saying to Lewis that Foote had a gun. Lewis ordered Kinney out of the car and Kinney obeyed. Lewis moved into the driver's seat and started to drive away from the gate. Then, as found in finding #9, 'Private Foote ran alongside the car and again instructed the plaintiff Lewis to stop the car, but Lewis continued to drive away from the gate.' Foote shouted three times at Lewis to halt. Lewis continued on and Foote fired two warning shots in the air. Lewis did not stop and Foote fired twice at the car's left rear tire which, according to the Court's finding of act, was approximately fifty yards away from him. One shot hit the left rear fender. The second also struck on the left side of the car going through the left side of the rear window. This would seem rather good marksmanship with a .45 caliber automatic pistol at 150 feet and a receding target. Even so and though Private Foote had no intention of hitting Lewis it can be assumed that in the circumstances he realized that firing at the machine's left rear tire while Lewis was in the left front seat could readily produce that result or at least that it was well within the possibilities of such act. And while Foote had no wish to shoot Lewis his entire purpose in firing at the automobile was to cause apprehension of harm in Lewis so that he would stop his automobile. Lewis, from his own testimony, was on reasonable notice that if he insisted on driving away in violation of the sentry's order to him, he might be shot at. The Marine guard had been alongside of him. He denies that the guard told Kinney and himself not to leave but he does state that Kinney, who had been driving and who was still in the driver's seat, said to him, 'I won't drive away because the man has a gun.' It was at that time that Lewis ordered Kinney out of the latter's own car and took over the driving himself. And it was the shooting of Lewis soon afterwards that the Trial Court found to be excessive force under the particular circumstances and therefore an assault by Foote upon Lewis.
17
While No New Jersey decision has been seen which is on all fours with the present facts, the opinion in Williams v. Lubbering, 73 N.J.L. 317, 319, 63 A. 90, 91, an action for assault and battery, does clearly indicate that New Jersey follows the general legal principle involved, namely, that a person privileged to use adequate physical force to accomplish his lawful result may be liable for an assault where he uses excessive force.2 And see Castner v. Sliker, 33 N.J.L. 507; West Jersey & Seashore R.R. Co. v. Welsh, 62 N.J.L. 655, 42 A. 736; Letts v. Hoboken R., Warehouse & Steamship Connecting Co., 70 N.J.L. 358, 57 A. 392; Rittenhoffer v. Cutter, 83 N.J.L. 613, 83 A. 873; Vitolo v. Nicotera Loan Co., 160 A. 89, 10 N.J.Misc. 624.
18
If we understand appellant's point correctly it centers around the proposition that the shooting of Lewis cannot be an assault and battery because Foote did not intend to shoot him. There are no New Jersey decisions cited which actually support that argument. Bouvier's definition of assault and battery as quoted in Tomlin v. Hildreth, 65 N.J.L. 438, 446, 47 A. 649, 651 is so urged. But it in nowise conflicts with the excessive force theory and finding of the court below.3 Cerri v. United States, D.C.N.D. Cal., 80 F. Supp. 831, also relied on by appellant, is sharply distinguishable on its facts. There a sentry fired after a fugitive into a crowd of people and hit plaintiff, an innocent bystander. Cf. Edgin v. Talley, 1925, 169 Ark. 662, 276 S.W. 591, 42 A.L.R. 1194.
19
On the question of intention, the closest New Jersey case to the facts which we have seen is DeMarentille v. Oliver, 2 N.J.L. 379 (Reprint page 358), where plaintiff was sitting in a horse-drawn carriage when defendant struck the horse with a club causing it to run away with resulting injury to plaintiff. Justice Pennington thought that defendant's action constituted an assault upon the person of the plaintiff though his conclusion in that regard was really dictum. And see Clark v. Downing, 55 Vt. 259, 45 Am.Rep. 612; Bull v. Colton, 22 Barb.,N.Y., 94; Singer Sewing Machine Co. v. Phipps, 49 Ind.App. 116, 94 N.E. 793.
20
Appellant in this connection quotes with approval the definition of assault from Section 21 of the Restatement of the Law of Torts. It is there stated that the intention necessary to constitute an assault is, among other things, an intention to put the other or a third person in apprehension of an immediate and harmful or offensive contact. This hardly helps appellant for it was precisely Foote's purpose in firing at Lewis. Section 13 of the Restatement of Torts in defining a battery conveys the identical thought saying, among other things, that the actor is liable if the act is done with the intention of bringing about an apprehension of a harmful or offensive contact. And see Prosser on Torts (1941 Ed.) p. 47.
21
There is evidence to support the lower court in finding that Foote used excessive force in the light of all the surrounding circumstances. We accept that finding as we must. With that finding properly in the case the conclusion on which it is based that Foote committed an assault and battery upon Lewis is sound law.
22
Appellant's other point is that he was not guilty of contributory negligence. The theory advanced is that his negligence in driving away, if he was negligent, did not contribute to the shooting. In support of this it is said in appellant's brief that 'The plaintiff was not aware of the series of events which led up to the firing of the shots at the left rear wheel and a considerable interval elapsed.' That statement is contrary to finding of fact #9 which reads in part: 'It is found as a fact that Lewis did use profanity and was abusive on one or more instances on the date in question, and engaged in more than one altercation with the Marine and civilian police personnel of the naval reservation, * * * . Private Foote directed the occupants of the car, which was being driven by Kinney, that they would have to wait and Kinney stopped the car. The plaintiff Lewis instructed his employee Kinney to drive on in spite of the sentry's warning, but Kinney refused and Lewis ordered him to leave the car, which Kinney did, Lewis moving into the driver's seat and starting to drive away from the gate. Private Foote ran alongside the car and again instructed the plaintiff Lewis to stop the car, but Lewis continued to drive away from the gate.'
23
As we have already seen, there was evidence, an important part of it by Lewis himself, justifying this finding and we agree with the contingent conclusion of law namely, that if Foote's action in shooting at the automobile did not constitute assault and battery but was considered to be an act of negligence in law, Lewis was guilty of contributory negligence because of his failure to stop when so ordered by the sentry.
24
Appellant, urging that his actions were merely conditions of the shooting not a part of the cause, argues that the shooting was not conceived by the sentry until he had driven away from the gate. That contention, if true, would be of no importance but even so it is not reasonably inferable from the evidence. The sentry, Foote, was under orders to hold the car. He knew he could not physically do so and from what he said, as above quoted, he was plainly prepared to use his pistol, if necessary, to stop it. Under general orders he had to use all means at his disposal to prevent Lewis from leaving the base. On his own story Lewis was aware of the specific danger that the sentry would use his weapon to stop the car from being driven away for only a few moments previous his own employee, Kinney, had flatly refused to drive the car off the base because, as he said, the sentry had a gun. Despite the apparent situation it was at that very time that Lewis made Kinney leave the automobile, and operating the car himself started away from the base. His deliberate action obligated the sentry under his orders to stop him if possible. The sentry obtained no compliance as a result of his commands to halt nor from his warning shots. To obey his orders and stop the car he had one resource left. He used it in firing at the tire. That consequence and the mischance of a stray bullet striking him, as we see it, was reasonably foreseeable by Lewis and directly precipitated by him.4
25
The judgment of the District Court will be affirmed.
1
See 28 U.S.C. § 1346(b); Feres v. United States, 340 U.S. 135, 142, 71 S. Ct. 153, 95 L. Ed. 152. The Tort Claims Procedure Act itself, Section 2672, expressly provides that the Government's liability for the act or omission of one of its employees while acting within the scope of his office or employment depends on whether it took place ' * * * under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.' That section of the Act deals particularly with administrative adjustment of claims of $1,000 or less but that the law of the place rule applies generally to the Act is made clear by Section 2674 which states that 'The United States shall be liable, * * * in the same manner and to the same extent as a private individual under like circumstances, * * * .' With the occurrence happening in New Jersey the private individual's conduct in 'like circumstances' would of course be judged by New Jersey law. The second paragraph of 2674 also strongly indicates the applicability of this same construction as it limits the liability of the United States to compensatory damages where the law of the place provides for damages only punitive in nature. Cf. State of Maryland to the Use of Burkhardt v. United States, 4 Cir., 165 F.2d 869
2
In that case a tradesman attempted to enter his customer tenant's premises over the janitor's opposition. The court held that the tradesman, after warning the janitor of his purpose, could use adequate force to remove him but that it was a jury question 'whether the defendant used excessive physical force in removing the plaintiff as an obstruction to the exercise of his right to use the passage.'
3
The quotation reads: 'An 'assault' is defined as an unlawful offer or attempt, with force or violence, to do a corporeal hurt to another, and, when coupled with a battery, is an unlawful beating, or other wrongful physical violence or constraint, inflicted upon a human being without his consent. Bouv.Law Dictionary, Rawle's Third Rev., tit. 'Assault,' page 152; Id., tit. 'Battery,' page 192.'
4
See Kaufman v. Pennsylvania R.R. Co., 2 N.J. 318, 323, 66 A.2d 527, for the latest expression by the New Jersey Supreme Court of the rule that a plaintiff cannot recover if his own negligence contributes to his injury in such a way that if he had not been negligent he would not have been injured by defendant's action; also Card v. Carrigan, 137 N.J.L. 722, 61 A.2d 263; Harper v. Erie Railway Co., 32 N.J.L. 88 | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1555810/ | 36 So.3d 180 (2010)
FL-CARROLLWOOD CARE CENTER, LLC; Senior Health Management, LLC; Senior Health Management-Gold Coast, LLC; Dan Davis; Rick Knight; and Carla Russo, Appellants,
v.
Loly JARAMILLO, as Personal Representative of the Estate of Jerry Jaramillo, Sr., Deceased; WKTM-Florida, LLC; CSE SNF Holding, LLC; and Capital Source, Inc. (as to Carrollwood Care Center), Appellees.
No. 2D09-2896.
District Court of Appeal of Florida, Second District.
June 4, 2010.
*181 Brooke Madonna and Amy L. Christiansen of Spector Gadon & Rosen, LLP, St. Petersburg, for Appellants.
Isaac R. Ruiz-Carus of Wilkes & McHugh, P.A., for Appellee Loly Jaramillo.
No appearance for Appellees WKTM-Florida, LLC; CSE SNF Holding, LLC; and Capital Source, Inc.
MORRIS, Judge.
FL-Carrollwood Care Center, LLC; Senior Health Management, LLC; Senior Health Management-Gold Coast, LLC; Dan Davis; Rick Knight; and Carla Russo (collectively referred to as the appellants) appeal a nonfinal order denying their motion to compel arbitration in a civil action filed by the estate of Jerry Jaramillo, Sr. (the Estate), against the appellants. We reverse the order and remand for further proceedings.
The Estate filed a complaint against the appellants for violations of chapters 400 and 415, Florida Statutes (2006), and common law breach of fiduciary duty, relating to the care and treatment received by Jerry Jaramillo when he was a resident at a nursing home operated by the appellants. The appellants filed a motion to compel arbitration pursuant to the terms of an arbitration agreement signed by Jerry Jaramillo's wife and attorney-in-fact, Loly Jaramillo, when Jerry Jaramillo entered the care of the nursing home.
The trial court held a hearing on the appellants' motion to compel arbitration. The Estate argued that the arbitration agreement is not enforceable because it is substantively unconscionable because it limits discovery and economic damages, which the Estate argued is contrary to the remedial purpose of chapter 400. The Estate also argued that the agreement is procedurally unconscionable and proffered testimony relevant to that factual question. The appellants responded that the resolution of such a factual question would require an evidentiary hearing. When the appellants argued that any unconscionable provisions of the agreement are severable, the Estate responded that severability is only an issue when considering whether a provision is against public policy and the Estate specifically stated that it was not arguing that the agreement is against public policy. At the conclusion of the hearing, the trial court denied the motion, stating that "it's against public policy" and referring to this court's opinion in Woebse v. Health Care & Retirement Corp. of America, 977 So.2d 630 (Fla. 2d DCA 2008).
On appeal, the appellants argue that the trial court misapplied this court's decision in Woebse and that the trial court did not employ the proper unconscionability analysis. The Estate concedes that the trial *182 court should have held an evidentiary hearing on the issue of unconscionability. We agree with the appellants' arguments on these points.
The trial court erred in denying the motion to compel arbitration on the basis of public policy because the public policy issue was never raised by the Estate and this court's decision in Woebse did not turn on the issue of public policy. See Woebse, 977 So.2d at 633-35 & n. 5 (reversing on the basis of unconscionability and noting that "the issue of whether an agreement is void for violating public policy is a separate and distinct issue from whether an agreement is unconscionable"). We also note that the issue of whether an arbitration agreement is void as being against public policy is an issue that is for the arbiter in the first instance. See Jaylene, Inc. v. Steuer ex rel. Paradise, 22 So.3d 711, 713 (Fla. 2d DCA 2009); Rollins, Inc. v. Lighthouse Bay Holdings, Ltd., 898 So.2d 86, 89 (Fla. 2d DCA 2005).
The trial court should have considered the issue raised by the Estate in ruling on the appellants' motion to compel arbitration. "When the `party opposing arbitration disputes the ... validity of the agreement to arbitrate, the trial court must resolve that issue as a part of its consideration of the motion seeking to compel arbitration.'" Estate of Blanchard ex rel. Blanchard v. Cent. Park Lodges (Tarpon Springs), Inc., 805 So.2d 6, 9 (Fla. 2d DCA 2001) (quoting Hill v. Ray Carter Auto Sales, Inc., 745 So.2d 1136, 1138 (Fla. 1st DCA 1999)). "Section 682.03(1), Florida Statutes [ (2008) ], furnishes a guide to the procedure that the trial court must follow in" resolving the validity of an agreement to arbitrate. Tandem Health Care of St. Petersburg, Inc. v. Whitney, 897 So.2d 531, 532 (Fla. 2d DCA 2005). The statute provides as follows:
A party to an agreement or provision for arbitration subject to this law claiming the neglect or refusal of another party thereto to comply therewith may make application to the court for an order directing the parties to proceed with arbitration in accordance with the terms thereof. If the court is satisfied that no substantial issue exists as to the making of the agreement or provision, it shall grant the application. If the court shall find that a substantial issue is raised as to the making of the agreement or provision, it shall summarily hear and determine the issue and, according to its determination, shall grant or deny the application.
§ 682.03(1); see also Estate of Blanchard ex rel. Blanchard, 805 So.2d at 9 ("If there are disputed issues regarding the making of the agreement, the court must summarily hear and determine the issue in an expedited evidentiary hearing." (citing Jalis Constr., Inc. v. Mintz, 724 So.2d 1254 (Fla. 4th DCA 1999))).
"To succeed on an unconscionability claim, there must be a showing of both procedural and substantive unconscionability." Woebse, 977 So.2d at 632 (citing Bland ex rel. Coker v. Health Care & Ret. Corp. of Am., 927 So.2d 252, 256 (Fla. 2d DCA 2006)). Procedural unconscionability necessarily takes into account the manner in which the agreement was made. Id. At the hearing, the Estate argued that
the facts are identical, really, to the Woebse case, in that it was a five-minute process where she was told to sign here and here, that she didn't read the agreement. It wasn't explained as an arbitration agreement to her. It was not explained that it was a voluntary process.
Thus, the Estate sufficiently demonstrated that a disputed issue exists as to the making of the agreement so as to require an *183 evidentiary hearing. See Linden v. Auto Trend, Inc., 923 So.2d 1281, 1283 (Fla. 4th DCA 2006) (recognizing that a party may demonstrate that a disputed issue exists as to the making of an arbitration agreement through arguments of counsel at a hearing). Accordingly, the trial court should have held an evidentiary hearing to resolve the issue of procedural unconscionability.
If the trial court concludes that the agreement is procedurally unconscionable, the trial court must also determine whether the agreement is substantively unconscionable on the basis that it limits discovery and noneconomic damages. See, e.g., Prieto v. Healthcare & Ret. Corp. of Am., 919 So.2d 531, 533 (Fla. 3d DCA 2005) ("The agreement herein deprives the nursing home resident of significant remedies provided for by the statutes. Specifically, it limits non-economic [sic] damages, bars punitive damages and attorney's fees, and restricts access to discovery necessary to prove statutory violations. For these reasons, we conclude that the agreement is substantively unconscionable." (footnote omitted)); Romano ex rel. Romano v. Manor Care, Inc., 861 So.2d 59, 62-63 (Fla. 4th DCA 2003) (holding agreement was substantively unconscionable because it prevented arbiter from awarding punitive damages and attorney's fees, awards that were intended by the legislature to be awardable); see also Woebse, 977 So.2d at 634-35 (agreeing with and adopting analysis in Romano and holding that arbitration agreement identical to one in Romano was substantively unconscionable because it limited the right to punitive damages).
Because the trial court did not employ an unconscionability analysis and instead ruled on the issue of public policy which was not before it, we reverse the order denying the appellants' motion to compel arbitration and remand for the trial court to resolve the issue of unconscionability in a manner consistent with this opinion. We do not address the other issues raised by the appellants on appeal as they are either moot or premature.
Reversed and remanded.
NORTHCUTT and VILLANTI, JJ., Concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555583/ | 36 So.3d 660 (2010)
McKIRE
v.
STATE.
No. 1D10-1346.
District Court of Appeal of Florida, First District.
May 25, 2010.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555850/ | 171 F.Supp. 541 (1958)
CHRYSLER CORPORATION, a Delaware Corporation, Plaintiff,
v.
LONG & LONG, INC., Commercial Credit Corporation, a Maryland Corp., James P. Long, Sr., Eleanor A. Long, United States of America, L. C. Laviolette, d/b/a Detroit Ad-Ver-Tis-Er, Harold E. Stoll, Wayne County Treasurer, Defendants.
Civ. No. 13843.
United States District Court E. D. Michigan, Southern Division.
December 30, 1958.
*542 Roy F. Andes, Detroit, Mich., for James P. Long, Sr., Eleanor A. Long, and Long & Long, Inc.
Bernard F. Zinn, Detroit, Mich., for Commercial Credit Corp.
Elmer L. Pfeifle, Jr., Asst. U. S. Atty., Detroit, Mich., for United States.
Samuel H. Olsen, Prosecuting Atty., of Wayne County, Detroit, Mich., for Wayne County and Wayne County Treasurer.
O'SULLIVAN, District Judge.
This Cause was submitted upon a stipulation of facts, which the Court adopts as its Findings of Fact.
For a better understanding, however, of the Court's Opinion and Conclusions of Law, the following should be recited. The subject matter of this suit is the sum of $25,518.56, deposited with this Court by the plaintiff, Chrysler Corporation, incident to its interpleader. $1,035 of this fund has been paid to the plaintiff for attorney fees and costs, leaving $24,483.56 available for distribution among the defendant claimants. This fund came into existence under the following circumstances: defendant Long & Long, Inc., a Michigan Corporation, was a Chrysler dealer. In early 1954, its franchise was cancelled and it returned to the Chrysler Corporation certain parts and equipment and was given credit therefor by the Chrysler Corporation. This credit, finally determined on August 10, 1954, was the sum deposited in court. The defendants assert conflicting claims and priorities to the balance of this fund. Their respective claims are as follows:
1) James P. Long, Sr., and Eleanor A. Long, his wife: On August 16, 1952, these defendants loaned to Long & Long, Inc., the sum of $177,718.26, taking, on that date, the corporation's note therefor, secured by a chattel mortgage of even date. At all times involved herein, said corporation continued to be indebted to the said individual Longs, who will be referred to hereafter as the Longs, thereunder, in an amount upwards of $125,000. The chattel mortgage was recorded in the Wayne County Register of Deeds office on August 3, 1953. Prior to March 9, 1954, the individual Longs took possession of the goods covered by the chattel mortgage. On or about March 9, 1954, they joined with the corporate defendant Long & Long, Inc., in executing a promissory note to the Commercial Credit Corporation in the sum of $25,486.58 and subordinated their aforementioned chattel mortgage to a new mortgage then given by Long & Long, Inc., to Commercial Credit Corporation, securing said *543 last mentioned note and covering the same chattels that were subject to the earlier chattel mortgage held by the individual Longs. At the time of this latter transaction, the transfer to Chrysler Corporation of the property covered by both chattel mortgages was in contemplation and Long & Long, Inc., gave assignments of the proceeds that would arise from such transfer to the Commercial Credit Corporation and to the individual Longs, the assignment to the latter being, by agreement, subordinated to the chattel mortgage and assignment given to the Commercial Credit Corporation. The aforesaid assignment to the Commercial Credit Corporation was dated March 9, 1954, and the assignment to the individual Longs was dated March 10, 1954. There is no question about the validity and bona fides of the mortgage given by Long & Long, Inc., to the individual Longs in 1952. It was properly recorded, as required by Michigan statute, on August 3, 1953.
The individual Longs claim they are entitled to the fund on deposit with this court, less the amount due Commercial Credit Corporation upon its note from Long & Long, Inc. The stipulation of facts recites that the amount owed on this latter note at the time of the commencement of the interpleader proceedings was the principal sum of $11,664.07. The note bore interest at the rate of six percent per annum.
2) Commercial Credit Corporation: Commercial Credit Corporation, using the trust receipt method, had been financing the purchase of automobiles by Long & Long, Inc., as a Chrysler dealer and on or about March 9, 1954, Long & Long, Inc., was indebted to Commercial Credit Corporation thereon in the sum of $120,945.86. In addition to said debt, Long & Long, Inc., was then indebted to Commercial Credit in the sum of $25,486.58, which represented the amount owing to Commercial Credit Corporation by reason of the failure of Long & Long, Inc., to have accounted to Commercial Credit Corporation for all the proceeds of the sale of motor vehicles which were subject to trust receipts. On March 9, 1954, Long & Long, Inc., and defendants James P. Long, Sr., and Eleanor A. Long, his wife, joined in executing the aforesaid promissory note to defendant Commercial Credit Corporation in the amount of $25,486.58. The said chattel mortgage securing this note covered various parts and equipment, as well as future acquisitions by the mortgagor and specifically covered accounts receivable then owned by the mortgagor and such accounts as might thereafter be owned by the mortgagor. On the same date the assignment was executed by Long & Long, Inc., covering whatever credits might thereafter become due to Long & Long, Inc., by reason of its return to Chrysler Corporation of various parts and equipment for credit. As stated above, the balance owing on the last mentioned note at the commencement of this litigation was the sum of $11,664.07. Commercial Credit Corporation asserts its right to participate in the fund on deposit to the extent of the aforesaid principal amount, together with interest to December 9, 1957, in the amount of $3,624.61 and additional interest upon the aforesaid principal sum from and after December 9, 1957, at the rate of six percent.
3) United States of America: On January 15, 1954, and February 12, 1954, the District Director of Internal Revenue at Detroit, Michigan, assessed Federal income taxes against Long & Long, Inc., for the years 1945, 1946, 1948 and 1950. The said Director filed notice of the liens arising from such tax assessments with the Register of Deeds office for Wayne County, Michigan, during the month of May, 1954, and not prior thereto. It is conceded that the tax claims of the United States exceed the sum of $50,000. The United States of America claim a superior right to all defendants to the fund on deposit by reason of said liens.
4) Wayne County and the City of Hamtramck: The City of Hamtramck, Michigan, levied a personal property tax against the personal property of Long & Long, Inc., on January 1, 1953, in the amount of $1,372.04, which said taxes *544 were due and payable on July 1, 1953. On December 1, 1953, the Treasurer of the City of Hamtramck assessed an additional personal property tax against said Long & Long, Inc., for county taxes in the sum of $564.04. The total amount of these taxes was $1,936.08 and was duly returned delinquent to Wayne County Treasurer as of March 1, 1954. A four percent collection fee of $77.45 was assessed, and it is claimed that interest has been accruing upon these unpaid taxes at the rate of one-half of one percent per month from March 1, 1954.
These taxing authorities claim they are entitled to that much of the money on deposit as represents the amount of the aforesaid taxes with accumulated interest and penalties. They assert their right to be superior to the claims of all the other defendants.
5) L. C. Laviolette: This defendant was named in the interpleader and duly served, but has filed no answer or other pleading in the cause. Accordingly, there is no claim as to him pending in this litigation.
Conclusions of Law
(a) Personal property taxes of the City of Hamtramck and the County of Wayne: The Hamtramck City Charter provides that personal property taxes shall be a lien on all personal property of the persons assessed, from and after the first day of July of each year and shall take precedence of "any sale, assignment or chattel mortgage, levy or other lien, on such personal property executed or made after said first day of July, except where such property is actually sold in the regular course of trade."
The Michigan statute covering the lien of the taxing authorities for personal property taxes (M.S.A. § 7.81, Comp. Laws Mich.1948, § 211.40) provides:
"The personal property taxes hereafter levied or assessed by any city or village shall be a first lien, prior, superior and paramount to any other claims, liens and encumbrances whatsoever upon the personal property assessed as herein provided, any provisions in the charter of such cities or villages to the contrary notwithstanding."
Although the Charter provisions of the City of Hamtramck would appear to make the lien for personal property taxes superior only to chattel mortgages executed on or after July 1, the date when the tax becomes due, the state statute provides no limitation upon the priority of the tax lien to chattel mortgages or other liens whether coming into existence before or after the date on which the lien for personal property taxes become effective. Briefs filed make reference to various Michigan cases, to wit: Lucking v. Ballantyne, 132 Mich. 584, 94 N.W. 8; Dunitz v. Albert Pick & Co., 241 Mich. 55, 216 N.W. 382; and Detroit Trust Co. v. City of Detroit, 269 Mich. 81, 256 N.W. 811, for the proposition that the chattel mortgage of the individual Longs is superior to the personal property tax liens. At the time of these decisions, the Michigan statute did not contain the provision quoted above providing for the priority of such tax liens over all other liens of whatever kind or nature and of whatever origin in time. These cases cited had to do with the question of whether or not a lien for personal property tax was superior to a chattel mortgage lien created prior to the effective date of the tax. Since these decisions, the Michigan statute has been amended (Act 38, P.A. 1934 (1st Ex.Sess.)) to specifically make a lien for personal property taxes superior to a chattel mortgage without reference to the time when the chattel mortgage lien was created or perfected. Construing this statute, the Supreme Court of Michigan has confirmed such superiority. In re Dissolution of Ever Krisp Food Products Co., 307 Mich. 182, 207, 11 N.W.2d 852; In re Rite-Way Tool and Manufacturing Co., 333 Mich. 551, 53 N.W.2d 373. The liens of the municipalities for personal property taxes came into being prior to the assessment and notice of the tax liens of the United States.
The fact that the property upon which this personal property tax lien was affixed *545 was sold prior to any enforcement of the lien does not, in this Court's opinion, detract from the municipal taxing authorities recovering the amount of their lien from the proceeds of the sale of the property subject thereto.
"The owner of the property cannot sell or remove the property, so as to effect the lien, unless the lienor consents or unless he does so under an order of court. It has been held that, where property encumbered by any fixed lien is sold free from the lien, the proceeds stand in the place of the thing sold and the lien attaches to the proceeds." 53 C.J.S. Liens § 12, p. 859. See also, In re Ever Krisp Food Products Co., supra.
Accordingly, this Court is of the opinion that the amount of the personal property taxes owing to the City of Hamtramck and the County of Wayne, with penalties and interest to date, shall first be paid out of the fund deposited under the interpleader.
(b) Claim of the United States of America: As indicated above, the stipulation of facts raises no question as to the bona fides of the chattel mortgage given by Long & Long, Inc., to James P. Long, Sr., and Eleanor A. Long, his wife, on August 16, 1952. This chattel mortgage was regularly recorded as required by Michigan law on August 3, 1953. Briefs of the United States attack the validity of this recording on the ground that the affidavit required by Michigan statute (M.S.A. 26.929, Comp.Laws Mich. 1948, § 566.140) was not affixed to the mortgage when recorded. In this the Government is in error, as the exhibit attached to the stipulation of facts as Exhibit A discloses that the statutory affidavit was affixed to the chattel mortgage when recorded. This chattel mortgage was, therefore, perfected as of August 3, 1953. The chattel mortgage to Commercial Credit Corporation was executed on March 9, 1954, and was properly recorded in the office of the Register of Deeds on March 10, 1954, thereby becoming perfected as a lien upon the property in question. The Director of Internal Revenue gave notice of his tax lien in the month of May, 1954. The Internal Revenue Code of 1939, Section 3672, 26 U.S. C.A. § 3672, provides in relation to the priority of a lien for taxes such as is involved here, as follows:
"Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector.
"(1) In the office in which the filing of such notice is authorized by the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law authorized the filing of such notice in an office within the State or Territory."
It is not disputed that the place of filing of such notice of tax lien under Michigan law is the Register of Deeds office. The filing of such notice in May, 1954, was subsequent to the perfecting of chattel mortgage liens of the individual Longs and the Commercial Credit Corporation. The United States' lien was, therefore, subordinate to the lien of the chattel mortgagees and likewise to that of the municipal taxing authorities.
In its brief, the United States questions whether or not the consideration for the chattel mortgage to the Commercial Credit Corporation was a present one. The stipulation of facts, however, sets forth that such mortgage was given for a present consideration.
James P. Long, Sr., and his wife, and the Commercial Credit Corporation both received assignments from Long & Long, Inc., specifically assigning to them any accounts receivable that would arise out of the contemplated transfer of mortgaged property to the Chrysler Corporation. It is claimed by the United States, however, that the chattel mortgage liens applied only to the personal property covered by the mortgages and not to the proceeds of a subsequent sale thereof. A reading of both of the chattel mortgages in question discloses that they covered *546 after-acquired property of the mortgagor. The mortgage to James P. Long, Sr., and wife, mentioned accounts receivable without specifically referring to accounts receivable that might thereafter arise, but did cover any "personal property of every kind and nature which at any time hereafter may be purchased for, or added to, or used in connection with said personal property or business". The mortgage to the Commercial Credit Corporation specifically covered all accounts receivable which might at any time hereafter be added to or used in connection with the personal property subject to the chattel mortgage.
The United States claims that somewhere between the time of the perfecting of the chattel mortgage liens of James P. Long, Sr., and his wife, and Commercial Credit Corporation, and the time that the account receivable became payable from the Chrysler Corporation to the mortgagor in the aforesaid chattel mortgages, the liens thereof were lost and that the lien of the United States for its taxes became a prior lien. This Court does not think so. The Court believes that although not spelled out with as nice language as might have been employed, the two chattel mortgages did in fact constitute mortgages upon the accounts receivable which later accrued to Long & Long, Inc., from Chrysler Corporation. The Supreme Court of Michigan has held that book accounts may be made subject to chattel mortgages and that such a mortgage may apply to future as well as existing accounts.
In Dunn v. Michigan Club, 115 Mich. 409, 73 N.W. 386, a judgment creditor caused a writ of garnishment to be issued and sought to have such garnishment take precedence over a previous chattel mortgage which covered, among other things, present and future book accounts. In sustaining the priority of a chattel mortgage to an account receivable, the Supreme Court of Michigan said:
"It is no longer an open question in this state that accounts are the subject of assignment, and may be mortgaged, and this applies as well to future accounts as to existing accounts."
Aside from the question of whether or not a technical construction of the chattel mortgage given to James P. Long, Sr., and wife, sufficiently described future accounts receivable so as to constitute the chattel mortgage a lien upon accounts receivable, this Court is of the opinion that what was done here should in no way be construed as a relinquishment of the liens of the chattel mortgages in question.
On March 9, 1954, both James P. Long, Sr., and wife, and the Commercial Credit Corporation had valid liens which were prior in time and effectiveness to the notice of tax lien filed by the District Director of Internal Revenue. What they did in allowing the chattels to be delivered to Chrysler Corporation, taking at the same time assignments of the proceeds of credits to be issued by Chrysler Corporation, were but proceedings to protect and confirm the liens then existing. Mortgagees so protected should be allowed to recover their debts from the proceeds of the sale of property upon which they had a valid mortgage.
"A mortgagee is entitled to the proceeds of a sale of mortgaged property by the mortgagor when the sale is made upon the condition, agreement, or understanding that the proceeds shall be paid to the mortgagee or his representative. This right of the mortgagee is superior to the claims of the mortgagor, the mortgagor's creditors, a purchaser or other persons whose claims were inferior to the mortgage lien prior to the sale." 14 C.J.S. Chattel Mortgages § 266, p. 891.
Everything that was done by the chattel mortgagees in question evidenced a diligence to protect valid liens then existing. This Court does not feel that this diligence should be held to subordinate their rights to the tax lien of the United States.
Accordingly, it is this Court's opinion that out of the fund remaining after payment of the taxes of the City of Hamtramck *547 and the County of Wayne, there shall be paid to the Commercial Credit Corporation the balance owing it on its note and chattel mortgage, to wit: $11,664.07, with interest thereon at six percent, being the interest fixed in the note and mortgage, to this date. The balance of the fund shall be paid to the defendants James P. Long, Sr., and Eleanor A. Long, his wife.
The defendant James P. Long, Sr., and Eleanor A. Long, his wife, contend that interest on the balance owing to the Commercial Credit Corporation should not be allowed subsequent to the date of filing of the interpleader and the deposit of the fund with the Clerk of this court. In support of this contention, they cite various authorities for the proposition that where a debtor deposits money in court in an effort to have determined to whom the amount deposited should be paid, interest on the obligation of such debtor is suspended from the time of deposit of the funds. There is good reason for such principle, but this Court does not feel it applies in this case. We are not dealing with any obligation of the Chrysler Corporation as a debtor. The defendants James P. Long, Sr., and wife, were joint makers on the note to Commercial Credit Corporation, the balance of which is to be paid to Commercial Credit Corporation out of the fund now on deposit. There was nothing to prevent James P. Long, Sr., and wife, paying the note in question and thus stopping the running of interest.
Commercial Credit Corporation has filed in this cause a cross claim against Long & Long, Inc., and James P. Long, Sr., and Eleanor A. Long. They seek thereby to obtain a judgment against the last mentioned defendants for the amount of the balance due on its note and mortgage of March 9, 1954, with interest. The order to be entered under this Opinion shall provide for such a judgment with proper recitation that such judgment is rendered upon a written instrument and that on the date of delivery of such instrument James P. Long, Sr., and Eleanor A. Long were husband and wife, so that any execution to be issued upon said judgment will be in accordance with the provisions of Section 557.54 of Michigan Compiled Laws, 1948. Payment, however, to the Commercial Credit Corporation of the amount of its note with interest out of the fund now on deposit with the Clerk of this Court, shall constitute satisfaction of any such judgment.
A judgment in conformity with this Opinion may be presented for signature after submission to all counsel for approval as to form. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/449021/ | 756 F.2d 329
UNITED STATES of America, Appellee,v.John David MOSS; and Corvette Center, Inc., Appellants.
No. 83-5301.
United States Court of Appeals,Fourth Circuit.
Argued Oct. 31, 1984.Decided March 7, 1985.
Clifford R. Weckstein, Roanoke, Va. (Lichtenstein, Weckstein & Thomas, Roanoke, Va., on brief), for appellants.
Karen B. Peters, Asst. U.S. Atty., Roanoke, Va. (John P. Alderman, U.S. Atty., Roanoke, Va., on brief), for appellee.
Before ERVIN and WILKINSON, Circuit Judges, and MICHAEL, United States District Judge for the Western District of Virginia, sitting by designation.
ERVIN, Circuit Judge.
1
The defendants, John David Moss and Corvette Center Inc., were jointly indicted, tried, and convicted by a jury for various offenses involving the interstate purchase and sale of stolen automobiles in violation of 18 U.S.C. Secs. 2, 371, 2312 (1982). Moss was given a sentence that included five years of imprisonment, personal restitution, and a fine. Corvette Center also received a fine. Moss and Corvette Center appeal their convictions alleging that the district court committed several errors requiring reversal. We affirm.
2
Specifically, the defendants raise three issues on appeal that require our examination. First, they argue that the United States ("government") abused the grand jury process through its post-indictment use of the grand jury as a discovery mechanism. Second, they assert that any attempt by the trial court to explain the reasonable doubt standard constitutes reversible error per se, and alternatively, that the jury instruction in this case was misleading enough to require reversal. Finally, they contend that the district court's jury instruction that the mere number of witnesses testifying for either side was not conclusive on any issue constituted reversible error because no witnesses testified for the defendants. Although sympathetic to some of defendants' concerns on appeal, we conclude that the grand jury was not used improperly and that neither of the alleged instructional errors were sufficiently prejudicial to merit reversal.
I.
Factual Background
3
After an initial investigation by the grand jury, Moss, an automobile dealer, and his Virginia corporation, Corvette Center, were indicted along with others for conspiracy regarding the interstate transportation of stolen automobiles. Moss and Corvette Center were also charged with substantive counts concerning the theft and receipt of stolen parts and the sale of stolen automobiles. The defendants were, however, only convicted of selling and conspiracy to sell a stolen 1981 Corvette.
4
The evidence revealed that Moss ordered specific stolen automobiles from Dennis Murray, a Kentucky car thief. Moss ordered and obtained the 1981 Corvette from Murray to combine it with another stolen automobile he had already procured. The purpose of combining these two stolen vehicles was to produce a single saleable automobile that could not easily be traced to any outstanding stolen automobiles being sought by law enforcement officials. Such a process is known as vehicle or salvage "switching," and for those who regularly engage in this criminal endeavor, it is often very profitable.
5
Although the indictment was returned on May 12, 1983, the trial did not commence until November 7, 1983 because several continuances were granted. After the second trial continuance was granted, the government's attorney questioned two individuals before the grand jury: Donald Mason, an automobile rebuilder and salvage seller from North Carolina, and Bobby Clark, a North Carolina Division of Motor Vehicles Inspector. This inquiry concerned their apparent involvement in the defendants' conspiracy to sell stolen automobiles. According to the affidavit of John P. Alderman, the government's co-counsel, after the May indictment the government learned that Mason was a possible accomplice or co-conspirator of Moss. Continuing investigation by the FBI revealed that Mason appeared in the chain of title of the stolen Corvette and that he had obtained a "clean" North Carolina title for Moss. It thus became apparent that not only had the Corvette been stolen and its numbers switched, but the original Michigan salvage title had also been "laundered" and upgraded quickly in North Carolina. The laundering of title in North Carolina permitted the easy change in title back into saleable Virginia title. To accomplish this laundering of title, Mason misrepresented to the Division of Motor Vehicles in North Carolina that he was the true owner of the Corvette.
6
Mason and Clark's involvement in the conspiracy was not known until the FBI interviewed them on July 29th and August 1st of 1983. The information obtained in these interviews demonstrated Mason's responsibility for the laundering of title to numerous automobiles for Moss. With this information, the government ordered Mason and Clark before the grand jury to explore their involvement in Moss's auto theft scheme. In his affidavit, government co-counsel Alderman stated that he intended to supersede the Moss indictment by adding Mason as a co-conspirator thereby making him a co-defendant in the Moss trial. The Moss indictment, however, was never superseded because the government's evidentiary case against Mason was too weak to bring him to trial. Nevertheless, Mason and Clark did testify for the government at trial regarding the necessary salvage title trial although neither witness was impeached by any prior inconsistent statements made in their grand jury testimony.
II.
7
Propriety of the Post-Indictment Grand Jury Testimony
A. The Sole or Dominant Purpose Test
8
The defendants argue that the government abused the grand jury process by bringing Mason and Clark before the grand jury after Moss had already been indicted. The district court concluded that there was no abuse of the grand jury process because it was not used as a method of discovery by the government against Moss. We agree.
9
To protect the investigative function of the grand jury, we have recognized that "courts should not intervene in the grand jury process absent [a] compelling reason." In Re Grand Jury Subpoenas, 581 F.2d 1103, 1108 (4th Cir.1978) cert. denied, 440 U.S. 971, 99 S.Ct. 1533, 59 L.Ed.2d 787 (1979); see also United States v. (Under Seal), 714 F.2d 347, 350 (4th Cir.), cert. dismissed, --- U.S. ----, 104 S.Ct. 1019, 78 L.Ed.2d 354 (1983). It thus follows that "[a] presumption of regularity attaches to a grand jury's proceedings and appellants have the burden of demonstrating that an irregularity occurred." United States v. Woods, 544 F.2d 242, 250 (6th Cir.1976), cert. denied, 429 U.S. 1062, 97 S.Ct. 787, 50 L.Ed.2d 778 (1977). Although the courts firmly safeguard the investigatory power of the grand jury, it is the universal rule that prosecutors cannot utilize the grand jury solely or even primarily for the purpose of gathering evidence in pending litigation. (Under Seal), 714 F.2d at 349; In re Grand Jury Proceedings (Johanson), 632 F.2d 1033, 1041 (3d Cir.1980); United States v. Zarattini, 552 F.2d 753, 756 (7th Cir.), cert. denied, 431 U.S. 942, 97 S.Ct. 2661, 53 L.Ed.2d 262 (1977); United States v. Sellaro, 514 F.2d 114, 121-22 (8th Cir.1973), cert. denied, 421 U.S. 1013, 95 S.Ct. 2419, 44 L.Ed.2d 681 (1975); United States v. George, 444 F.2d 310, 314 (6th Cir.1971); United States v. Dardi, 330 F.2d 316, 336 (2d Cir.1964). Once a defendant has been indicted, the government is precluded from using the grand jury for the "sole or dominant purpose" of obtaining additional evidence against him. (Under Seal), 714 F.2d at 350; see also (Johanson), 632 F.2d at 1041.
10
On the other hand, the government's " 'good faith inquiry into other charges [not included in the indictment] ... is not prohibited even if it uncovers further evidence against an indicted person.' " Id. (quoting (Johanson ), 632 F.2d at 1041; accord Sellaro, 514 F.2d at 122; see also United States v. Braasch, 505 F.2d 139, 147 (7th Cir.1974), cert. denied, 421 U.S. 910, 95 S.Ct. 1561, 43 L.Ed.2d 775 (1975). Because the "grand jury's investigation is not fully carried out until every available clue has been run down and all witnesses examined in every proper way to find if a crime has been committed," United States v. Dionisio, 410 U.S. 1, 13, 93 S.Ct. 764, 771, 35 L.Ed.2d 67 (1973), the sole or dominant purpose test is necessary to prevent any undue intrusion into the investigatory power of the grand jury. Zarattini, 552 F.2d at 757. Lacking clairvoyance, grand juries must be allowed to investigate freely individuals suspected of involvement in crimes for which indictments have already been issued. When applied correctly, the sole or dominant purpose test plainly permits grand juries to investigate additional individuals who become suspects only after an indictment has been returned, while precluding improper use of the grand jury for discovery. Unless the government's sole or dominant purpose in this case was to use the grand jury as a substitute for discovery when it questioned Mason and Clark before the grand jury, we cannot conclude that the grand jury process was abused.
B.
Applying the Sole or Dominant Purpose Test
11
The district court determined that the defendants failed to satisfy their burden of demonstrating that the sole or dominant purpose of the government in questioning Mason and Clark before the grand jury was to discover additional evidence against Moss. To the contrary, the district court found that the government's purpose for bringing Mason and Clark before the grand jury was to obtain sufficient evidence to prosecute Mason along with Moss. Like questions involving intent, the finding of a district court regarding the sole or dominant purpose of the government in bringing additional witnesses before the grand jury for post-indictment questioning may be reversed only if it is clearly erroneous. See Pullman-Standard v. Swint, 456 U.S. 273, 289-90, 102 S.Ct. 1781, 1790-91, 72 L.Ed.2d 66 (1982). After careful review of the evidence, we are convinced that the district court's findings regarding the government's sole or dominant purpose were not clearly erroneous. Accordingly, we affirm the district court's determination that the government did not misuse the grand jury process.
III.
The Reasonable Doubt Instruction
12
The defendants contend that (1) the mere attempt to define reasonable doubt in a jury instruction constitutes reversible error, and even if such an instruction does not require automatic reversal, that (2) the particular explanation of reasonable doubt given in this case is sufficiently misleading to warrant reversal. We find neither of these arguments persuasive.
13
The defendants direct their complaint regarding the definition of reasonable doubt to the following portion of the jury instructions:
14
Now, proof beyond a reasonable doubt, therefore, is proof of such a convincing character that you would be willing to rely upon it without hesitation in your most important affairs of your own.
15
(J.A. 168). The practice of defining reasonable doubt in the charge to the jury has been widely condemned. Smith v. Bordenkircher, 718 F.2d 1273, 1276 (4th Cir.1983); Whiteside v. Parke, 705 F.2d 869, 871 (6th Cir.), cert. denied, --- U.S. ----, 104 S.Ct. 141, 78 L.Ed.2d 133 (1983); United States v. Martin-Trigona, 684 F.2d 485, 493 (7th Cir.1982); Dunn v. Perrin, 570 F.2d 21, 23 (1st Cir.), cert. denied, 437 U.S. 910, 98 S.Ct. 3102, 57 L.Ed.2d 1141 (1978); see also Taylor v. Kentucky, 436 U.S. 478, 488, 98 S.Ct. 1930, 1936, 56 L.Ed.2d 468 (1978). Even the Supreme Court has acknowledged that "[a]ttempts to explain the term 'reasonable doubt' do not usually result in making it any clearer to the minds of the jury." Holland v. United States, 348 U.S. 121, 140, 75 S.Ct. 127, 138, 99 L.Ed. 150 (1954). Recognizing that little can be gained from attempts to define reasonable doubt, while admitting that added confusion is often created by these well-intentioned judicial efforts, we join in the general condemnation of trial court attempts to define reasonable doubt in their jury instructions.
16
Mere attempts to define reasonable doubt do not, however, constitute reversible error per se. See, e.g., Bordenkircher, 718 F.2d at 1276; United States v. Regilio, 669 F.2d 1169 at 1178 (7th Cir.1981); United States v. Rodriguez, 585 F.2d 1234, 1240-42 (5th Cir.1978), cert. denied, 449 U.S. 835, 101 S.Ct. 108, 66 L.Ed.2d 41 (1980), modified on other grounds sub nom. Albernaz v. United States, 612 F.2d 906 (1980), aff'd 450 U.S. 333, 101 S.Ct. 1137, 67 L.Ed.2d 275 (1981); United States v. Magnano, 543 F.2d 431, 436-37 n. 4 (2d Cir.1976), cert. denied, 429 U.S. 1091, 97 S.Ct. 1101, 51 L.Ed.2d 536 (1977); United States v. Smith, 468 F.2d 381, 383 (3d Cir.1972); United States v. Christy, 444 F.2d 448, 450-51 (6th Cir.), cert. denied, 404 U.S. 949, 92 S.Ct. 293, 30 L.Ed.2d 266 (1971). District courts are again admonished not to define reasonable doubt in their jury instructions, but merely because they do so does not require reversal. We reject, therefore, the defendants' argument that any attempt to define reasonable doubt in a jury charge requires automatic reversal.
17
The defendants also argue that the specific definition of reasonable doubt given in this case is sufficiently bewildering and misleading to warrant reversal. The Seventh Circuit has held that where a reasonable doubt definition misleads or confuses the average juror reversal is necessary. Regilio, 669 F.2d at 1178. We agree that at some point a reasonable doubt definition may be so incomprehensible or potentially prejudicial to require reversal.
18
To determine whether such confusion or prejudice exists, the challenged instruction on reasonable doubt must be viewed in the particular context in which it is given. Baker v. United States, 412 F.2d 1069, 1073 (5th Cir.1969), cert. denied, 396 U.S. 1018, 90 S.Ct. 583, 24 L.Ed.2d 509 (1970); see also Bordenkircher, 718 F.2d at 1277. So long as the definition in the charge correctly conveys the concept of reasonable doubt, the charge will not be considered prejudicial enough to permit reversal. Holland, 348 U.S. at 140, 75 S.Ct. at 137; Smith, 468 F.2d at 383. The reasonable doubt definition given in this case emphasized that the degree of proof required for conviction had to be of "a convincing character" and that the jurors would have to be "willing to rely upon it without hesitation" in their "most important affairs." This instruction appears neither misleading nor confusing. It adequately conveyed the sometimes elusive concept of reasonable doubt and this was all that was required.1
19
In addition, the district court cautioned the jury in its charge that "the defendants are presumed to be innocent, and that presumption of innocence stays with them throughout every stage of the trial." (J.A. 167). The district court also informed the jury that "the government's burden of proof is a strict and heavy burden." (J.A. 167) These are precisely the type of ameliorating instructions that render harmless any confusion engendered by an unsuccessful attempt to define reasonable doubt. See Bordenkircher, 718 F.2d at 1277.
20
Even if we assume that the reasonable doubt definition given in this case tended to lessen the government's burden of proof, we find that the instructions on the presumption of innocence and the government's heavy burden of proof neutralized any possible prejudice resulting from the challenged definition.
IV.
The Number of Witnesses Instruction
21
The defendants presented no witnesses and no evidence at trial. Nevertheless, the district court gave the following number of witnesses instruction:
22
The weight of the evidence is not necessarily to be determined by the number of witnesses testifying to the existence or nonexistence of any fact. You may find that the testimony of a smaller number of witnesses as to a fact is more persuasive than that of a greater number of witnesses, or you may find that they are not persuasive at all.
23
(J.A. 172-173)
24
After the defendants objected and moved for a mistrial, the district court judge acknowledged that this instruction "probably was a round peg in a square hole," but because he found his error to be harmless he refused to take any remedial action. (J.A. 199).
25
Only adverse comment by the trial court judge on the defendant's refusal to testify warrants reversal. Lakeside v. Oregon, 435 U.S. 333, 338-39, 98 S.Ct. 1091, 1094-95, 55 L.Ed.2d 319 (1978). On its face, the district court's number of witnesses instruction was not an adverse comment on defendant's refusal to testify. Defendants argue, however, that such an instruction draws unnecessary and possibly prejudicial attention to their constitutionally protected decision not to present witnesses at trial.2
26
In Lakeside, the Supreme Court addressed the analogous issue of whether a protective instruction that the jury should not consider the defendant's failure to testify given over his objection constituted constitutional error. 435 U.S. at 333, 98 S.Ct. at 1092. The Supreme Court reasoned that the purpose of such an instruction was "to remove from the jury's deliberations any influence of unspoken adverse inferences," and therefore "[i]t would be strange indeed to conclude that this cautionary instruction violates the very constitutional provision it is intended to protect."3 Id. at 339, 98 S.Ct. at 1095.
27
Like the protective instruction given in Lakeside, the number of witnesses instruction is intended to protect defendants who frequently have fewer witnesses testify than the government from any adverse inferences that might be drawn from this fact. Further, the defendant in Lakeside objected to the trial court's protective instruction because he feared that the instruction would draw needless attention to his failure to testify. Id. at 339-40, 98 S.Ct. at 1094-95. This is the same concern that the defendants had when they objected to the number of witnesses instruction given below. Consequently, this challenged instruction did not violate defendants' privilege against compulsory self-incrimination guaranteed by the fifth and fourteenth amendments.
28
Viewing the number of witnesses instruction in its entire context, we also conclude that this instruction was harmless error. First, it is unlikely that any jury would ever fail to notice that the defendants produced no witnesses at trial. Second, there is no greater prejudice to a defendant from a number of witnesses instruction given when he has no witnesses and the government has two compared to when the defendant has a single witness and the government has ten witnesses available. Nevertheless, the defendants' argument presumes that the former instruction would constitute reversible error, while the latter would not be considered error at all. Third, the possible prejudice resulting from the number of witnesses instruction was lessened because the district court informed the jury in the same instruction that the government's large number of witnesses need not be considered "persuasive at all." (J.A. 173). Finally, the district court repeatedly cautioned the jury that "[t]here is no requirement that any defendant produce any evidence or testify in any case." (J.A. 167). For these reasons, any effects from the district court's misplaced number of witnesses instruction were undeniably benign.
29
District courts should refrain from giving a number of witnesses instruction when the defendant has no witnesses. In this case, however, we are persuaded that the number of witnesses instruction was neither a violation of defendants' fifth amendment rights nor reversible error.
30
Accordingly, the decision of the district court is
31
AFFIRMED.
1
The reasonable doubt instruction given by the district court was a variant of a commonly used pattern jury instruction:
Proof beyond a reasonable doubt must therefore be proof of such a convincing character that a reasonable person would not hesitate to rely and act upon it in the most important of his own affairs.
1
E. Devitt & C. Blackmar, Federal Jury Practice and Instructions Sec. 11.14 (3d ed. 1977). In this case the variance was merely grammatical and therefore not sufficient to require reversal. But we suggest that whenever a jury request makes an instruction defining reasonable doubt necessary, district courts should accurately replicate the pattern jury instruction used to avoid any unnecessary confusion
2
Although defendants' brief does not clearly indicate the specific source of their claimed constitutional violation, the only constitutional right that the challenged instruction might have violated was the fifth amendment guarantee against compulsory self-incrimination
3
Regarding this same question, Judge Learned Hand answered: It is no doubt better if a defendant requests no charge upon the subject, for the trial judge to say nothing about it; but to say that when he does, it is error, carries the doctrine of self-incrimination to an absurdity." Becher v. United States, 5 F.2d 45, 49 (2d Cir.1924), cert. denied, 267 U.S. 602, 45 S.Ct. 462, 69 L.Ed. 808 (1925) | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1556567/ | 30 So.3d 251 (2010)
In re MEDICAL REVIEW PANEL PROCEEDINGS OF Milton BERRY.
No. 2009-CA-0752.
Court of Appeal of Louisiana, Fourth Circuit.
January 27, 2010.
*252 Terry L. Bonnie, Terry L. Bonnie, APLC, Baton Rouge, LA, for Appellant, Milton Berry.
Peter E. Sperling, James P. Waldron, Frilot L.L.C., New Orleans, LA, for Tulane University Hospital and Clinic.
Bryan J. Knight, Stewart E. Niles, Jr., Michelle A. Bourque, Niles Bourque Fontana & Rice, L.L.C., New Orleans, LA, for Appellee, Dr. James Butler.
*253 (Court composed of Judge PATRICIA RIVET MURRAY, Judge TERRI F. LOVE, Judge MAX N. TOBIAS, JR., Judge EDWIN A. LOMBARD, Judge PAUL A. BONIN).
TERRI F. LOVE, Judge.
Plaintiff/Appellant, Milton Berry, has appealed the trial court's judgment granting an exception of prescription. Defendants, Tulane University Hospital and Clinic and Dr. James Butler filed exceptions of prescription, asserting that the appellant's claims had prescribed. The trial court granted their exceptions and it is from those judgments appellant appeals. We find sufficient support for the trial court's grant of the exceptions and affirm.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
Milton Berry ("Mr. Berry"), Plaintiff/Appellant, filed a request for review with the Louisiana Patient's Compensation Fund (PCF), alleging medical malpractice in the treatment of his right knee and naming as defendants, Ochsner Clinic Limited Liability at New Orleans, Infusion Partners-New Orleans, Dr. James Butler, Dr. Sunii, Dr. Witzig, Dr. Laundry,[1] Dr. Garcia, and Tulane University Hospital and Clinic.
Mr. Berry alleged medical malpractice as a result of injuries sustained from a series of twelve (12) unsuccessful right knee surgeries, spanning a period of six (6) years as follows:
Mr. Berry's treatment began in August of 1999, when Mr. Berry presented to Dr. Butler at Tulane University Hospital with complaints of pain in his right knee that occurred when walking and ascending or descending stairs. Dr. Butler examined Mr. Berry and conducted testing, after which he determined that Mr. Berry's knee was rubbing bone against bone. Dr. Butler concluded that a total knee replacement was necessary. The knee replacement was to increase flexion to 80 degrees and eliminate symptoms of pain.
In early 2000, Dr. Butler performed a total knee replacement, installing a prosthetic right knee. Mr. Berry then began physical therapy and participated in other routine therapy while an in-patient and as an out-patient. However, Mr. Berry continued to have pain and limitations in his knee, and a second knee surgery was also performed in early 2000. After the second knee surgery, Dr. Butler informed Mr. Berry that the problem arose from scar tissue and was told that one-in-a-million legs don't bend correctly.
Also, in March 2000, a third knee surgery was performed, resulting in scar tissue to the extent that the only way to correct it was to perform a fourth knee surgery in December 2000. In August 2001, a fifth knee surgery was performed to loosen screws in the knee in an attempt to achieve a 90-degree bend at the knee. However, after surgery, only a 70-degree bend was achieved.
Dr. Butler later performed a sixth and seventh knee surgery. After these surgeries, Mr. Berry's knee began to swell. In March 2002, Dr. Butler refused to see Mr. Berry. However, after Mr. Berry made demands, Dr. Butler saw Mr. Berry and told him that a bone was preventing the knee from bending at an 85-90-degree angle.
In the summer of 2004, Dr. Butler then performed an eighth knee surgery, during *254 which he cut more bone. Also in late 2004, a ninth knee surgery was performed, wherein Dr. Butler removed more bone and scar tissue. Mr. Berry's right leg began to turn blue after this ninth surgery.
Dr. Butler again refused to see Mr. Berry. During this timeframe, Mr. Berry's leg became infected and pus protruded from his leg upon touching. These problems persisted in 2004 and 2005, and Mr. Berry continued having the same problems with his knee.
Mr. Berry sought physical therapy, at which point a physical therapist advised Mr. Berry that he needed to see his doctor regarding worsening protrusion in the knee. In May 2005, a tenth surgery was performed to drain the infection from the knee and to clean and treat the prosthesis to fight detected bacteria. In December 2005, an eleventh and twelfth surgery were performed on Mr. Berry to insert cement in the knee and treat bacteria.
At the time of his original claim, Mr. Berry claimed that he was continually experiencing complications with his knee, on-going infection, and treatment. Mr. Berry averred that the defendants/appellees made mistakes during his surgical treatment process and unsuccessfully attempted to correct those mistakes with subsequent surgeries, which resulted in the appellant's original claim of medical malpractice. After six (6) years of treatment, Mr. Berry had a severely infected knee, needed removal of the original prosthesis to treat the infection, as well as the removal of bone to treat the infection, and suffered from continuing infection, pain and restrictions in his right knee. He also claimed a psychological component of injury, which he maintained arose as a result of the defendants' negligent treatment.
Mr. Berry's original claim of medical malpractice was dated September 19, 2007; a supplemental request for leave to amend that claim was made on the same date, and was received by the PCF on September 21, 2007.
On September 28, 2007, the PCF acknowledged receipt of Mr. Berry's September 19, 2007 filing by notice to Mr. Berry's counsel, and the PCF requested that a specific description of alleged malpractice as to each named defendant and complete names of healthcare providers be provided within 10 days of the date of the notice. The PCF also advised Mr. Berry that Act 961 of the 2003 Regular Session requires a filing fee of $100 per named, qualified healthcare provider; however the notice stated that qualification could not be yet determined without the supplemental information.
Mr. Berry filed an Amended Claim of Malpractice with the PCF on October 11, 2007, including the requested supplemental information, again naming Dr. James Butler and adding Tulane University Hospital and Clinic ("TUHC") as the defendants. Therein, Mr. Berry claimed that the care and treatment provided by Dr. Butler and TUHC during these procedures constituted negligence and a breach of the standard of care.
On January 8, 2008, the PCF informed Mr. Berry's counsel that his complaint was considered invalid and without effect due to his failure to timely remit the appropriate filing fee. This notice stated that previously, on October 22, 2007, the PCF advised Mr. Berry's counsel that he had 45 days to submit the requisite filing fee, however no such correspondence is contained in the record. On January 14, 2008, Plaintiff refiled the PCF complaint against Tulane University Hospital and Clinic ("TUHC") and Dr. Butler, reiterating the allegations contained in his October 11, 2007 PCF claim of medical malpractice.
*255 In response, the defendants filed Exceptions of Prescription, based on Mr. Berry's October 2007 PCF complaint being prescribed on its face as it was filed more than one year after the alleged negligent act(s) and the January 2008 complaint being filed more than one year after discovery of the act(s). The trial court granted the defendants' exceptions of Prescription and found Plaintiff's PCF Complaint was prescribed.
STANDARD OF REVIEW
"A court of appeal may not set aside a trial court's or a jury's finding of fact in absence of `manifest error' or unless it is `clearly wrong.'" Rosell v. ESCO, 549 So.2d 840, 844 (La.1989); Stobart v. State Through Dept. of Transp. and Development, 617 So.2d 880, 882 (La.1993). The appellate court must determine not whether the trier of fact was right or wrong, but whether the factfinder's conclusion was a reasonable one, after reviewing the record in its entirety. Mart v. Hill, 505 So.2d 1120,1127 (La.1987); Rosell, supra; Stobart, supra. Even though an appellate court may feel its own evaluations and inferences are more reasonable than the factfinder's, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review where conflict exists in the testimony. Rosell, supra; Arceneaux v. Domingue, 365 So.2d 1330, 1333 (La.1978); Stobart, supra.
PRESCRIPTION
The appellant assigns error to the trial court's failure to consider the mailing of his complaint to the PCF on September 19, 2007, and finding his claim was invalid and without effect due to his failure to submit the requisite filing fee.
In their exceptions of prescription, the appellees contended Mr. Berry's medical malpractice claims were prescribed as the last alleged act of malpractice occurred on an unspecified date in December 2005. They argue that the claims prescribed because Mr. Berry failed to file his PCF claim within one year of that date-by December 2006.
The appellant argues that the last date of malpractice was not December 2005; rather, "the date was extended much later due to the doctrines of contra non valentem and/or continuing tort." Mr. Berry attested that he did not discover the alleged malpractice until at least November 2006. Mr. Berry therefore argues that as his PCF claim was originally filed on September 19, 2007, it was timely filed within one year of his discovery of the alleged malpractice.
The appellees submit that even if plaintiff did not discover the alleged malpractice until November 2006, his January 14, 2008 PCF claim, filed after the PCF notified him that his original claim was invalid, is still untimely since it was not filed within one year of his discovery of the malpractice November 2007.
The trial court stated the following:
"Despite Plaintiff mailing his complaint to the PFC [sic] on September 19, 2007, his claim was rendered invalid and without effect based on his failure to submit the requisite filing fee. The Court finds that this fact, the failure to submit the requisite filing fee, is an undisputed fact.
The Court finds that the PFC [sic] complaint filed on January 14, 2008 is prescribed. Based on the Plaintiff's evidence, the latest date of the discovery of any alleged malpractice was in November 2006. As such, the PCF complaint should have been filed no later than November 30, 2007. The Medical Malpractice Act and Louisiana jurisprudence makes it clear that a PCF complaint *256 is not considered filed until the fee is paid. As such, the September 19, 2007 filing will not be considered for purposes of interrupting the prescriptive period. Therefore, the exception is granted."
The exception of prescription is a peremptory exception. La. C.C.P. art. 927. "[P]rescriptive statutes are strictly construed against prescription...." Carter v. Haygood, 04-0646, p. 10 (La.1/19/05), 892 So.2d 1261, 1268. If amendment of the petition can cure the basis for the peremptory exception, the trial court "shall order such amendment within the delay allowed by the court." La. C.C.P. art. 934. The exceptor bears the burden of proof at the trial of the peremptory exception. Spott v. Otis Elevator Co., 601 So.2d 1355, 1361 (La.1992). However, the burden shifts to the plaintiff if prescription is evident on the face of the pleadings. Williams v. Sewerage & Water Bd. of New Orleans, 611 So.2d 1383, 1386 (La.1993).
La. R.S. 9:5628 provides the prescriptive period for medical malpractice and reads, in pertinent part:
A. No action for damages for injury or death against any physician, chiropractor, nurse, licensed midwife practitioner, dentist, psychologist, optometrist, hospital or nursing home duly licensed under the laws of this state, or community blood center or tissue bank as defined in R.S. 40:1299.41(A), whether based upon tort, or breach of contract, or otherwise, arising out of patient care shall be brought unless filed within one year from the date of the alleged act, omission, or neglect, or within one year from the date of discovery of the alleged act, omission, or neglect; however, even as to claims filed within one year from the date of such discovery, in all events such claims shall be filed at the latest within a period of three years from the date of the alleged act, omission, or neglect. (Emphasis added)
La. R.S. 9:5628.
"Prescription commences when a plaintiff obtains actual or constructive knowledge of facts indicating to a reasonable person that he or she is the victim of a tort." Campo v. Correa, 01-2707, pp. 11-12 (La.6/21/02), 828 So.2d 502, 510. Even if a plaintiff does not have actual knowledge entitling him to bring a suit, constructive knowledge that excites attention and puts the "injured party on guard and call for inquiry" is sufficient. Id. at p. 12, 828 So.2d at 510-11. "Such information or knowledge as ought to reasonably put the alleged victim on inquiry is sufficient to start running of prescription." Id. at p. 12, 828 So.2d at 511.
Mere apprehension "that something is wrong is not sufficient to start prescription unless plaintiff knew or should have known by exercising reasonable diligence that his problem condition may have been caused by acts of malpractice." Gunter v. Plauche, 439 So.2d 437, 439 (La.1983). "[Prescription does not run as long as it was reasonable for the victim not to recognize that the condition may be related to the treatment." Griffin v. Kinberger, 507 So.2d 821, 823-24 (La.1987). However, "knowledge that an undesirable condition has developed ... after medical treatment does not equate to knowledge of everything to which inquiry might lead." Campo, 01-2707, p. 15, 828 So.2d at 512-13.
On September 19, 2007, Mr. Berry made a claim with the PCF for damages caused by medical malpractice; on this same date, Mr. Berry's counsel filed a request for leave to amend that claim. The original claim was against the following parties: Oschner Clinic Limited Liability at New Orleans, Infusion Partners-New *257 Orleans, Dr. James Butler, Dr. Sunii, Dr. Witzig, Dr. Laundry, and Dr. Garcia. Mr. Berry amended the claim of malpractice, listing Dr. Butler as a defendant and adding Tulane University Hospital and Clinic as a defendant.
On September, 28, 2007, the PCF sent a letter to Mr. Berry's attorney, advising that the request made on behalf of Mr. Berry for a medical review panel had been received, additional information needed to be provided, and a decision on which defendants were qualified "cannot be determined without this information." The letter also advised the attorney that, in accordance with Act No. 961 of the 2003 Regular Session, a filing fee of $100 "per named, qualified health care provider" must be remitted "within 45 days of the notice from this office that named providers are qualified."
At the hearing, the following exhibits were entered into evidence: the original claim of September 19, 2007; a letter of the same date requesting leave to amend the original claim; a letter of September 28, 2007, requesting additional information to determine qualification of healthcare providers, on which the filing fee assessment would be based; the amended claim of October 11, 2007; and the PCF's January 8, 2008 letter, notifying Mr. Berry's counsel that the claimant failed to remit the filing fee and therefore the claim was considered invalid and without effect as to Dr. Butler and Tulane University Hospital and Clinic.
The letter of January 8, 2008 referenced an October 22, 2007 advisement that the claimant had 45 days to remit filing fees in the amount of $200.00. The letter was addressed to Mr. Berry's counsel and states, "[o]n October 22, we advised you that ... you had 45 days to remit filing fees of $200.00, a physician's affidavit, or a forma pauperis ruling and that failure to comply with the provisions of the Act would render your request for review invalid and without effect as to Dr. James Butler and Tulane University Hospital and Clinic." The letter further states that "[w]e did not receive the filing fees, thus you have failed to comply within the time allowed; therefore the above-cited case is considered invalid and without effect as to Dr. James Butler and Tulane University Hospital and Clinic."
La. R.S. 40:1299.47(A)(1)(c), as amended by Act 961 of the 2003 Regular Session of the Louisiana Legislature, reads in relevant part as follows:
(c) A claimant shall have forty-five days from the mailing date of the confirmation of receipt of the request for review... to pay to the board [the oversight board of the Fund] a filing fee in the amount of one hundred dollars per named defendant qualified under this Part.
La. R.S. 40:1299.47(A)(1)(c).
The record before us does not contain the actual notice of which named providers were actually qualified and the amount of payment due within 45 days of the date of the notice. However, while the record does not contain the letter, counsel for the appellant concedes that he received such a letter.[2] Further, counsel maintains that the appellant failed to remit payment in the amount requested within 45 days of the date of the notice as requested in the letter.
This Court and others have recently reviewed a number of cases involving prescription based on a medical malpractice *258 claimant's failure to submit filing fees or evidence of waiver thereof within 45 days of the date such a notice. See, e.g., Golden v. Patient's Comp. Fund Oversight Bd., 40,801 (La.App. 2 Cir. 3/8/06), 924 So.2d 459, writ denied, 06-0837 (La.6/2/06), 929 So.2d 1261; In re Igwike, 06-0167 (La. App. 4 Cir. 5/23/07), 959 So.2d 562; Latiolais v. Jackson, 06-2403 (La.App. 1 Cir. 11/2/07), 979 So.2d 489; and Lane v. Patient's Comp. Fund Oversight Bd., 07-0150 (La.App. 1 Cir.2/27/08), 4 So.3d 802. The courts concluded that when a claimant does not remit payment or proof of waiver of filing fees within the 45-day time limit, that claimant's request for review of a medical malpractice claim is invalid and without effect.
The jurisprudence outlines the notification, qualification and payment remission process. In Igwike, the PCF sent a letter to Ms. Igwike's attorney in which the PCF advised the attorney that the request made on behalf of Ms. Igwike for a medical review panel had been received and that Memorial Medical Center and Dr. William F. Von Almen, II were both providers who were qualified under the Act. Igwike, 06-0167, p. 2, 959 So.2d at 563. The letter also advised the attorney that "[i]n accordance with Act No. 961 of the 2003 Regular Session, which amended La. R.S. 40:1299.47(A)(1)(c), effective August 15, 2003, a filing fee of $100 per qualified defendant is due within 45 days from the date of this notice." Id. A filing fee in the amount of $200.00 was requested, and the letter further stated that the filing fee could be waived only if certain documents were received by the Fund in lieu of the fee. Id. Specifically, Ms. Igwike was required to pay a filing fee, submit a physician's affidavit, or provide an in forma pauperis court ruling to the Fund within forty-five days of the mailing date of the notice. Id., p. 8, 959 So.2d at 566.
However, Ms. Igwike's in forma pauperis affidavit, which she sought to file in lieu of the required filing fee, was untimely received by the PCF. Id., pp. 8-9, 959 So.2d at 566. The court found that at earliest, Ms. Igwike sent the affidavit on the 45th day, such that it could not have been received within the applicable time period. Id. Therefore, the court determined that Ms. Igwike's request for a medical review panel was without effect. Id., p. 9, 959 So.2d at 566.
Like Igwike, the trial court found that Mr. Berry's request for a medical review panel was invalid and without effect. Mr. Berry attested that latest date of the discovery of any alleged malpractice was in November 2006. Given that, the PCF complaint was to be filed by November 30, 2007. Mr. Berry's subsequent January 14, 2008 complaint, filed after notification that his September 19, 2007 complaint was invalid, did not cure the prescription defect that arose by his failure to timely submit the filing fee as requested by the PCF. We therefore find no error in the trial court's finding that Mr. Berry's request for a medical review panel was invalid and without effect.
The appellant also asserts that his September 19, 2007 complaint was improperly declared invalid and without effect by PCF.
In Golden, the PCF board acknowledged Golden's request for the medical review panel and notified her counsel that Willis-Knighton Medical Center was a qualified health care provider under the Medical Malpractice Act. Golden, 40,801, p. 1, 924 So.2d at 460. In Golden, the plaintiff submitted the filing fee after the 45day time period expired. Id. After paying the filing fee, the plaintiff notified the PCF that the parties had selected an attorney-chairman of the Medical Review Panel and wished to have the board notify him of *259 their decision. Id., p. 2, 924 So.2d at 460-61. The PCF returned the untimely filing fee and refused to notify the attorney-chairman because it no longer considered the claim filed, due to the plaintiff's failure to pay the filing fee timely. Id., p. 3, 924 So.2d at 461. The court held that the PCF's duties under La. R.S. 40:1299.47(A)(3) are "mandatory duties of a clerical nature to facilitate the panel process," and the PCF had no authority to unilaterally stop the process as they did in this case. Id., p. 6, 924 So.2d at 463. The only thing the PCF is authorized to do when the required filing fee is not timely paid is to notify all the parties. Id.
In Latiolais, the court expounded on the court's holding in Golden. Latiolais, 06-2403, p. 6, 979 So.2d at 493. The PCF mailed a letter to Mr. Latiolais's attorney, acknowledging receipt of the request for a medical review panel and assigned a PCF number. Id., p. 2, 979 So.2d at 490. However, Mr. Latiolais claimed that he never received the letter from the PCF stating that a filing fee was due, and Mr. Latiolais refiled his claim thereafter along with a letter stating such. Id., p. 3, 979 So.2d at 491. The court stated that "[t]he defendants must assert prescription if that claim is viable, and the PCF must continue to perform its ministerial duties." Id., p. 6, 979 So.2d at 493.
In Lane, the court stated that "[t]he defendants must assert prescription if that claim is viable, and the PCF must continue to perform its ministerial duties." Lane, 07-0150, 4 So.3d at 803.
As the Golden court stated, "it is not the PCF Board's place to assert prescription and effectively dismiss plaintiffs claim with prejudice." Golden, 40,801, p. 8, 924 So.2d at 464. "The defendant alone may choose to assert prescription." Id. Therefore, the defendants rather than the PCF are the proper party to assert the invalidity of the previous PCF complaint as a basis to challenge a subsequently filed PCF complaint as prescribed.
In the matter before us, the defendants asserted prescription through filed exceptions. The PCF advised Mr. Berry's counsel that he had 45 days to submit the requisite filing fee or documents required under law in lieu of that submission. Therefore, Mr. Berry was required to pay a filing fee, submit a physician's affidavit, or provide an in forma pauperis affidavit to the PCF within forty-five days of the October 22, 2008 letter.
Mr. Berry's counsel concedes that Mr. Berry failed to meet this requirement. Thus, as the trial court stated, the fact that Mr. Berry failed to remit the requisite filing fee is undisputed. The PCF subsequently informed Mr. Berry's counsel of that failure. Therefore, the trial court granted defendants' exceptions of prescription, which rendered Mr. Berry's claim invalid and without effect.
We find sufficient support for and no error in the trial court's granting of the exceptions of prescription. We therefore affirm the trial court's judgment.
DECREE
The trial court's granting of the exceptions of prescription is affirmed.
AFFIRMED.
BONIN, J., concurs with reasons.
BONIN, J., concurring.
I respectfully concur.
In response to Mr. Berry's claim for medical malpractice review filed on January 14, 2008 with the PCF, the healthcare providers, Dr. Butler and Tulane University Hospital, filed the plea of liberative prescription of one year. La. R.S. 40:1299.47 B(2); La. C.C. art. 3447. Because *260 that written request alleged the date of the last act or omission as no later than December 31, 2005 and it did not allege a later "date of discovery of the alleged act, omission, or neglect," the action was prescribed on its face. See La. R.S. 9:5628 A. See also Campo v. Correa, 01-2707 (La.6/21/02), 828 So.2d 502. When an action is prescribed on its face, the patient bears the burden of showing that the action has not prescribed. See LeBreton v. Rabito, 97-2221, p. 6 (La.7/8/98), 714 So.2d 1226, 1228. Stated another way, the burden is upon the patient to prove that the filing was timely and that his action is not barred by his inaction for a period of more than one year. See Campo v. Correa, 01-2707, p. 9-10, 828 So.2d at 509.
Mr. Berry sought to establish the timeliness of his action by showing that he had filed an earlier claim with the PCF within one year of his discovery of the health care providers' malpractice. The trial court determined from the patient's evidence at the hearing that the latest date of discovery of any alleged malpractice was in November 2006. This finding is subject to manifest error review. See Marino v. Tenet Healthsystem Medical Center, 09-915 (La. App. 4 Cir. 11/24/09), 26 So.3d 297, 300. Mr. Berry's contention is that an earlier, identical written request for malpractice review, filed with the PCF on September 19, 2007 suspended the prescriptive period. See La. R.S. 40:1299.47 A(2)(a). But the healthcare providers respond that the September 19, 2007 claim filed with the PCF was not a valid request which suspended the time within which to bring a proper legal action because Mr. Berry never timely paid the filing fee of $200, which was undisputed.[1]See La. R.S. 40:1299.47 A(1)(c) through (e). The failure to timely pay the filing fees with the PCF "shall render the request for review of a malpractice claim invalid and without effect." La. R.S. 40:1299.47 A(1)(e); Bosarge v. Louisiana Patient's Compensation Fund, 08-1923 (La.App. 1 Cir. 5/8/09), 16 So.3d 10.[2] Without timely payment of the fees, the September 19, 2007 request, despite being filed within one year of the date of discovery of the malpractice, is "invalid and without effect" and is no avail to Mr. Berry in proving the timeliness of his January 14, 2008 request. See Smart v. West Jefferson Medical Center, 09-366, p. 3 (La. App. 5 Cir. 11/24/09), 28 So.3d 1119, 1123 ("As the filing fees required by statute were not timely paid for the original malpractice claim and request for medical review panel, the request for review of the malpractice claim is invalid and without effect. That is, it has no effect on the running of prescription of the claim.").
In view of the Louisiana Supreme Court's pronouncement on rehearing in Borel v. Young, 07-0419, p. 27 (La.7/1/08), 989 So.2d 42, 68 ("[T]he specific provisions of the Medical Malpractice Act regarding the suspension of prescription against joint tortfeasors apply to the exclusion of the general code article on interruption of prescription against joint tortfeasors, LSA-C.C. 2324(C)."), Mr. Berry suggests no other legal or factual grounds to prove that this request was otherwise timely. See also Richard v. Tenet Health Systems, *261 Inc., 03-1933, p. 3 n. 1 (La.App. 4 Cir. 4/14/04), 871 So.2d 671, 673 n. 1.
The patient, in the view of the trial court, did not carry his burden of proof. Mr. Berry's request for review of his malpractice claim against Dr. Butler and Tulane University Hospital is barred by his inaction for more than one year after the discovery of the malpractice. The plea of prescription filed by the healthcare providers was properly sustained by the district court and the claim dismissed with prejudice. La. C.C.P. arts. 927 A(1) and 934. I, therefore, concur.
NOTES
[1] The spelling of Dr. Laundry's name is used interchangeably as "Laundry" and "Landry" in the record.
[2] Counsel for the appellant states that he, in fact, received this notification as to which of the named healthcare providers were "qualified" under Act 961 and that the letter requested that a specific fee be remitted within 45 days of that notice.
[1] Counsel for Mr. Berry demonstrated commendable candor to the court about the circumstances of the non-payment.
[2] We recently denied supervisory relief from an interlocutory judgment denying an exception of prescription and upheld the trial court at this stage of the proceedings where it concluded on the facts that the matter was not prescribed despite the invalidity of the earlier PCF complaint due to non-payment of the filing fees. In re Medical Review Panel Proceedings For the Claim of Bosarge, 09-1345 (La.App. 4 Cir. 11/13/09) (unpub.). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858100/ | Karnes v. Karnes
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-93-149-CV
MARY ANN KARNES,
APPELLANT
vs.
WILLIAM DRAKE KARNES,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 299TH JUDICIAL DISTRICT
NO. 473,380, HONORABLE PETE LOWRY, JUDGE PRESIDING
Mary Ann Karnes appeals from three trial court orders issued in a suit affecting the
parent-child relationship. Tex. Fam. Code Ann. § 11.01(5) (West Supp. 1993) ("Family Code").
The first order decreases the child-support obligation of William Drake Karnes on his motion.
See Family Code § 14.08(c)(2). The second order denies appellant's motion to set aside the first
order and order a new trial. The third order denies appellant's motion for enforcement of the
original child-support order. We will reverse and remand for retrial consistent with this opinion.
BACKGROUND
Appellant and appellee were divorced in Sutton County on September 8, 1988.
Appellant received custody of their one child, and the court ordered appellee to pay $750 per
month in child support. In June 1989, appellee filed a motion to modify his child-support
obligation.
When appellant failed to appear at an August 5, 1991 hearing, the trial court heard
testimony and announced and rendered in open court a judgment in favor of appellee. (1) The
judgment called for a reduction of appellee's child-support obligation to $300 per month.
Appellant later moved for a new trial and to enforce the original child-support order. On
November 7, 1991, the trial court denied appellant's motion for new trial and signed an order
reducing appellee's child-support obligation to $300 per month. The trial court modified
appellee's child-support obligation based on a finding that there had been a material and
substantial change in the circumstances of the parties, namely, a significant reduction in appellee's
net annual income. Family Code § 14.08(c)(2). The trial court also denied appellant's motion
to enforce child support payments at the original $750 per month level until November 7, 1991.
Appellant had argued that the modification was not effective until the written order was signed.
On appeal, appellant contends the trial court erred in (1) finding that there was a
material and substantial change in appellee's circumstances that warranted modification of his
child-support obligation; (2) denying appellant's motion for enforcement of the prior order; and
(3) denying appellant's motion for a new trial.
DISCUSSION
A trial court's modification of a child-support order involves a two-step process.
First, the moving party must establish a material and substantial change in the circumstances of
the child, the obligor, or the obligee since issuance of the original order. Family Code
§ 14.08(c)(2). After determining that there are changed circumstances, the trial court must then
use the guidelines of Family Code section 14.056 (the "guidelines") to determine child-support
payments. Family Code § 14.052.
Even when the respondent fails to appear for the hearing, the movant must,
nevertheless, prove the elements required to obtain a modification. Considine v. Considine, 726
S.W.2d 253, 254 (Tex. App.--Austin 1987, no writ). In making the threshold determination of
whether there has been a material and substantial change in circumstances, the trial court may
consider the guidelines set forth in the Family Code. See Family Code § 14.056(a). The
guidelines suggest reviewing the needs of the child, the ability of the parents to contribute to the
support of the child, any financial resources available for the support of the child, and the amount
of possession of and access to the child. Family Code § 14.052(b). The court may also consider
other relevant factors in making its determination. Family Code § 14.056(b).
The court must consider the financial circumstances of the affected parties both at
the time the prior order was entered and at the time the modification is sought. Liveris v. Ross,
690 S.W.2d 60, 61 (Tex. App.--Houston [14th Dist.] 1985, no writ) (citing Stofer v. Linville, 662
S.W.2d 783 (Tex. App.--Houston [14th Dist.] 1983, no writ)). Evidence of financial setbacks will
not indicate changed circumstances unless the court is able to view those losses in the context of
a movant's complete financial situation. Liveris, 690 S.W.2d at 61.
The trial court is given broad discretion in determining when a person seeking
modification has met the burden of proving changed circumstances. Cannon v. Cannon, 646
S.W.2d 295, 297 (Tex. App.--Tyler 1983, no writ). A trial court's order will not be disturbed on
appeal unless the court has clearly abused its discretion. Id. (citing Williams v. Williams, 596
S.W.2d 245 (Tex. Civ. App.--Houston [14th Dist.] 1980, no writ)).
In her first three points of error, appellant complains there was no evidence to
support the trial court's finding that a reduction in appellee's income represented a material and
substantial change in his circumstances. In examining a no-evidence point of error, we must
consider only the evidence and inferences tending to support the finding and disregard all evidence
and inferences to the contrary. Alm v. Aluminum Co. of Am., 717 S.W.2d 588, 593 (Tex. 1986),
cert. denied, 498 U.S. 847 (1990); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965). See
generally William Powers, Jr. & Jack Ratliff, Another Look at "No Evidence" and "Insufficient
Evidence," 69 Tex. L. Rev. 515 (1991). Furthermore, we must assume the trial court found
every fact necessary to sustain the judgment, and we are bound by such implied findings if there
is evidence of probative value to support them. Cozby v. Cozby, 597 S.W.2d 808, 809 (Tex. Civ.
App.--Tyler 1980, no writ).
After reviewing the record we are unable to find any evidence supporting the trial
court's finding that there was a material change in appellee's circumstances because of appellee's
present financial setbacks. There is no evidence of appellee's income in 1988 other than his
conclusory testimony that he made more money then than he was making in 1991. Appellee's
bare assertion that he was making more money in 1988, without some testimony as to how much
he was making in 1988, is no more than a scintilla of evidence that his circumstances have
changed. Baker v. Baker, 719 S.W.2d 672, 676 (Tex. App.--Fort Worth 1986, no writ). The
record contains appellee's testimony of his 1990 gross and net income, but there is no evidence
establishing appellee's income in 1988 when the original order was entered. The record does
contain evidence of financial problems appellee suffered in the past several years. However, we
are unable to place these problems in a proper context without evidence of appellee's financial
standing at the time of the original order. Absent evidence allowing a comparison of appellee's
financial condition at the time of divorce with his present financial condition, we are unable to
uphold a finding of changed circumstances. See MacCallum v. MacCallum, 801 S.W.2d 579, 583
(Tex. App.--Corpus Christi 1990, writ denied) ("A showing of a material and substantial change
of circumstances is required in a motion to modify child support."). Because there was no
evidence to support a finding of changed circumstances, modification of appellee's child support
obligation was error. We therefore sustain appellant's first three points of error. In her
fourth point of error appellant complains of the trial court's failure to enforce child support at the
original level of $750 per month for the three month period between the court's oral
pronouncement and rendition of the child-support reduction on August 5th and the signing of the
written order on November 7th. Appellant argues that a written court order is necessary for a
child support order to be effective. The authority appellant cites does not support such a
proposition. Though an oral order rendered by the court may not be enforceable by contempt,
it can effectively modify child support as of a date certain. Both the statement of facts and the
order itself make it clear that it was the trial court's intention to reduce child support as of August
5, 1991, not on the later date when it signed the written modification order. We overrule the
fourth point of error.
In her fifth point of error appellant maintains that the trial court erred in denying
her motion for a new trial. Because sustaining appellant's first three points of error affords her
the relief she seeks, we do not address the fifth point of error.
In her prayer for relief, appellant also requests attorney's fees. The decision to
award attorney's fees rests within the sound discretion of the trial court. Laviage v. Laviage, 647
S.W.2d 758, 761 (Tex. App.--Tyler 1983, no writ) (citing Reyna v. Reyna, 584 S.W.2d 926 (Tex.
Civ. App.--Houston [14th Dist.] 1979, no writ)). We do not have jurisdiction to award such fees
and will only reverse a trial court's award if it represents an abuse of discretion. Accordingly,
we deny the request.
CONCLUSION
We sustain the three points of error complaining that there was no evidence to
support a finding of material and substantial change in the circumstances of appellee's income
between the date of divorce and the hearing on the motion to modify. We overrule or do not
address appellant's other complaints. Because it does not appear that the facts were fully
developed at the hearing below, in the interest of justice we remand the matter to the trial court
for retrial of the motion to modify. Butt v. Gonzalez, 646 S.W.2d 584 (Tex. App.--San Antonio
1983, no writ); Richard Orsinger, 6 Texas Civil Practice § 33:14, at 632 (1992 ed.). At that time,
if the evidence warrants a modification in support, the trial court may consider making any
reduction in support retroactive as permitted by the Family Code. Family Code § 14.08(c)(2)
(West Supp. 1993).
Bea Ann Smith, Justice
Before Chief Justice Carroll, Justices Aboussie and B. A. Smith
Reversed and Remanded in Part; Affirmed in Part
Filed: December 8, 1993
Do Not Publish
1. The trial court's order on the motion to modify recites that the cause was heard
on August 5, 1991. The same order later recites that it was judicially pronounced and
rendered on August 3, 1991, two days before the hearing. Our review of the record reveals
that the hearing was held on August 5, 1991, and that the trial court pronounced its
judgment on that date. | 01-03-2023 | 09-05-2015 |
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