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https://www.courtlistener.com/api/rest/v3/opinions/1557637/ | 22 So.3d 88 (2009)
ALADIN
v.
STATE.
No. 5D09-3186.
District Court of Appeal of Florida, Fifth District.
November 3, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453629/ | 250 P.3d 38 (2011)
241 Or. App. 351
STATE
v.
STANDRIDGE.
A141413
Court of Appeals of Oregon.
February 23, 2011.
Affirmed without opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/235618/ | 218 F.2d 790
William C. BOSTWICK, Appellant,v.UNITED STATES of America, Appellee.
No. 14934.
United States Court of Appeals Fifth Circuit.
January 20, 1955.
Aubrey M. Cates, Jr., Montgomery, Ala., John Huddleston of Cates & Huddleston, Montgomery, Ala., of counsel, for appellant.
Fred S. Weaver, Asst. U. S. Atty., Double Spring, M. L. Gwathmey, Asst. U. S. Atty., Frank M. Johnson, Jr., U. S. Atty., Birmingham, Ala., for appellee.
Before BORAH, RIVES and TUTTLE, Circuit Judges.
RIVES, Circuit Judge.
1
This is an income tax prosecution, in which the Government computed the defendant's net income on the basis of bank deposits and currency used in each taxable year, and attempted to corroborate that proof by the increase in net worth method. We have delayed decision of the appeal until we could have the benefit of the opinions of the Supreme Court in the four cases decided December 6, 1954. Holland v. United States, 75 S. Ct. 127; Friedberg v. United States, 75 S. Ct. 138; Smith v. United States, 75 S. Ct. 194; United States v. Calderon, 75 S. Ct. 186.
2
The appellant was convicted of having violated Section 145(b) Internal Revenue Code, 26 U.S.C.A. § 145(b), by willfully and knowingly attempting to defeat and evade income tax. The tax years involved were 1946, 1947 and 1948. The jury found the defendant guilty for the latter two years and the court sentenced him to 18 months imprisonment and $1,000.00 fine.
3
The first specification of error is that the court erred in failing to provide the defendant an opportunity to object to the charge of the court out of the hearing of the jury as required by Rule 30, Federal Rules of Criminal Procedure, 18 U.S.C.A. See also Rule 51, Federal Rules of Civil Procedure, 28 U.S.C.A. What occurred is set out in the footnote.1 Whether that amounted to a compliance with Rule 30 or not is probably immaterial because there seem to be no errors in the charge. The only errors suggested relate to two passages quoted in another footnote2, both of which are so obviously sound as not to merit discussion.
4
Specification 2 is that: "The District Court erred in requiring the sequestration of a certified public accountant proposed to be used by the defendant as an expert witness." "Where `the rule' is invoked as to witnesses, the mode and manner of its enforcement is confided largely to the discretion of the court, and the exercise of that discretion will not be disturbed except in clearest cases of abuse." 53 Am.Jur., Trial, Sec. 31, p. 47; cf. Jennings v. United States, 5 Cir., 73 F.2d 470, 471.
5
Specification 3 is that: "The Court was in plain error in refusing to permit the witness Griffin to testify as to his opinion of the adequacy of the records of the Turf Exchange." This specification is bottomed upon 26 U.S.C.A. § 413 which the Supreme Court in Holland v. United States, 75 S. Ct. 127, held not to be applicable to the net worth method. For the reasons stated in Dupree v. United States of America, 5 Cir., 218 F.2d 781, also decided today, we hold that that section does not apply to the bank deposits and current expenditures method of proof primarily employed in this case though supported by the increase in net worth method. If by any chance that holding should be mistaken, and if that section should apply to a case like the one before us, we, nevertheless, find that the record does not support appellant's contention that the court erred in rejecting the testimony.
6
The revenue agent had testified for the Government that the records of the Turf Exchange did not adequately reflect the income of the defendant and his partners. The accountant testifying for the defendant was asked the following question, to which the Government's objection was sustained: "I will ask you if in your opinion the win and lost sheets that you have just shown constitute an adequate set of records?" The defendant's counsel did not pursue the subject, re-phrase the question, nor make it any more definite that the inquiry was directed to whether the records clearly and truly reflected the defendant's income from the Turf Exchange. The form of the question was certainly objectionable.
7
Moreover, it was self-evident that unless gains and losses from gambling were truthfully and accurately entered in the "Win" and "Lost" columns of the accounting sheets, they did not truly reflect the income of the defendant and his partners in that enterprise. The most adequate method of accounting will not clearly or truly reflect income unless the items of receipt and expenditure are truthfully entered. The adequacy of a set of records, the backbone of which consists of entries in the columns "Win", "Lost" is within the comprehension of the ordinary juror and hardly requires the opinion of an expert witness. The jury were really concerned not with a set of bookkeeping entries, but with the facts concerning the defendant's income. This specification of error is without merit.
8
The remaining specifications of error relate to the sufficiency of the evidence to sustain the conviction, as presented by the motion for judgment of acquittal at the close of the Government's case and at the close of all of the evidence and renewed after verdict and judgment along with an alternative motion for new trial. We review the case "bearing constantly in mind the difficulties that arise when circumstantial evidence as to guilt is the chief weapon of a method that is itself only an approximation." Holland v. United States, supra, 75 S.Ct. at page 132.
9
The taxpayer defendant had given to the special agent of the Internal Revenue Department a sworn statement dated March 8, 1951, which was introduced in evidence without objection and in which, among other things, the defendant said:
10
"No, I haven't filed any income tax except the first one when they checked Conners and Jones about 1933 or 1934, and since then. When they told me and Gene about the government checking them, they told us to start making income tax returns, which I did — the first one I ever made. I had never heard of gamblers paying income tax; I didn't think we were supposed to. Johnny came out of the war, I think, with a lot of money.
11
* * * * * *
12
"Q. Mr. Bostwick, on December 31, 1941, could you tell me how much cash you had invested in the Turf Exchange? A. I couldn't hardly tell you. I imagine we could have had $10,000.00 or $20,000.00. We had a bank roll of $10,000.00 especially to pay off horses. Then the bank roll of the Turf Exchange never run more than $5,000.00 or $6,000.00, but if it did, it would be cut down. I imagine the total bank roll would run around $15,000.00 all told.
13
"Q. And one-fourth of that would be yours? A. That is right. When I drew out down there, I drew $5,000.00.
14
"Q. Did you have any other cash on hand December 31, 1941? A. Yes, sure I had money.
15
"Q. Could you tell us how much you had on hand at that time? A. No, I can't tell you about 1941, but I know what I had in 1939 — that is when I got married. I told my wife what I had. I had around $50,000.00. I had that in cash money. When I got married, I had an apartment house and one other house, an automobile, and some diamonds, and stock. This is besides my $50,000.00 in cash. I probably had some mortgages because I had some money loaned out. I didn't really put my money to working until I adopted this child about 1944 or 1946. When I got married, I started saving my money; I quit throwing it away."
16
During the course of this investigation, the agent examined the bank records pertaining to the various accounts of the defendant, his wife, and small adopted daughter, the defendant's stock account with Merrill, Lynch, Fenner & Beane, brokers, the defendant's local tax assessments, all of the Probate Court records in Montgomery and adjoining counties, and formally interviewed and took sworn statements from the defendant, his wife, his partners and other persons associated with him in the Turf Exchange, and also interviewed the persons to whom, according either to the mortgage records or to defendant's statement, he had made loans.
17
Starting then with cash on hand December 31, 1939, $50,000.00, the agent made detailed calculations for each year thereafter, adding the income as reported in defendant's return, any loans repaid, proceeds from sale of stock, etc., subtracting estimated cash living expenses and amounts traced to defendant's investments for the year and any other expenditures, and arrived at an amount of cash remaining on hand on December 31, 1945 as $26,920.47.
18
The agent then computed the defendant's net income for each of the years 1946, 1947, and 1948 on the basis of the bank deposits and currency used for such year. He added the total deposits to all bank accounts and the currency shown to be used, eliminated loans repaid, proceeds from sale of stock and any depletion of currency on hand as of the end of the previous year, subtracted allowable expenditures and non taxable income and calculated the defendant's net taxable income for the year 1946 as $33,963.16 instead of $12,714.08 as reported; for 1947, $51,547.77 instead of $9,876.16 as reported; and for 1948 as $34,031.65 instead of $11,891.52 as reported.
19
The agent then made a computation of net worth of the defendant and his wife as of December 31, 1945, 1946, 1947 and 1948, and arrived at practically the same amounts that he had reached on the basis of bank deposits and currency used during those years.
20
The defendant on his part showed some matters not considered by the revenue agent, for example that he had purchased 30 shares of Alabama Power Company preferred stock in 1937 and 1938 and sold them in 1940; that he had sold a diamond to Sol Monsky for $2,400.00 on May 23, 1946; that he had made a loan to Edward F. Taylor of $5,000.00 in June, 1939, which was repaid in the amount of $2,000.00 in 1941, and $3,000.00 in 1942. The defendant also introduced a statement purporting to show his net worth as of December 31, 1939 as $96,974.00, but upon analysis it was found to contain only the following items, which had not been taken into consideration by the revenue agent:
21
1. Reynolds Loan ___________ $ 5,000.00
2. Diamonds ________________ 3,000.00
3. Taylor Loan _____________ 5,000.00
4. Golden Loan _____________ 5,000.00
5. Socony Stock ____________ 1,600.00
6. Alabama Power Stock _____ 3,300.00
__________
Totaling ________________ $22,900.00
22
The revenue agent testified in rebuttal that assuming that the defendant's net worth statement as of December 31, 1939 is correct in every detail, it would reduce the total of defendant's net income for 1946, but would have no effect on the 1947 and 1948 results. The jury found the defendant guilty only under Counts 2 and 3 of the indictment covering 1947 and 1948. We think that the evidence was clearly sufficient for the jury's consideration on the question of the amount of the defendant's net taxable income for each of the years in question.
23
The question remains as to whether the jury could reasonably find that the defendant "did wilfully and knowingly attempt to defeat and evade a large part of the income tax due and owing by him to the United States of America for the calendar year 1947" and for the year 1948, as charged in the indictment. From the manner in which the records were kept, the deposit of money in the name of M. W. Bostwick instead of William C. Bostwick, the keeping of a safe deposit box in the name of Frank B. Cyphers, the failure to keep records of the gambling which the defendant admitted outside the Turf Club, the large amounts of understatement of net income for each of said years, and all of the other circumstances of the case, we conclude that the question of defendant's intent also was for the jury. Spies v. United States, 317 U.S. 492, 499, 63 S. Ct. 364, 87 L. Ed. 418; Holland v. United States, supra, 75 S.Ct. at page 137.
24
Finding no reversible error in the record, the judgment is
25
Affirmed.
Notes:
1
"The Court: Now, Mr. Cates has called my attention to the fact that the testimony which he expects to offer with reference to the silence of the record as to any objection to the Court's oral instructions, and to the fact that no opportunity was given to the Defendant to make objection to the Court's charge or omission to charge out of the presence of the jury
"Now, with respect to that, insofar as my own recollection is concerned, I will state for the record that there was no request made of me at the conclusion of my charge to register an objection to the charge, or the failure to charge; nor was there any request made that an opportunity be afforded the Defendant to make such an objection out of the presence of the jury.
"My further recollection is that I paused for some thirty seconds or more after I concluded my charge before I told the jury to retire and consider their verdict, since no objection was then made, nor was there any evidence that an objection would be made. Certainly no request for objection was made at that point.
"My further recollection is that I concluded by charge to the jury and directed them to retire and consider their verdict at 10 minutes before 10:00 in the morning. That time of course is approximate; that at about 11:30 or 25 minutes until 12, Mr. John Huddleston, Mr. George Huddleston and Mr. Cates came into my chambers, after the jury had been deliberating since about 10 minutes to 10:00 o'clock, and asked if then they might register an objection to the charge which I had given the jury.
"I told them that they certainly might do it, but that I would let the record speak the truth with respect to that, which would have shown that the jury had been then deliberating approximately an hour and a half. Then somewhat facetiously it was remarked that if the record showed that there would be no use to make an objection. And I agreed that that was probably true.
"That is my entire recollection of the whole point.
"Mr. Fulford: The Government is willing to stand on that recollection. Your Honor.
"The Court: I would not deprive the attorney for the Defendant the right of disagreeing with that recollection, or putting forward anything else that they might have. I think they should make the record complete.
"Mr. Cates: Can we pause just a minute and be off the record?
"The Court: Oh, yes.
"(Discussion was had off the record.)
"Mr. Cates: I will ask Your Honor one further question.
"The Court: You may make any statement, I don't want you cut off. You make any statement for the record you want to.
"Mr. Cates: I will just make this statement. And correct me if I'm wrong —
"The Court: Sure.
"Mr. Cates: My recollection — and I would so testify — is that the Court did not by any words ask if the defense was satisfied with the charge, or the omissions therefrom.
"The Court: That is correct.
"Mr. Cates: That's for that part.
"The Court: That's correct.
"Mr. Cates: As to whether or not the Court made any signs such as nodding and glancing, I wouldn't make any positive statement. The only thing I could say was that the Court was facing the jury throughout the whole procedure, or virtually all of it.
"The Court: That's true. When I delivered my instructions I did face the jury. And, my recollection may be imperfect, but I will say this for the record, that it is my practice not to call the jury's attention to any exceptions or objections that the attorneys either in civil or criminal cases want to take to my charge; but rather to put the onus on the attorneys to approach the bench; and I feel sure that I looked to determine, and paused to determine whether the counsel for the Defendant had any objections or exceptions.
"Mr. Cates: I think that's enough of a showing for the record. With that in view we feel that the Court as the governor of the trial is the one who should create the opportunity called for under the rule."
2
"You have a right to consider the evidence in the case, if you find it to be a fact, that this Defendant was a gambler, that he had no other business except that of gambling. You have a right to consider that in determining whether you will believe the testimony of witnesses that the Defendant had a good character during the years concerned."
"The presumption of innocence attends him at every stage of the proceedings against him. It is a palpable, tangible element of the case and continues to protect him until such a time as that the jurors in their deliberations are convinced of guilt beyond a reasonable doubt. If that time does come in your deliberations, when your minds are convinced of guilt beyond a reasonable doubt, the presumption of innocence has served its purpose. It disappears from the case and is no longer a part of the case for consideration by the jury."
3
"§ 41General rule
"The net income shall be computed upon the basis of the taxpayer's annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Commissioner does clearly reflect the income. If the taxpayer's annual accounting period is other than a fiscal year as defined in section 48 or if the taxpayer has no annual accounting period or does not keep books, the net income shall be computed on the basis of the calendar year." | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/2858012/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-92-009-CV
AMERICAN TRANSIT CORPORATION,
APPELLANT
vs.
KIMBERLIE HARRIS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
NO. 482,339-A, HONORABLE F. SCOTT MCCOWN, JUDGE
PER CURIAM
Appellant American Transit Corporation seeks review by petition for writ of error
from a judgment of the district court of Travis County in favor of appellee Kimberlie Harris.
Harris has filed a motion to affirm district court judgment and for judgment on cost and
supersedeas bond. We will overrule the motion and dismiss the appeal for want of prosecution.
Harris filed suit against American Transit and Capital Metropolitan Transit
Authority ("Capital Metro"). On June 7, 1990, the district court rendered a default judgment
against both defendants and in favor of Harris. Capital Metro filed a motion for new trial, which
the trial court granted in July 1990. On December 11, 1990, the trial court issued its order
severing Harris's claim against American Transit from that against Capital Metro. On June 26,
1991, the trial court issued a final judgment against American Transit in the severed cause. (1)
American Transit timely filed its petition for writ of error and supersedeas and cost
bond with the district clerk of Travis County on October 4, 1991. See Tex. R. App. P. Ann. 45
(Pamph. 1991). In response to Harris's motion to affirm the judgment, American Transit
contends that the record shows "fundamental error." See generally DSC Finance Corp. v. Moffitt,
815 S.W.2d 551 (Tex. 1991). Because we do not address any question of error, we decline to
affirm the judgment of the trial court and overrule Harris's motion.
This Court may, however, dismiss an appeal for failure to file the record within
the designated time. Tex. R. App. P. Ann. 54(a) (Pamph. 1991). The record was due to be filed
in this cause on December 3, 1991. Rule 54(a). A motion for extension of time was due fifteen
days later, that is, on or before December 18, 1991. Tex. R. App. P. Ann. 54(c) (Pamph. 1991);
see Chojnacki v. Court of Appeals, 699 S.W.2d 193 (Tex. 1985); B.D. Click Co. v. Safari
Drilling Corp., 638 S.W.2d 860 (Tex. 1982). In its response, American Transit states that, at
the time it filed its petition for writ of error, it requested "a transcript of the proceedings." See
generally Tex. R. App. P. Ann. 51(b), 53(a) (Pamph. 1991).
American Transit, however, has filed neither a transcript or statement of facts nor
a motion requesting an extension of time within which to file the record. Because the time within
which to file a motion for extension of time has passed, we dismiss the appeal for want of
prosecution.
[Before Chief Justice Carroll, Justices Aboussie and B. A. Smith]
Dismissed for Want of Prosecution
Filed: February 12, 1992
[Do Not Publish]
1.
1 There was a question whether the default judgment rendered June 7, 1990, was final as to
American Transit because only Capital Metro filed a motion for new trial. The trial court severed
the claims after the court granted the motion for new trial. See Amcole Energy Corp. v.
Chapman, Inc., 666 S.W.2d 540 (Tex. App. 1984, no writ). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2858046/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-166-CR
NO. 3-91-167-CR
AND
NO. 3-91-168-CR
DAVID KEITH ALEXANDER,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF BELL COUNTY, 264TH JUDICIAL DISTRICT
NOS. 39,470, 39,471, & 39,472, HONORABLE JACK W. PRESCOTT, JUDGE
PER CURIAM
By three indictments in three separate causes, appellant was charged with theft.
Tex. Penal Code Ann. § 31.03(a) (1989). Appellant pleaded not guilty in each cause. The cases
were tried together to the court, which found appellant guilty in each cause. The trial court fixed
appellant's punishment at thirty-five years' imprisonment in cause no. 39,470; twenty years'
imprisonment in cause no. 39,471; and twenty years' imprisonment in cause no. 39,472. (1) We will
affirm the convictions.
I. CAUSE NO. 3-91-166-CR
Appellant raises a single point of error in cause number 3-91-166-CR, in which he
asserts the evidence is insufficient to establish that the property taken was of a value greater than
$750.00 and less than $20,000.00 because the items of property alleged to have been taken were
taken in separate and distinct incidents and neither was of a value in excess of $750.00. (2)
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). (3) 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).
The indictment alleged, in pertinent part, that appellant unlawfully acquired and
exercised control over "one saddle and one trailer of the value of more than seven hundred and
fifty dollars and less than twenty thousand dollars from Charles E. Ritz. . . ." Appellant argues
that the State failed to prove that both items were stolen in a single act of theft. Appellant asserts
the proof establishes that the saddle and trailer were taken on different occasions and that neither
item exceeds $750.00 in value. Therefore, appellant argues, the maximum punishment he should
have received was a term of confinement of ten years. (4)
Charles Ritz testified that in July 1990 appellant accompanied him to his property
south of Killeen in Bell County. While there, appellant expressed an interest in using Ritz's flat
bed trailer and also "noticed" Ritz's saddle hanging in the barn. Ritz later determined that the
saddle and trailer were missing. Remembering appellant's interest in these items, Ritz called
appellant expressly to inquire what he had done with them. Ritz testified that appellant admitted
taking the saddle and trailer, but told Ritz that he was having the saddle cleaned and the trailer
repaired. In fact, appellant had pawned the saddle and sold the trailer.
On the stand, appellant admitted he took the saddle and trailer, but disputed that:
(1) he took them at the same time; and (2) the items individually, or collectively, exceed $750.00
in value. Ritz testified that both items "disappeared right about the same time." He further
testified, "I can't say for sure if he took them on the same day but I do know they were--they both
disappeared the same time frame." Ritz valued his saddle at $300 to $350.00 and his trailer at
$700.00. Mr. Johnny Fisher, an experienced auctioneer, estimated the value of the trailer, which
had new tires, to be "at least $750.00." Mr. Langford, who owned the pawnshop where
apppellant had pawned Ritz's saddle, valued the saddle at $200.00 to $250.00.
The trial judge, in a trial before the court, is the sole judge of the credibility of
the witnesses and may accept or reject any part or all of the testimony given by the State or
defensive witnesses. Minx v. State, 615 S.W.2d 748, 749 (Tex. Crim. App. 1981). The trial
court was free to disbelieve appellant's testimony and conclude from Ritz's testimony that
appellant took the saddle and trailer on the same occasion. Furthermore, the trial testimony
showing that appellant disposed of the stolen items on different dates is not evidence tending to
establish that he took the items on different dates. (5) Finally, Fisher's testimony, that the trailer
with new tires was worth at least $750.00 in July of 1990, is sufficient to support a finding that
the value of the trailer alone exceeded $750.00. Viewing the evidence in the light most favorable
to the prosecution, we conclude that a rational trier of fact could have found the essential elements
of the crime beyond a reasonable doubt.
Additionally, despite appellant's testimony that he took the items on separate
occasions, we conclude that when the evidence is viewed in the light most favorable to the verdict,
it excludes every reasonable hypothesis but guilt. Appellant admitted that: (1) he did not own
the saddle or trailer; (2) he took both items; (3) he pawned the saddle; (4) he sold the trailer; and
(5) Ritz did not give him permission to sell the trailer or saddle. Ritz denied giving appellant
permission to take, pawn, or sell the saddle or trailer. The evidence is sufficient to support the
conviction. Appellant's point of error is overruled.
II. CAUSE NOS. 3-91-167-CR & 3-91-168-CR
In a single point of error, appellant asserts the trial court erred in assessing
punishment at twenty years' imprisonment in each of these two causes. Specifically appellant
contends that the punishment was unlawfully enhanced pursuant to Tex. Penal Code Ann.
§ 12.42(a) (1974).
The first paragraph of the indictment in each cause charged appellant with theft of
property of the value of more than two hundred dollars and less than seven hundred and fifty
dollars. The second and third paragraphs of each indictment then alleged that, before the date of
the alleged offense, appellant had been twice convicted of felony theft in Travis County. The
fourth paragraph of each indictment alleged that appellant had been previously convicted in
Williamson County of the felony offense of unauthorized use of a vehicle. (6) The trial court found
appellant guilty in each cause and found the three allegations of previous felony convictions true.
Article 31.03(e)(4)(E) provides that a theft shall be a third degree felony if the
value of the property stolen is less than $750 and the defendant has been previously convicted two
or more times of any grade of theft. Tex. Penal Code Ann. § 31.03(e)(4)(E) (Supp. 1992). (7) The
two previous theft convictions thus made these offenses third degree felonies. The court then
relied on the previous conviction for unauthorized use of a vehicle to enhance the charged offenses
pursuant to § 12.42(a) to second degree felonies. (8)
Upon a conviction under § 31.03(e)(4)(E), the defendant's punishment may be
enhanced pursuant to § 12.42(a) provided the previous conviction used to enhance is for an
offense other than theft. Rawlings v. State, 602 S.W.2d 268 (Tex. Crim. App. 1980). Appellant
argues that unauthorized use of a vehicle is a theft offense and, therefore, his previous conviction
for this offense was improperly used for enhancement in these causes.
Appellant first points out that § 31.07 is found in chapter 31 of the Penal Code.
Chapter 31 is part of title 7, which is denominated "Offenses Against Property." Chapter 31 is
entitled "Theft." Each section in chapter 31 bears the specific subtitles of the offenses contained
in the theft chapter. Section 31.03 is subtitled "Theft." From this scheme we may surmise that
the offenses grouped under title 7 all relate to offenses against property; that those contained in
chapter 31 pertain to theft-type offenses; and that § 31.03 specifically defines what constitutes the
offense of theft.
Section 31.02 recites that § 31.03 consolidates a number of former theft offenses. (9)
Unauthorized use of a vehicle is not one of the former theft offenses enumerated in § 31.02. The
practice commentary to § 31.02 specifically recites that driving a motor vehicle without the
owner's consent is treated separately because it covers conduct that does not constitute theft. Seth
S. Searcy III & James R. Patterson, Practice Commentary, Tex. Penal Code Ann. § 31.02 (1989).
A comparison of the theft and unauthorized-use sections of the code illustrates that
the mens rea element in § 31.03 is not an element of § 31.07. Section 31.03 provides: "A person
commits an offense if he unlawfully appropriates property with intent to deprive the owner of
property." Tex. Penal Code Ann. § 31.03(a) (1989) (emphasis added). "Deprive" is defined in
§ 31.01(3)(A) as "to withhold property from the owner permanently or for so extended a period
of time that a major portion of the value or enjoyment of the property is lost to the owner." Tex.
Penal Code Ann. § 31.01(3)(A) (1989). To constitute theft, the actor, at the time he acquires the
property, must intend to deprive the owner of the property. Seth S. Searcy III & James R.
Patterson, Practice Commentary, Tex. Penal Code Ann. § 31.03 (1989). Section 31.07
provides: "A person commits an offense if he intentionally or knowingly operates another's boat,
airplane, or motor-propelled vehicle without the effective consent of the owner." Tex. Penal Code
Ann. § 31.07 (1989). Section 31.07 proscribes the use of property without the owner's consent
even if the actor has no intent to deprive the owner of the property. Seth S. Searcy III & James
R. Patterson, Practice Commentary, Tex. Penal Code Ann. § 31.07 (1989).
Appellant next argues that because the court of criminal appeals has held that
unauthorized use of a vehicle is a lesser included offense of theft, Neely v. State, 571 S.W.2d 926,
928 (Tex. Cr. App. 1978), it should be treated as a theft offense. Appellant cites a double
jeopardy case, Ex parte Jefferson, 681 S.W.2d 33, 34 (Tex. Cr. App. 1984), to support his
argument. In Ex parte Jefferson, the court of criminal appeals held that a defendant could not be
convicted for both the theft and the unauthorized use of the same pickup truck. Ex parte
Jefferson, 681 S.W.2d at 34. The court relied on the reasoning in Brown v. Ohio, 432 U.S. 161
(1977), that the greater offense of auto theft was the same, for purposes of double jeopardy, as
the lesser included offense of joyriding.
In the two causes before us, appellant was convicted of a violation of: (1) theft of
cattle panels from Johnny Cloud on July 15, 1990; and (2) theft of U.S. currency from James
Tomme on July 23, 1990. The previous conviction for unauthorized use of a vehicle used to
enhance was not a lesser-included offense of either charged offense. Rather, the previous
conviction was based on a wholly unrelated criminal episode for which appellant was convicted
in 1989. Therefore, the reasoning of Brown and Jefferson does not apply here.
We hold that the § 31.07 conviction may be used to enhance punishment, pursuant
to § 12.42(a) following a conviction under § 31.03(e)(4)(E). Appellant's point of error is
overruled.
III. CONCLUSION
The judgments of conviction are affirmed.
[Before Chief Justice Carroll, Justices Aboussie and Kidd]
Affirmed
Filed: January 22, 1992
[Publish]
1. The district court cause nos. 39,470, 39,471 and 39,472 are docketed on appeal as
3-91-166-CR, 3-91-167-CR and 3-91-168-CR, respectively.
2. The indictment alleged third degree felony theft. Tex. Penal Code Ann. § 31.03(e)(4)(A)
(Supp. 1992). After enchancement appellant was punished as an habitual offender. Tex. Penal
Code Ann. § 12.42(d) (Supp. 1992).
3. 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.
4. See Tex. Penal Code Ann. §§ 31.03(e)(4)(E) & 12.34(a)(1) (Supp. 1992).
5. Consequently, Tex. Penal Code Ann.§ 31.09 (1989) does not apply in this cause. Article
31.09 provides:
When amounts are obtained in violation of this chapter pursuant to one scheme or
continuing course of conduct, whether from the same or several sources, the
conduct may be considered as one offense and the amounts aggregated in
determining the grade of the offense.
Tex. Penal Code Ann. § 31.09 (1989). Article 31.09 applies only to cases where multiple thefts
are committed and the values of the property are aggregated to determine the grade of the offense.
It does not apply where, as here, the indictment alleges one act of theft where two items are taken
and the total value of these items is alleged. Coleman v. State, 777 S.W.2d 738 (Tex. App. 1989,
no pet.)
6. Tex. Penal Code Ann. § 31.07 (1989).
7. The maximum punishment for a third degree felony is ten years imprisonment and a $10,000
fine. Tex. Penal Code Ann. § 12.34(a)(1) (Supp. 1992).
8. Tex. Penal Code Ann. § 12.42(a) (1974).
9. Section 31.02 provides:
Theft as defined in Section 31.03 of this code constitutes a single
offense superseding the separate offenses previously known as theft,
theft by false pretext, conversion by a bailee, theft from the person,
shoplifting, acquisition of property by threat, swindling, swindling
by worthless check, embezzlement, extortion, receiving or
concealing embezzled property, and receiving or concealing stolen
property.
Tex. Penal Code Ann. § 31.02 (1989). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2858052/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-187-CR
LESTER RAY SMITH,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 147TH JUDICIAL DISTRICT
NO. 0910466, HONORABLE WILFORD FLOWERS, JUDGE
PER CURIAM
The trial court found appellant guilty of aggravated robbery. Tex. Penal Code
Ann. § 29.03 (Supp. 1992). After finding that appellant had been previously convicted of two
felony offenses, the trial court assessed punishment at imprisonment for 30 years. We will affirm
the conviction.
In his first point of error, appellant contests the sufficiency of the evidence to prove
that he caused "bodily injury" to the complainant. A person commits robbery if "in the course
of committing theft . . . and with intent to obtain or maintain control of the property, he: (1)
intentionally, knowingly, or recklessly causes bodily injury to another." Tex. Penal Code Ann.
§ 29.02 (1989). Robbery becomes aggravated when the person causes bodily injury to someone
65 years of age or over. § 29.03 (Supp. 1992).
The complaining witness was Sue McElroy, a 76-year-old woman. McElroy
testified that she was preparing to take a bus home after shopping for groceries when the offense
occurred. McElroy was carrying a sack of groceries in her left arm and a purse with shoulder
straps over her right shoulder. Appellant approached from McElroy's left side and, while he
asked if he could help her, reached behind her back and pulled on the purse. McElroy dropped
the groceries in order to hold onto her purse. She testified that as they were struggling appellant
pulled her off the curb, where there was grass, onto the pavement. This caused McElroy to hurt
her foot. When a man came forward to help her, appellant ran away and was shortly after
arrested.
McElroy also testified that two weeks before the offense she had had surgery on
her feet and that two four-inch pins had been left in each foot. She was wearing orthopedic shoes,
but took no medication because as long as nothing injured her feet, they did not hurt. McElroy
stated that after the scuffle with appellant, her foot was in pain. Police Officer Frisinger, who
was called to the robbery scene, testified that McElroy told him that her toes hurt.
"Bodily injury" means "physical pain." Tex. Penal Code Ann. § 1.07(7) (1974).
Physical pain, being a term of common usage, is construed according to its fair import. Lewis
v. State, 530 S.W.2d 117 (Tex. Crim. App. 1975); Tex. Penal Code Ann. § 1.05(a) (1974). The
degree of injury sustained by a robbery victim and the type of violence used by an accused are of
no moment in assessing the occurrence of physical pain. Lane v. State, 763 S.W.2d 785 (Tex.
Crim. App. 1989). As long as the violence is clearly perpetrated against another to prevent or
overcome resistance to theft, fine distinctions as to the degree or character of physical force do
not serve the purpose of the statute. Id. Here, McElroy testified that appellant's pushing her off
the curb caused pain to her foot. The trial court could find that appellant violently tugged at
McElroy's purse to overcome her resistance and, in so doing, caused McElroy pain. We overrule
point one.
In his second point of error, appellant argues that the State failed to prove its
allegation that he knowingly and intentionally caused bodily injury to McElroy. While the State
alleged the culpable mental states of intent and knowledge, proof of either mental state was
sufficient. Ely v. State, 582 S.W.2d 416 (Tex. Crim. App. 1979). A person acts knowingly with
respect to a result of his conduct when he is aware that his conduct is reasonably certain to cause
the result. Tex. Penal Code Ann. § 6.03(b) (1974). Just as proof of bodily injury does not
depend on the severity of the violence used, the threshold of proof required to support a finding
of awareness that bodily injury is reasonably certain to occur is low. Lane, 763 S.W.2d at 787-88.
The evidence showed that McElroy was an elderly woman who, because of recent
surgery, was wearing orthopedic shoes which resembled a cast. Her toes, left uncovered by the
shoes, were wrapped and looked swollen. McElroy testified that she could not walk very well,
but was "scooting along." She also stated that appellant pulled her purse hard, that he kept
hanging on with a "bull-dog grip," and that she really fought for her purse. The trial court could
infer from the force appellant used in pulling on McElroy's purse that he was aware that his
conduct was reasonably certain to cause her bodily injury. We overrule point two.
The judgment of conviction is affirmed.
[Before Justices Powers, Jones and B. A. Smith]
Affirmed
Filed: January 15, 1992
[Do Not Publish] | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2858074/ | 626jv
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-92-638-CV
626 JOINT VENTURE d/b/a CEDAR CANYON RANCH,
CHARLES STEGER, JOHN GANTT, AND JIM CASKEY,
APPELLANTS
vs.
JAMES H. SPINKS AND CLAUDETTE L. SPINKS,
APPELLEES
FROM THE DISTRICT COURT OF WILLIAMSON COUNTY, 368TH JUDICIAL DISTRICT
NO. 90-285-C368, HONORABLE BURT CARNES, JUDGE PRESIDING
James H. Spinks and Claudette L. Spinks, appellees, brought suit against 626 Joint
Venture d/b/a Cedar Canyon Ranch, Charles Steger, John Gantt, and Jim Caskey (collectively,
"defendants"), appellants, for a debt allegedly owed to the Spinkses. Trial was to a jury, which
found that (1) Steger, Gantt, Caskey, and Don Bizzell were partners; (1) (2) the partnership's agent,
Bizzell, signed a note and deed of trust on behalf of the partnership; and (3) the partnership
agreed, through its agent, to pay the indebtedness to the Spinkses. Based on these findings, the
trial court rendered judgment for the Spinkses.
Defendants bring four points of error. They assert that (1) as a matter of law,
defendants are not liable for the indebtedness evidenced by the note because the note does not bear
any of their names; (2) there is no evidence, or alternatively insufficient evidence, to sustain the
jury's finding that the agent signed the note and deed of trust on behalf of the partnership; (3)
there is no evidence, or alternatively insufficient evidence, to sustain the jury's finding that the
partnership agreed, through its agent, to pay the indebtedness evidenced by the note; and (4) there
was no evidence to support the jury instruction on ratification. We will affirm the trial court's
judgment.
FACTUAL AND PROCEDURAL BACKGROUND
The Spinkses owned 626 acres of land in Lampasas County known as Cedar
Canyon Ranch. In 1985 they listed the land for sale with a real estate agent. The realtor told
them a group of businessmen were interested in purchasing the property. In touring the property,
Gantt and Caskey introduced themselves to the Spinkses as two of the people who were going to
buy the land. A short time later, the Spinkses entered into a contract for the sale of the land with
"Don Bizzell, Trustee." The Spinkses believed Bizzell signed the contract on behalf of the group,
and was not signing the contract as an individual. Bizzell testified that he entered into the contract
for the group.
On the date of closing, the group had not yet executed any formal written joint
venture agreement, and apparently the venture did not yet have a name. The Spinkses deeded the
property to "Don Bizzell, Trustee" in exchange for $300,000 cash, a note for $445,000, and a
deed of trust covering 446 of the 626 acres. The note and deed of trust were executed by "Don
Bizzell, Trustee." None of the documents reflected for whom Bizzell was acting as trustee.
Some months after closing, Bizzell, Steger, Gantt, and Caskey executed a written
joint venture agreement to form the "626 Joint Venture." The agreement was made effective as
of the date of the sale of the property. Over the next three years, the joint venture actively
managed the property, including paying taxes, making permanent improvements, imposing
restrictive covenants, listing it as a partnership asset on tax returns, and making payments to the
Spinkses.
In 1989 Bizzell informed the Spinkses by letter that the next payment due under the
note would not be made. Bizzell signed the letter as Trustee for "626 Joint Venture d/b/a Cedar
Canyon Ranch." After the note went into default, the Spinkses foreclosed on the property and
later brought this suit to recover the deficiency balance.
DISCUSSION
The Spinkses asserted several causes of action in their suit. They alleged that the
joint venture and its individual venturers were liable for the deficiency balance both on the note
and on the underlying transaction for the sale of land. In their first and third points of error,
defendants assert that they are not liable because neither the joint venture's name nor the
individual venturers' names are on the note. See Tex. Bus. & Com. Code Ann. § 3.401(a) (West
1968). Defendants argue that if they are not liable on the note, they likewise cannot be liable on
the underlying transaction. They also contend that any evidence that the joint venture agreed to
pay the debt was barred (1) by the parol evidence rule because it contradicts the note of which
only "Bizzell, Trustee" was maker and (2) by the statute of frauds because it was not in writing.
In deciding a no-evidence point, we must consider only the evidence and inferences
tending to support the finding of the trier of fact 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).
When reviewing a jury verdict to determine the factual sufficiency of the evidence,
we must consider and weigh all the evidence and should set aside the judgment only if it is so
contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v.
Bain, 709 S.W.2d 175, 176 (Tex. 1986); In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951);
see also Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex. 1986); see generally Powers & Ratliff,
supra.
Steger, Gantt, and Caskey testified that they authorized Bizzell to purchase the land
in Bizzell's name as trustee for the group. Bizzell was authorized to pay $300,000 to the Spinkses
and execute, as trustee, a note for $445,000. Steger, Gantt, and Caskey testified that they
intended for the obligation to be "non-recourse." They meant for the note to be an obligation of
the group, but not the individual members of the group. They apparently believed that as long
as Bizzell executed the note as "trustee," they would not incur personal liability on the debt.
Defendants contend first that any evidence that the joint venture agreed to pay the
debt was barred by the parol evidence rule. We disagree. Where suit is brought on the
underlying transaction rather than the note itself, the parol evidence rule is inapplicable. National
Mar-Kit, Inc. v. Forrest, 687 S.W.2d 457, 459 (Tex. App.Houston [14th Dist.] 1985, no writ).
Moreover, even when the parol evidence rule applies, it only excludes evidence that varies the
terms of an unambiguous contract. Denman v. Hall, 193 S.W.2d 515 (Tex. 1946); Lassiter v.
Rotogravure Comm., Inc., 727 S.W.2d 8 (Tex. App.Dallas 1986, writ ref'd n.r.e.). The rule
does not exclude evidence offered to clarify or explain an ambiguous writing. Lassiter, 727
S.W.2d at 9; Byrd v. Southwest Multi-Copy, Inc., 693 S.W.2d 704 (Tex. App.Houston [14th
Dist.] 1985, no writ). In the present case, the references in the note and other sale documents to
"Don Bizzell, Trustee" are ambiguous. (2) They show that the note was signed by Bizzell in a
representative capacity, but do not show for whom he was acting. Accordingly, evidence showing
that Bizzell was acting as a representative of the joint venture was admissible.
We also disagree with defendants' contention that any liability based on the
underlying indebtedness is barred by the statute of frauds. The statute of frauds provides that
certain types of promises and agreements, including contracts for the sale of real estate, are
unenforceable unless in writing and signed by the person to be charged or by someone lawfully
authorized to sign for him. See Tex. Bus. & Com. Code Ann. § 26.01 (West 1987). However,
where one party to a contract has fully performed his obligations under it, the statute of frauds
is unavailable to the other who knowingly accepts benefits and partly performs. Estate of Kaiser
v. Gifford, 692 S.W.2d 525, 526 (Tex. App.Houston [1st Dist.] 1985, writ ref'd n.r.e.); LeSage
v. Dunaway, 195 S.W.2d 729, 731 (Tex. Civ. App.Waco 1946, no writ). In the present case,
the Spinkses fully performed their part of the transaction by deeding the land to Bizzell as trustee.
Bizzell paid the Spinkses $300,000 cash, and signed a note for $445,000. Over the next three
years, the joint venture managed the property, made improvements to the property, and made
payments to the Spinkses. Therefore, the defense of the statute of frauds is unavailable to
defendants. We conclude there was legally and factually sufficient evidence for the jury to find
that the joint venture agreed to pay the indebtedness underlying the note.
Defendants also argue that the absence of their names from the note relieves them
of liability, notwithstanding any agreement to pay for the land. See Tex. Bus. & Com. Code Ann.
§ 3.401(a) (West 1968) ("No person is liable on an instrument unless his signature appears
thereon."). We disagree. Even if the absence of their signatures would prevent defendants from
being liable "on the note," it would not preclude their liability for the underlying indebtedness
assumed when they agreed to buy the land: "Nothing in this section is intended to prevent any
liability arising apart from the instrument itself. The party who does not sign may still be liable
on the original obligation for which the instrument was given . . . ." Tex. Bus. & Com. Code
Ann. art. 3.401 cmt. 1 (West 1968). The Spinkses' pleadings clearly reflect that they brought suit
both on the note and on the original indebtedness. Under these circumstances, section 3.401 does
not relieve defendants of liability.
A joint venture is generally governed by the same legal rules as a partnership.
Pardco v. Spinks, 836 S.W.2d 649, 651 (Tex. App.El Paso 1992, writ denied); Woodrum v.
Cowan, 468 S.W.2d 592, 598-99 (Tex. Civ. App.Austin), modified on other grounds, 472
S.W.2d 749 (Tex. 1971). It is, of course, settled law that "[a]ll partners are liable jointly and
severally for all debts and obligations of the partnership." Tex. Rev. Civ. Stat. Ann. art. 6132b,
§ 15(1) (West 1970 & Supp. 1994). Therefore, the jury's finding that the joint venture agreed
to pay the indebtedness establishes not only the joint venture's liability, but also that of the
individual venturers.
We overrule points of error one and three. Because the jury's finding challenged
by these points of error will support the judgment, we need not address the remaining points of
error.
CONCLUSION
We affirm the trial court's judgment.
J. Woodfin Jones, Justice
Before Justices Powers, Jones and Kidd
Affirmed
Filed: December 29, 1993
Publish
1. Bizzell was initially named as a defendant, but apparently was dropped from the
lawsuit after he filed bankruptcy.
2. This case is distinguishable from Vector Corp. v. First State Bank & Trust Co., 430
S.W.2d 536 (Tex. Civ. App.Waco 1968, writ ref'd n.r.e.), on which defendants rely. The
Vector court held that there was no ambiguity in a note signed by an agent "individually and as
Trustee." Id. at 538. The evidence in Vector was undisputed, however, that the Bank relied
on the agent personally to pay the note. Id. The court held that because the principal was
disclosed and the agent was bound, the Bank elected to look to the agent, and the principal was
not liable. Id. However, Vector involved a suit on a note, not on the underlying transaction.
Id. at 537. In addition, the evidence in the present case showed that both the Spinkses and
defendants believed the debt was an obligation of the joint venture and not solely of Bizzell.
Finally, while in Vector the agent was individually liable on the note, the agent in the present
case, Bizzell, who signed the note only as trustee, may not be liable on the note. See Bradford
v. McElroy, 746 S.W.2d 294 (Tex. App.Austin 1988, no writ). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1557697/ | 22 So. 3d 262 (2009)
In re In the Matter of the REINSTATEMENT OF ATTORNEY DOE.
No. 2008-BR-01525-SCT.
Supreme Court of Mississippi.
April 23, 2009.
Cynthia H. Speetjens, attorney for appellant.
Adam B. Kilgore, Jackson, attorney for appellee.
EN BANC.
WALLER, Chief Justice, for the Court.
¶ 1. Attorney Doe[1] seeks reinstatement to the practice of law from inactive disability status and from a 180-day suspension imposed by the Complaint Tribunal. Finding that Doe has met the requirements for reinstatement, we find that Doe's petition should be granted pursuant to Rule of Discipline 25.[2]
*263 FACTS AND PROCEEDINGS
¶ 2. On or about June 12, 2004, at the request of a prospective client, Doe scheduled a Sunday afternoon appointment. The prospective client met Doe at her office, where he brutally sexually assaulted her. As a result of this assault, Doe "suffered from severe emotional trauma as well as crippling anxiety, depression, and grief for a significant period of time," which "rendered her incapable of managing her affairs or the affairs of others." Due to fear and embarrassment, Doe failed to report the incident to anyone at the time.
¶ 3. Doe failed to respond to various informal complaints made against her, even after demands were made by the Bar. Thereafter, three formal complaints were filed against Doe by the Mississippi Bar, which were consolidated for trial by order entered June 13, 2006. At trial, Doe admitted the allegations contained in each of the formal complaints. Doe, through counsel, also revealed the circumstances which led to her "total inertia with respect to responding to the issues presented to her."
¶ 4. On July 21, 2006, the Complaint Tribunal found that Doe had violated the following provisions of the Mississippi Rules of Professional Conduct: Rule 1.2(a), Rule 1.3, Rule 1.4, Rule 1.15(b), Rule 1.16(d), Rule 5.5, Rule 8.1(b), and Rule 8.4(a)(c), and (d). As a result, Doe was suspended from the practice of law in Mississippi for 180 days.
¶ 5. At the conclusion of the proceeding, Doe made an ore tenus motion for a transfer to inactive disability status pursuant to Rules of Discipline 17-24. The Complaint Tribunal granted Doe's motion and entered an order transferring Doe to inactive disability status. Doe was enjoined from practicing law in the State of Mississippi until further order from the Supreme Court of Mississippi pursuant to Rule of Discipline 18.
¶ 6. A licensed psychiatrist[3] evaluated Doe and found that she suffered from post-traumatic stress disorder (PTSD) in the aftermath of the sexual assault, and that this ultimately led to her "bec[oming] too impaired to practice law...." A licensed professional counselor treated Doe for PTSD and anxiety for two years as part of a two-year monitoring contract which Doe entered into with the Lawyers and Judges Assistance Program (LJAP). Doe also submitted to monitoring by a member of the LJAP Committee as part of her contract.
¶ 7. On September 9, 2008, Doe filed the instant petition for reinstatement to active status pursuant to Rules of Discipline 12 and 25. Subsequently, the Bar conducted an investigation into the merits of Doe's petition for reinstatement. Miss. R. Disc. 12.8. The Bar's investigation focused on whether Doe had provided sufficient supporting proof of personal capacity to practice *264 law, and included deposing both Doe and her therapist on October 15, 2008.
¶ 8. The Bar also investigated Doe's compliance with her suspension order and whether she has the requisite legal learning necessary to practice law. The Bar concluded that Doe did comply with the order and that she has the requisite legal learning necessary to practice law.
STANDARD OF REVIEW
¶ 9. This Court retains exclusive and inherent jurisdiction over matters pertaining to attorney discipline and reinstatement. Miss. R. Disc. 1(a). We review attorney petitions for reinstatement under a de novo standard and are not bound by any manifest-error or substantial-evidence rule. Stewart v. Miss. Bar, 5 So. 3d 344, 2008 Miss. LEXIS 452 at *3 (Sept. 18, 2008) (citing In re Baker, 649 So. 2d 850, 852 (Miss.1995)).
DISCUSSION
A. Procedural pre-requisites
¶ 10. Rule 25 of the Rules of Discipline for the Mississippi Bar provides the procedure for seeking reinstatement to the practice of law following personal incapacity, and requires the attorney to file a petition and provide any supporting proof of rehabilitation that may be required by the Bar.
Procedures for reinstatement of an attorney suspended because of personal incapacity to practice law shall be, insofar as is applicable, the same as the procedure for reinstatement of an attorney following suspension upon disciplinary grounds. The petition for reinstatement shall be filed with the Clerk of the Court, and a copy of said petition shall be served upon the Bar, and it shall be under a duty to investigate the matter, respond to the petition and appear at the hearing. The petitioner shall be required to supply such supporting proof of personal capacity as may be necessary and, in addition, the attorney may be required to submit to examinations by physicians or psychiatrists selected by the Court. If satisfied that the attorney has regained his capacity to practice law, the Court may reinstate the petitioner to the practice and enter judgment accordingly; provided, however, no judgment of reinstatement shall be entered by default or on an ex parte basis, and in all cases the Court shall hear the Bar. A filing fee of two hundred fifty dollars ($250.00) to defray the expense of investigating the matter shall be paid the Bar upon the filing of each petition for reinstatement, and any petition for reinstatement subsequent to the initial petition shall not be filed within six (6) months from the date of an adverse determination of any prior petition.
Miss. R. Disc. 25 (emphasis added).
¶ 11. The Bar has determined that Doe is in compliance with the requirements for reinstatement from inactive disability status and "strongly" recommends reinstatement.
The medical evidence and testimony serve as overwhelming supporting proof, measured by objective means, that [Doe] possesses the personal capacity to practice law. [Doe] followed the recommendations of the LJAP and sought appropriate treatment. [Doe] has devoted the requisite time and energy necessary to continue her recovery from the traumatic and tragic circumstances that led to her personal incapacity to practice law and has sufficiently shown that she is able to resume practicing law. Therefore, [t]he Mississippi Bar strongly supports [Doe's] Petition for Reinstatement from Inactive Disability status.
*265 B. Review of the petition
Contract with LJAP
¶ 12. In August 2005, Doe entered into a two-year monitoring contract with the LJAP. One condition of this contract required Doe to seek individual counseling to manage her illness. The LJAP referred Doe to a licensed professional counselor, who first saw Doe in November 2005.
¶ 13. The affidavit of Doe's counselor states that she believes that Doe "is no longer impaired ... and is completely prepared to resume her professional responsibilities as a full-time practicing attorney. Her greatest strength is her ethical foundation to fairness and honesty." The counselor reiterated during her deposition that Doe can return to the full-time practice of law if reinstated, that Doe has reached a functional level in interpersonal interactions, and that Doe possesses the capacity necessary to practice law ethically and professionally. She believes that Doe has adequate control of her emotions and is coping with the sadness, anger, and fear resulting from her traumatic experience.
¶ 14. Also as part of her agreement with the LJAP, Doe submitted to monitoring by a member of the LJAP Committee. Doe's monitor submitted an affidavit which provides that "[Doe] participated in the monitoring required by her LJAP contract, and that she not only completed the monitoring required by her contract but participated in the monitoring past the expiration of her LJAP contract."[4] The monitor concluded that she has "seen nothing... indicating any problem that would prevent [Doe] from practicing law." This belief is supported by Chip Glaze, Clinical Director of the LJAP. Glaze's report states that Doe has successfully completed her two-year monitoring contract with the LJAP.
¶ 15. During her deposition, Doe testified about the counseling and treatment she has received, as well as the monitoring conducted by the LJAP Committee member. Doe admitted that she had dealt with the assault in an inappropriate way, and provided significant detail regarding how she copes with her emotions today. She stated that she does not consume alcohol or use drugs, except for the medications prescribed for her.
Medical report
¶ 16. Doe submitted with her petition for reinstatement a medical report of a licensed psychiatrist, who believes that Doe "is fully capable of practicing law again, without any restrictions."[5] The report provides that Doe "has recovered from her psychiatric conditions," "is currently quite stable," and "has adequate emotional control, interpersonal comfort, and mental energy and concentration to sustain [sic] for 10-12 hours per day." The report also notes that Doe has undergone intensive counseling and has taken antidepressant and antianxiety drugs with substantial benefit.
Personal recommendations
¶ 17. The affidavits of eight Mississippi attorneys, as well as a chancery court judge, are attached to Doe's petition for reinstatement. Each of these individuals supports Doe's reinstatement, and each of their affidavits provides that Doe "is an intelligent, hard-working woman who is *266 knowledgeable of the law, who was, and will resume being a competent and ethical attorney and an asset to the legal community and the Mississippi Bar."[6] The affidavit of Doe's employer states that "[Doe] possesses the high moral standards that are necessary for the competent and effective practice of law."
Employment during inactivity
¶ 18. Beginning on July 21, 2006, and continuing up to the date of her petition for reinstatement, Doe has worked for a licensed attorney as an office manager/bookkeeper, and has performed such duties as answering the phone, posting billing slips, accounts payable, copying, filing, ordering office supplies, and dealing with office-equipment vendors. Doe has not engaged in the practice of law.
MPRE
¶ 19. While not required as a condition for reinstatement from inactive disability status, Doe took the Multi-State Professional Responsibility Examination in August 2007. Her score report indicates that she received a scaled score of 104, well above the scaled score of 80 required by Rule of Discipline 12.5. Miss. R. Disc. 12.5.
CONCLUSION
¶ 20. In light of the foregoing evidence and testimony, we find that Doe is in compliance with the requirements for reinstatement from inactive disability status. Doe's petition for reinstatement from inactive disability status pursuant to Rule of Discipline 25 is granted.
¶ 21. DOE'S PETITION FOR REINSTATEMENT TO THE PRACTICE OF LAW IS GRANTED.
CARLSON AND GRAVES, P.JJ., DICKINSON, RANDOLPH, LAMAR, KITCHENS, CHANDLER AND PIERCE, JJ., CONCUR.
NOTES
[1] This case was filed under seal, and this opinion will use the name "Doe," rather than the petitioner's name, to preserve confidentiality.
[2] Doe sought reinstatement pursuant to Rules 12 and 25 of the Rules of Discipline. Because the Complaint Tribunal suspended Doe for 180 days, Rule of Discipline 12, which applies only to suspensions of six months or more, is inapplicable. See Miss. R. Disc. 12(a) ("No person ... suspended for a period of six months or longer shall be reinstated ... except upon petition to the Court."); see also, e.g., Miss. Bar v. Alexander, 669 So. 2d 40, 44 (Miss. 1996) (Banks, J., dissenting) ("the 180 day suspension is significantly different from that imposed here [6 months] because, under our rules a suspension of six months or more requires a petition for reinstatement"); Miss. Code Ann. § 1-3-29 (Rev.2005) ("The term `month,' when used in any statute, means a calendar month, unless a contrary intention be expressed.").
[3] Information which may compromise Doe's confidentiality has been omitted from this opinion.
[4] Betty Daugherty, Director of the LJAP, submitted a letter to the Bar confirming that Doe had fulfilled her contract with the LJAP.
[5] During the October 15, 2008, deposition, when questioned about the psychiatrist's medical report, Doe's counselor stated that she agreed with the psychiatrist's assessment that Doe has the capacity to return to the practice of law.
[6] Doe made clear during her deposition that each affiant was aware of her circumstances when making his or her recommendation that she be allowed to return to the practice of law. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453636/ | 253 P.3d 393 (2011)
STATE
v.
MARCHI.
No. 85582-0.
Supreme Court of Washington, Department II.
April 27, 2011.
Disposition of Petition for Review Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858108/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-92-460-CR
CLIFTON HARRIS,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE COUNTY COURT AT LAW OF CALDWELL COUNTY
NO. 21,526, HONORABLE EDWARD L. JARRETT, JUDGE PRESIDING
Appeal is taken from a conviction of the misdemeanor offense of driving while
intoxicated, second offense. See Tex. Rev. Civ. Stat. Ann. art. 6701l-1(d) (West Supp. 1993).
Trial was before the court upon a plea of guilty. Punishment was assessed at confinement in jail
for two years, probated and a $700 fine. In a single point of error, appellant asserts that the trial
court erred in requiring him to submit to a period of fifteen days detention as a condition of
probation. We will overrule appellant's point of error and affirm the judgment of the trial court.
Texas Code Crim. Proc. Ann. art. 42.12, §§ 12 & 13 (West Supp. 1993) permits
detention as a condition of probation in certain instances. The pertinent provisions of sections 12
and 13 provide:
Sec. 12. When the court having jurisdiction of a misdemeanor case grants
probation to the defendant, the court may require as a condition of probation that
the defendant submit to a period of detention in a county jail or community
corrections facility to serve a term of imprisonment not to exceed 30 days and
serve up to 100 hours of community service. In a felony case the court may
require as a condition of probation that the defendant submit to a period of
detention in a county jail to serve a term of imprisonment not to exceed 180 days.
Sec. 13. (a) A court granting probation to a defendant convicted of an offense
under Article 6701l-1, Revised Statutes, and punished under Subsection (d), (e) or
(f) of that article shall require as a condition of probation that the defendant submit
to:
(1) 72 hours of detention in a jail if the defendant was convicted under
Subsection (d) of Article 6701l-1, Revised Statutes; 10 days of detention in a jail
if the defendant was convicted under Subsection (e) of Article 6701l-1, Revised
Statutes; or 30 days of detention in a jail if the defendant was convicted under
Subsection (f) of Article 6701l-1, Revised States; and . . .
Conviction in the instant cause was under article 6701l-1(d). Appellant contends
that under article 42.12, section 13(a)(1) the sentencing court is limited to imposing seventy-two
hours of detention as a condition of probation. The basis of appellant's argument is that section
12 is a general statute vesting courts with the discretion to require a period of detention of up to
thirty days in misdemeanor while section 13(a) is a special statute dealing specifically with
detention of probation in certain driving while intoxicated cases. Appellant asserts that the
specific provision relating to driving while intoxicated controls over the general misdemeanor
provision. See Ogilvie v. State, 711 S.W.2d 365, 367 (Tex. App.--Dallas 1986, pet. ref'd).
Without the words "not less than" preceding section 13(a)(1), appellant urges that seventy-two
hours is the only period of detention that may be imposed as a condition of probation for driving
while intoxicated, second offense.
In State v. Rogers, 782 S.W.2d 303 (Tex. App.--Dallas 1989, no pet.), cited by
appellant, the defendant was convicted of driving while intoxicated, first offense; however
punishment was enhanced under the provisions of subsection (f) of art. 6701l-1 upon defendant's
plea of true to an enhancement paragraph alleging that defendant had an open container of
alcoholic beverage in his immediate possession. The court reasoned that when viewed together,
the driving while intoxicated and probation statutes "reveal a common scheme to reduce the
confinement connected with probation to a period less than that connected with a conviction
without probation." Id. at 304. The Rogers court concluded that the lesser penalty set forth in
the specific provision relating to driving while intoxicated cases controlled over the general
misdemeanor provisions. Id. at 304.
In Vasquez v. State, 779 S.W.2d 515 (Tex. App.--Austin 1989, no pet.), this Court
was asked to construe the predecessors to sections 12 and 13. Act of May 27, 1983, 68th Leg.,
R.S., ch. 303, § 11, 1983 Tex. Gen. Laws 1590 (Tex. Code Crim. Proc. Ann. art. 42.12, §
6b(a), (b)(1), since amended and renumbered). Under article 42.12, section 6b(a) as it then read,
courts were vested with the authority to require a term of detention "not to exceed 30 days or one-third of the sentence whichever is lesser" in misdemeanor cases generally. Section 6b(b)(1)
provided that a court "shall require" as a condition of probation following an article 6701l-1(d),
(e), or (f) conviction that the defendant submit to detention for seventy-two hours, ten days, or
thirty days, respectively. The defendant advanced the same argument in Vasquez as appellant in
the instant cause. This Court rejected the argument, reasoning that it would be "neither
reasonable nor just" to require a jail term of up to thirty days as a condition of probation
following a defendant's first DWI conviction, while limiting a second offender to a jail term of
only seventy-two hours. Id. at 517. This Court concluded that section 6b(b)(1), now section
13(a)(1), mandated a minimum period of detention for persons placed on probation following
convictions pursuant to article 6701l-1(d), (e), and (f), and that trial courts in such cases retained
the authority under section 6b(a), now section 12, to require longer periods of detention. Id.
In Chauncey v. State, 837 S.W.2d 179 (Tex. App.--El Paso 1992, pet. granted on
other grounds), defendant was convicted of driving while intoxicated enhanced to a felony offense
based on two prior driving while intoxicated convictions. Chauncey contended that the imposition
of 180 days confinement as a condition of probation under article 42.12, section 12 violated the
specific provision in section 13(a)(1) providing for thirty days detention when the defendant was
convicted under subsection (f) of article 6701l-1. Citing Vasquez, the Chauncey court concluded
that the legislature did not intend to limit the trial court's discretion by "shortening the period of
incarceration that could be imposed as a condition of probation in such cases." Id. at 184.
Moreover, the Chauncey court noted the stated purpose of article 42.12 is to give trial courts the
responsibility for determining the conditions of probation and to remove limitations that could
"have acted as barriers to effective systems of probation in the public interest." See Tex. Code
Crim. Proc. Ann. art. 42.12, § 1 (West Supp. 1993).
We conclude that the legislature did not intend to restrict the trial court's discretion
by shortening the period of detention to seventy-two hours as a condition of probation in driving
while intoxicated, second offense cases. The fifteen-day period of detention ordered in this cause
is less than the maximum of thirty days authorized in section 12. Accordingly, appellant's point
of error is overruled.
The judgment is affirmed.
Tom G. Davis, Justice
Before Justices Powers, Aboussie and Davis*
Affirmed
Filed: December 8, 1993
Do Not Publish
* Before Tom G. Davis, Judge (retired), Court of Criminal Appeals, sitting by assignment.
See Tex. Gov't Code Ann. § 74.003(b) (West 1988). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1538967/ | 397 Pa. Super. 507 (1990)
580 A.2d 412
COMMONWEALTH of Pennsylvania, Appellant,
v.
Darryl G. OWEN.
Supreme Court of Pennsylvania.
Submitted April 9, 1990.
Decided September 24, 1990.
W. Jeffrey Yates, Asst. Dist. Atty., Bellefonte, for Com., appellant.
*508 Roy K. Lisko, State College, for appellee.
Before TAMILIA, HOFFMAN and CERCONE, JJ.
HOFFMAN, Judge:
This appeal by the Commonwealth is from the order below granting appellee Darryl G. Owen's petition for a writ of habeas corpus and dismissing the driving under the influence charges filed against him. The Commonwealth contends that the court below erred in determining that the Commonwealth failed to establish a prima facie case against appellee in that it did not demonstrate that the alleged offense occurred on a "highway" or "trafficway" as required by the Motor Vehicle Code. See 75 Pa.C.S.A. § 101 et seq. For the reasons set forth below, we affirm.
On February 3, 1989, a criminal complaint was filed against appellee, charging him with driving under the influence of alcohol. See 75 Pa. C.S.A. § 3731(a)(1), (a)(4). The charges arose in connection with Owen's operation of a vehicle in the Nittany Silver Parking Lot in University Park, Centre County, Pennsylvania, on January 27, 1989. A preliminary hearing was held before a District Justice on March 8, 1989, and Owen was bound over on the charges. Owen then filed a petition for a writ of habeas corpus, alleging that the Commonwealth had failed to establish a prima facie case because it did not make a showing that the offense occurred on a "highway" or "trafficway" as required by 75 Pa. C.S.A. § 3101. On April 17, 1989, the Centre County Court of Common Pleas held a hearing on the habeas petition. Thereafter, on May 18, 1989, the court filed an order and opinion granting the writ of habeas corpus and dismissing the charges. This appeal by the Commonwealth followed.[1]
We have noted that, "[i]n the pre-trial setting, the focus of the habeas corpus hearing is to determine whether *509 sufficient Commonwealth evidence exists to require a defendant to be held in government `custody' until he may be brought to trial." Commonwealth v. Morman, 373 Pa.Super. 360, 367, 541 A.2d 356, 360 (1988). A pre-trial petition for a writ of habeas corpus thus is similar in purpose to a preliminary hearing. Id., 373 Pa.Superior Ct. at 365, 541 A.2d at 359. And, of course, "`[t]he primary reason for the preliminary hearing is to protect an individual's right against unlawful arrest and detention. It seeks to prevent a person from being imprisoned or required to enter bail for a crime which was never committed, or for a crime with which there is no evidence of his connection. . . .'" Id. (citations omitted). The Morman Court also made clear that, in making this pre-trial determination, the habeas court is not limited to reviewing the evidence presented at the preliminary hearing; instead, "the Commonwealth may present additional evidence at the habeas corpus stage in its effort to establish at least prima facie that a crime has been committed and that the accused is the person who committed it." Id., 373 Pa.Superior Ct. at 365-66, 541 A.2d at 359.
The Commonwealth contends that the court below erred in concluding that it had failed to make a prima facie showing that the offense in question occurred on a "highway" or "trafficway". Owen was charged with driving under the influence, which is a "serious traffic offense" under the Code. See 75 Pa. C.S.A. § 3101(b). Section 3101(b) further states that the provisions of the Code relating to serious traffic offenses "shall apply upon highways and trafficways throughout this Commonwealth." The definitional section of the Code defines a "highway" as:
The entire width between the boundary lines of every way publicly maintained when any part thereof is open to the use of the public for purposes of vehicular travel. The term includes a roadway open to the use of the public for vehicular travel on grounds of a college or university or public or private school or public or historical park.
Id. § 102. A "trafficway", in turn, is defined as:
The entire width between property lines or other boundary lines of every way or place of which any part is open *510 to the public for purposes of vehicular travel as a matter of right or custom.
Id.
The issue presented concerns the nature of the parking lot in which Owen was stopped. Specifically, the question is whether the Commonwealth demonstrated that the lot was "open to the use of the public for purposes of vehicular travel" (a highway) or was "open to the public for purposes of vehicular travel as a matter of right or custom" (a trafficway). After meticulously reviewing the record in this case, we must conclude that the Commonwealth did not make such a showing.
With regard to the sufficiency of proof required to establish a prima facie case at a preliminary hearing, this Court has noted that:
The quantity and quality of evidence presented there "should be such that if presented at trial in court, and accepted as true, the judge would be warranted in allowing the case to go to the jury." Commonwealth ex rel. Scolio v. Hess, 149 Pa.Super. 371, 27 A.2d 705 (1942). The Commonwealth's burden at a preliminary hearing is to establish at least prima facie that a crime has been committed and that the accused is the one who committed it. Commonwealth v. Mullen, 460 Pa. 336, 333 A.2d 755 (1975). This means that at a preliminary hearing, the Commonwealth must show the presence of every element necessary to constitute each offense charged and the defendant's complicity in each offense. Proof beyond a reasonable doubt is not required, nor is the criterion to show that proof beyond a reasonable doubt is possible if the matter is returned for trial. However, proof, which would justify a trial judge submitting the case to the jury at the trial of the case, is required. Inferences reasonably drawn from the evidence of record which would support a verdict of guilty are to be given effect, Commonwealth v. Rodgers, 235 Pa.Super. 106, 340 A.2d 550 (1975), and the evidence must be read in the light most favorable to the Commonwealth's case. Commonwealth *511 v. Zeringo, 214 Pa.Super. 300, 257 A.2d 692 (1969). Prosecutorial suspicion and conjecture are not evidence and are unacceptable as evidence.
Our function is to take the facts proven by the Commonwealth at the preliminary hearing and to determine whether the sum of those facts fits within the statutory definition of the types of conduct declared by the Pennsylvania legislature in the Crimes Code to be illegal conduct. If the proven facts fit the definition of the offenses with which the appellees are charged, then a prima facie case was made out as to such offense or offenses. If the facts do not fit the statutory definitions of the offenses charged against the [defendant], then the [defendant] [is] entitled to be discharged.
Commonwealth v. Snyder, 335 Pa.Super. 19, 23-24, 483 A.2d 933, 935 (1984) (emphasis supplied) (quoting Commonwealth v. Lynch, 270 Pa.Super. 554, 581-82, 411 A.2d 1224, 1238-39 (1979) (plurality opinion), aff'd in part, rev'd in part sub nom. Commonwealth v. Wojdak, 502 Pa. 359, 466 A.2d 991 (1983) (plurality opinion)); see also Commonwealth v. Wojdak, supra (to prove prima facie case, Commonwealth must show existence of each material element of charge; "the absence of evidence as to the existence of a material element is fatal.").
The difficulty here is that the habeas court was presented with no competent evidence concerning the nature of the parking lot where appellee was stopped by police. As we have noted above, the preliminary hearing in this matter was held on March 8, 1989. The district justice's return of transcript, filed pursuant to Pa.R.Crim.P. 146, indicates that only one witness, Pennsylvania State University police officer Jeffrey Jones, was sworn and testified at that preliminary hearing. However, Officer Jones' testimony apparently was not transcribed, and the Commonwealth did not otherwise attempt to introduce the substance of the testimony at the habeas hearing. Moreover, the other documents attached to the return of transcript (i.e., the criminal complaint and the "arrest warrant affidavit" containing a statement *512 of probable cause), contain no description of the parking lot or other evidence regarding whether the lot was open to the public.
Similarly, a review of the notes from the April 17, 1989 hearing on the habeas petition reveals no evidence concerning the parking lot.[2] The hearing consisted entirely of legal argument from counsel concerning whether a parking lot could be considered a trafficway or highway. Legal argument, of course, is no substitute for proof, and this legal argument had absolutely no factual foundation. Although there was some discussion concerning whether the parking lot was open to the public, the Commonwealth introduced no witnesses or other evidence. Moreover, the parties did not stipulate to a description of the lot and its usage, nor did they ask the court to take judicial notice of the characteristics of the lot in question. In addition, the Commonwealth did not seek to move into evidence notes or other evidence from the preliminary hearing. Thus, the habeas court was not even in a position to evaluate the sufficiency of the evidence produced at the preliminary hearing.[3] We are aware, of course, that the evidentiary *513 requirements at a preliminary hearing, and at a habeas hearing, are somewhat relaxed. Nevertheless, as we have noted above, in order to carry its burden of demonstrating a prima facie case the Commonwealth still must offer some proof to establish each material element of the offenses charged. See Commonwealth v. Snyder, supra; see also Commonwealth v. Wojdak, supra. This the Commonwealth utterly failed to do. Accordingly, we see no basis upon which to reverse the court's order granting the habeas petition.[4], [5]
For the foregoing reasons, we affirm the order below.
Order affirmed.
TAMILIA, J., files a dissenting Opinion.
TAMILIA, Judge, dissenting:
I respectfully but vigorously dissent to the majority Opinion affirming the trial court's Order granting appellant's petition for writ of habeas corpus. Contrary to the majority, I would reverse and remand the case for trial.
This is an appeal from the May 18, 1989 Order of court granting appellee's petition for writ of habeas corpus. On January 27, 1989, at approximately 5:53 p.m., a Pennsylvania *514 State University police officer observed appellee as he attempted to enter his car which was parked in the Nittany Silver parking lot, a small parking lot located on the university campus next to a dormitory. Appellee was swaying back and forth as he stood by his car while trying to locate his keys. He retrieved them from his coat pocket and spent approximately three minutes just getting the driver's door open. Once appellee was in the car, he turned the headlights on and off twice, raced the engine, backed up the car and then "squealed" the tires pulling out. The police officer effectuated a traffic stop, observed appellee's disheveled appearance and combativeness and asked him to perform certain field sobriety tests. Upon appellee's failure to pass any of the three tests, the police officer arrested appellee and transported him to a local hospital, where a blood sample indicated appellee's blood alcohol level was .173 per cent. Based on his observations, the test results and the blood sample results, the police officer, on February 3, 1989, swore out an arrest warrant for appellee for driving under the influence.[1]
At a preliminary hearing on March 8, 1989, the district justice bound appellee over on the charges. Appellee petitioned the court for a writ of habeas corpus challenging the district justice's holding him for court. As grounds for his petition, appellee asserted the Commonwealth failed to establish a prima facie case against him because the offense did not take place on a "highway" or "trafficway" as required under the Motor Vehicle Code.[2] The court granted *515 appellee's petition by Order dated May 18, 1989. The Commonwealth brings this appeal, having certified in good faith that the court's Order terminates and substantially handicaps the Commonwealth's prosecution of appellee. Commonwealth v. Dugger, 506 Pa. 537, 486 A.2d 382 (1985); Commonwealth v. Deans, 388 Pa.Super. 521, 565 A.2d 1230 (1989).
The Commonwealth contends the court erred in granting appellee's petition because the parking lot is a highway or trafficway within the meaning of the statute. The Motor Vehicle Code provides:
§ 3101. Application of part
(a) General rule. Except as provided in subsection (b), the provisions of this part relating to the operation of vehicles refer exclusively to the operation of vehicles upon highways except where a different place is specifically referred to in a particular provision.
(b) Serious traffic offenses. The provision of Subchapter B of Chapter 37 (relating to serious traffic offenses) shall apply upon highways and trafficways throughout this Commonwealth.
75 Pa.C.S. § 3101. Highways and trafficways are defined as:
§ 102. Definitions
. . .
"Highway" The entire width between the boundary lines of every way publicly maintained when any part thereof is open to the use of the public for purposes of vehicular travel. The term includes a roadway open to the use of the public for vehicular travel on grounds of a college or university or public or private school or public or historical park.
"Trafficway" The entire width between property lines or other boundary lines of every way or place of which any *516 part is open to the public for purposes of vehicular travel as a matter of right or custom.
75 Pa.C.S. § 102. I conclude, without question, the evidence establishes the incident occurred in a place open to the public for purposes of vehicular travel as a matter of right or custom. The majority would require that extensive evidence be introduced to establish the nature of the parking lot and the degree of public access to bring it within the meaning of the statute. I believe the statute is broad enough to comprehend any parking lot, and establishes that a parking lot used by motor vehicles and any persons, even if limited to students or university personnel, creates the necessary element for the purpose of establishing a prima facie case.
The record shows the Nittany Silver parking lot is a restricted student parking lot provided for the use of dormitory residents. However, the parking lot is restricted only from 5 a.m. to 5 p.m. Otherwise, the lot is open to public use. Moreover, even if restricted by signs, a parking lot is a trafficway for purposes of section 3101 if it is used by members of the public. Commonwealth v. Wilson, 381 Pa.Super. 253, 553 A.2d 452 (1989). In Wilson, the appellant was arrested and charged with driving under the influence after operating a car in a parking lot marked with private signs. The Wilson Court stated:
It would raise form to towering levels above substance if parking lots, in which vehicular traffic is encouraged and occurs, sometimes at high rates of speed, were to become "DWI-free zones," in which drunk driving is tolerated from entrance to exit. Such a construction would seriously undermine the effectiveness of any drunk driving prohibitions.
Id., 381 Pa.Superior Ct. at 257, 553 A.2d at 454.
The definition of "trafficway" in § 102 clearly allows for inclusion of public parking lots because such lots are clearly the "width between property lines or other boundary lines of every way or place of which any part is open to the *517 public for purposes of vehicular travel as a matter of right or custom."
Appellee would limit this lot only to the permissible residents of an adjoining dormitory. No evidence is adduced that only such residents could use the lot. Private property signs or restricting use to customers cannot limit the application of section 102, see Wilson, supra, and neither can stickers or restricted parking designations, on what is essentially a public area, achieve that result.
As pointed out above, the parking lot was unrestricted at the time of the arrest. Appellee does not contest this fact. I would find the parking lot had changed from a limited public use to a general use parking lot. (I would not hold, however, that had appellant been arrested during the restricted time period, our result in this case would have been any different.) Stickers or parking zones cannot be the basis upon which to restrict a trafficway or roadway from application of the DUI statutes. If this were so, a major portion of city streets in Pittsburgh and Philadelphia in congested residential areas and surrounding universities, colleges and hospitals would be off-limits to arrest for DUI when a person was in one of those areas. The parking areas of some of our large housing developments, public and private, likewise would be insulated. Such a holding now requires of the police awaiting the crossing of a multitude of imaginary lines by drunken drivers to effect stops or arrests if they were to be upheld by the court.
As it was held in Commonwealth v. Mikulan, 504 Pa. 244, 470 A.2d 1339 (1983), an important purpose of the laws on drunk driving is to deter drunk driving and to retard the wanton and senseless slaughter of and injury to innocent people upon our highways caused by drunk drivers. Id., 504 Pa. at 248, 470 A.2d at 1341. It is unthinkable that the legislature would have conceived legislation imposing such restrictions and limitations on the reasonable implementation of their legislative intent. The respected jurist, the Honorable Carson Brown, in discussing the implications of his decision, expressed serious, if not grave, misgivings *518 over the possibility that a person could be struck and killed in a parking lot by a drunk driver and yet escape liability for his actions (H.T., 4/17/89, p. 7). To eliminate the uncertainty and resolve ambiguity, it is necessary to place a different interpretation on the use of the parking lot than did the trial judge. Judge Brown, in making his findings, relying on a previous decision he had rendered (Commonwealth v. Roesch, 18 Pa. D. & C.3d 59 (C.P. Centre County 1981)), found the lot was not customarily used by the public. This interpretation at least outwardly distinguishes the present case from Wilson. I disagree with that interpretation.
I would hold that the residents of the dormitory are part of the public as well as visitors, repairman, pizza delivery persons or any of the myriad of other persons who have access to that lot. It is inconceivable that with the incredible number of automobiles in use in our society today and the increasing dedication of extensive areas for parking purposes with accompanying schemes of limitation and restrictions as to use, that the law would permit such areas to be insulated from the consequences of drunk driving. We are no less subject to all of the harms to be prevented by application of the DUI laws in parking lots than on busy highways or city streets. My distinguished colleagues, in refusing to acknowledge that a parking lot per se cannot be distinguished from a city street, have created a free zone for drunk drivers. They would emasculate the law by ignoring the facts.
A case could be made that a driver or pedestrian should be even more cautious and sober in large parking lots than on city streets because of the high concentration of cars and people and the inevitable crisscrossing between the two. In Commonwealth Dept. of Transportation v. Bendik, 112 Pa.Commw. 591, 535 A.2d 1249 (1988), the Commonwealth Court ruled that a parking lot was a trafficway because it was open to the public and vehicular traffic did occur on it. I believe this holding and that of Wilson, supra, supports my position that despite restrictions which may be imposed as to the class of persons permitted to park in a particular *519 area, customary use by the public means those persons in the restricted class as well as any other persons reasonably expected to have vehicular access to the property. Neither the size of the lot, its administrative restrictions, its attachment to a residential unit, business or institution for the use of the persons using that facility nor the class of persons privileged to use the lot insulate intoxicated persons from the DUI laws pursuant to 75 Pa.C.S. § 3731. There is no need, therefore, to establish in a preliminary hearing the nature of the traffic or business conducted on a parking lot.
I would, therefore, reverse the trial court's Order granting appellee's petition for writ of habeas corpus and dismissing the charges against him. This case should be remanded for trial.
NOTES
[1] It is settled that the Commonwealth may appeal from an order discharging a defendant on a writ of habeas corpus. See Commonwealth v. Hess, 489 Pa. 580, 414 A.2d 1043 (1980); Commonwealth ex rel. Bryant v. Hendrick, 444 Pa. 83, 280 A.2d 110 (1971); Commonwealth v. Oeler, 357 Pa.Super. 281, 515 A.2d 977 (1986).
[2] The transcript from the April 17 hearing is not part of the certified record on appeal. Because the official record does not contain the notes from either the preliminary hearing or the habeas hearing, we could affirm the order below simply based on the Commonwealth's failure to provide an adequate record for us to review. See Commonwealth v. Williams, 357 Pa.Super. 462, 516 A.2d 352 (1986). We note, however, that the Commonwealth has appended an unofficial copy of the notes from the habeas hearing to its brief, and Owen does not dispute the accuracy of the unofficial transcript. Because an examination of the unofficial notes makes clear that the Commonwealth utterly failed to prove the existence of a prima facie case and because there is no dispute concerning the accuracy of this unofficial transcript, we are satisfied that reliance on it to evaluate the sufficiency of the Commonwealth's proof at the habeas hearing is not inappropriate. Cf. Commonwealth v. Garbett, 256 Pa.Super. 488, 498 n. 8, 390 A.2d 208, 212 n. 8 (1978) (plurality opinion).
[3] The inadequacy of the record created by the Commonwealth calls into question the accuracy of certain of its factual statements. For example, the Commonwealth asserts in its appellate brief that the lot in question "is a reserved parking lot from 5 a.m. to 5 p.m." See Brief for Appellant at 10. The suggestion, of course, is that the lot otherwise was open to the public. If this assertion was supported by record evidence, we undoubtedly would have to reverse. However, as noted in the text, there is no evidence regarding when, and to whom, the lot was open.
[4] The court below did not grant the petition based on the Commonwealth's failure to produce evidence, but instead found that the parking lot was a restricted student parking lot that was not customarily open to the public. It is settled, however, that a reviewing court may affirm a decision of the trial court if the result is correct on any ground. See, e.g., Commonwealth v. Terry, 513 Pa. 381, 521 A.2d 398 (1987), cert. denied sub nom. Terry v. Pennsylvania, 482 U.S. 920, 107 S. Ct. 3198, 96 L. Ed. 2d 685 (1987).
[5] We should emphasize the limited nature of our holding. We are aware that prior decisions in this Commonwealth have held that a parking lot may be considered a trafficway for purposes of the Motor Vehicle Code. In all of these cases, however, there was a finding that the lot in question was open to the public. See, e.g., Commonwealth v. Wilson, 381 Pa.Super. 253, 553 A.2d 452 (1989), allocatur denied (June 30, 1989); Commonwealth v. Baughman, 357 Pa.Super. 535, 516 A.2d 390 (1986); see also Commonwealth, Dept. of Transp. v. Bendik, 112 Pa.Commw. 591, 535 A.2d 1249 (1988). In the case at bar, by contrast, there simply is no record evidence to support such a finding.
[1] 75 Pa.C.S. § 3731(a)(1)-(4).
[2] The majority affirms the trial court as no evidence was adduced in the magistrate's hearing on the record to establish the parking lot was open to the public for purposes of vehicular traffic as a matter of right or custom. Neither the appellant nor appellee have contested the factual allegations of this case but are relying on the legal intent of the statute. As such, a campus parking lot, no less than a motel parking lot, Commonwealth Dept. of Transportation v. Bendik, 112 Pa.Commw. 591, 535 A.2d 1249 (1988), or a club parking lot, Commonwealth v. Wilson, 381 Pa.Super. 253, 553 A.2d 452 (1989), has generally accepted attributes.
The need for a record to be made to establish specifically and in detail the attributes of this parking lot is, therefore, no more necessary than the need to take detailed evidence as to the attributes of any street or highway where a violation occurred. Stating what it is is sufficient, unless a party raises specific questions which place the matter in issue. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558008/ | 493 F.Supp.2d 880 (2007)
Candelaria C. PONCE, as Personal Representative for the Estate of Abelino Ponce, Deceased; Able Ponce, Naomi Ponce, Individually and as Next Friend of Son, Joel Eugene Ponce, a Minor Child; Candelaria Martinez, Individually and as Next Friend of Son, Abel Rene Ponce, a Minor Child; Jose Ponce; Arthur Ponce; Juan Ponce; and Paula Gomez Ponce, Plaintiffs
v.
M/V ALTAIR, her engines, boilers, tackle, apparel, etc., in rem; and Scarlati Ventures, Inc. and B Navi Spa, in personam, Defendants.
No. C.A. G-05-539.
United States District Court, S.D. Texas, Galveston Division.
June 7, 2007.
*881 *882 Guy Lee Womack, Attorney at Law, Douglas Travis Gilman, Gilman & Allison, Houston, TX, for Plaintiffs.
*883 David R. Walker, Royston Rayzor et al, Houston, TX, for Defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
SAMUEL B. KENT, District Judge.
This case was tried to an advisory jury panel on October 16, 2006, with the Honorable Samuel B. Kent presiding. Having carefully considered all the trial testimony, exhibits, pleadings, credibility of each witness, the jury's recommended findings and verdict, and all post-trial submissions, particularly including the proposed findings of fact and conclusions of law from both sides, the Court hereby enters its Findings of Fact and Conclusions of Law.
I
FINDINGS OF FACT
A Nature of the Case
1. This wrongful death and survival case centers on the October 4, 2005 fatality of Mr. Abelino Ponce ("Ponce"), a 56-year-old longshoreman killed while working aboard the WV ALTAIR[1] in the Port of Houston. Mr. Ponce was operating the vessel's No. 1 cargo boom and unbeknownst to Mr. Ponce, the boom was missing a wire runner guide. The missing runner guide allowed the wire runner to excessively slacken and "catch" or snag on a make-shift "step" that had been welded to equipment underneath the boom. While standing at the winch controls, with the boom in operation, the wire runner broke free from the "step", causing it to slash across the winch operation platform, striking Ponce from behind. Ponce was thrown violently several feet in the air, landing on his head and causing fatal injuries.
2. Within 24-hours of the accident,. Plaintiffs initiated this action against the WV ALTAIR in rem alleging that the premature and untimely death of Mr. Ponce occurred as a result of vessel negligence in failing to discharge the duties prescribed under 33 U.S.C. § 905(b) consistent with standards articulated in Scindia Steam Navigation Co. v. De. Los Santos, 451 U.S. 156, 101 S.Ct. 1614, 68 L.Ed.2d 1 (1981) and its progeny. The same day, Plaintiffs perfected arrest of the WV ALTAIR, and conducted an on-board inspection prior to releasing the vessel for departure[2] On November 28, 2005, Plaintiffs amended their pleadings to add the vessel's owner and operator, Scarlati Ventures, Inc. and B Navi SpA, respectively, as Defendants to this suit.
B. Jurisdiction and Venue
3. With the exception of Paula Gomez Ponce,[3] Plaintiffs are all Texas citizens residing within the Southern District of Texas. On the morning in question, Ponce was working as a longshoreman employed by Americargo Transport ("Americargo") on the Defendants' vessel. The WV ALTAIR, having previously called upon this District on other occasions, was docked alongside the New Terminal Warehouse facility located at 1 Wharf Street, Houston, Texas 77012, within this Court's jurisdiction. In connection with the arrest, Defendants' P & I insurer, Steamship Mutual *884 Underwriting Association (Bermuda) ("Claimant"), posted a Letter of Undertaking as security for the vessel's release. Claimant subsequently executed waivers of service and answered on behalf of Defendants herein.
4. The Court finds that this case is properly brought within its admiralty and maritime jurisdiction pursuant to 28 U.S.C. § 1333, et seq. The Court further finds that it has jurisdiction over all of the parties, and that proper venue for this suit is in this District and before this Court.
C. Factual Background and Liability
1. Claims Asserted
5. Plaintiffs have brought this suit pursuant to 33 U.S.C. § 905(b) against the M/V ALTAIR, Scarlati Ventures, Inc., and B Navi SpA (collectively "Defendants") alleging Defendants are jointly and severally liable and accountable for the untimely death of Ponce by reason of negligent acts or omissions committed by the vessel, her agents, representatives or employees.
6. In their pleadings, Plaintiffs state that while Mr. Ponce was operating the cargo boom on the morning of October 4, 2005, the hoist wire running along the bottom of the boom became slack, and snagged on a "step" welded to the forward winch housing in the path of the boom's travel while being swung over the starboard side of the ship. Plaintiffs allege that the hoist wire was allowed to develop slack, deviate from its intended path along the bottom of the boom, and become snagged because the vessel's cargo gear was missing a runner guard/guide. Further, Plaintiffs argue that in watching the signalman (or the load), Mr. Ponce would not have noticed the wire runner snagging on the winch to his right, behind him, because he was required to exclusively focus on either the signalman or the load at all times.
7. Plaintiffs contend that while attempting to lift a load of cargo out from Hatch No. 2, the hoist wire became taught and sprung into Ponce standing at the controls who, unfortunately, was caught directly in the bight of the wire. Plaintiffs allege Mr. Ponce was caused to be flung some 15 to 20 feet into the air and 40 to 60 feet over to the port-side upon coming into contact with the flailing wire. Accordingly, Plaintiffs suggest the initial blows experienced by Ponce were not fatal, and that he survived a period of seconds both on the ground and in the air prior to succumbing to his injuries and, therefore, was caused to sustain certain conscious pain and suffering.
2. Evidence Reviewed and Findings
8. Abelino Ponce ["Ponce"] was born on October 27, 1946. Ponce worked on the waterfront as a longshoreman for over 30 years for various stevedore companies. Ponce was trained and had operated ships' cranes and gear on many occasions prior to his death on October 4, 2005. At the time of his death, Ponce earned approximately $30,000 per year.
9. Ponce is survived by his wife, Candelaria C. Ponce, his two adopted minor grandsons, Joel Eugene Ponce and Abel Rene Ponce, and his mother, Paula Gomez Ponce. Joel, Abel and Paula were completely dependent upon Ponce for financial support. Ponce is also survived by five adult children, Abel Ponce, Jose Ponce, Arthur Ponce, Candelaria Martinez, and Naomi Ponce, who all received limited and sporadic financial support and services from Ponce in varying amounts, with the exception of Abel Ponce.
10. On the morning of October 4, 2005, Ponce, a longshoreman employed by Americargo arrived at work approximately 35 to 40 minutes after 7:00 a.m. to commence discharging operations on board the M/V *885 ALTAIR. The M/V ALTAIR was owned by Scarlati Ventures and operated by B Novi SpA. At the time of the incident, the vessel was moored alongside the New Terminal Warehouse facility in Houston, Texas. The witness testimony and evidence indicate, and the Court agrees, that the M/V ALTAIR was an old ship, in remarkably poor condition, and not well maintained. In maritime parlance, it was a "rust bucket." Ponce was part of a 5-member longshore gang responsible for discharging a cargo of steel from the vessel's Hatch No. 2. There were three longshoremen working inside Hatch No. 2, and Ponce was operating the vessel's cargo boom. Another served as a flogger.
11. At or about 8:00 a.m., and prior to commencing cargo discharge operations, Ponce swung the cargo boom over the inshore side of the vessel to pick-up a loading tray from the dock. The controls for the cargo boom were located on the mast house of the vessel, amidships at the aft side of Hatch No. 2, so that the crane operator could see into Hatch No. 2. The cargo boom being utilized for the cargo discharge operations was located aft of the controls and Ponce. At the time of the accident, the ship was in light condition and high in the water, making it impossible for Ponce to see the loading tray on the dock and requiring Ponce to rely on a flag-man to retrieve the loading tray.
12. To aid the Court in explaining the sequence of events, the Plaintiffs created a computer animation of the incident. The Plaintiffs' liability expert, Eustis John Faulk, confirmed that the animation was to scale based upon the vessel's plans, witness testimony, Houston Police Department reports, and the Coroner's reports. Mr. Faulk testified that he viewed the animation and that it reasonably and accurately portrays the accident as he believed it occurred. The Court recognizes Eustis John Faulk, Plaintiffs' liability expert, as a properly qualified expert in longshore operations and cargo safety pursuant to Rule 702 of the Federal Rules of Evidence. The Court finds Mr. Faulk's testimony credible and unbiased as to the sequence of events and cause of the accident. Despite the Defendants' well presented objections to the contrary, the Court also finds that the computer animated recreation of the sequence of events is to scale and an accurate depiction of the incident based upon the evidence. The Court finds it was not improperly inflammatory and that its probative value clearly outweighs any improperly prejudicial effect.
13. Mr. Faulk testified that while the cargo boom was swung-out over the dock, the crane hook and load were out of Ponce's view, requiring him to entirely rely upon a flag-man, who was located on the dock for directing and guiding the load. Due to the height of the vessel above the dock, the flag-man positioned himself on the dock in clear view so that Ponce could see his hand signals. As Ponce swung the boom over the dock and lowered the cargo hook to retrieve the loading tray, the boom's hoist wire slacked. Mr. Faulk testified that the cargo boom was supposed to be equipped with wire runner guides to hold the wire runner alongside the edge of the boom to prevent it from sagging when there is no tension. The vessel's plans also indicate there should be a wire runner guide on the cargo boom. Unbeknownst to Ponce and the stevedore, the cargo boom was missing a wire runner guide, which had corroded off and never been repaired or replaced, which allowed the hoist wire to excessively sag and become hung-up on a make-shift "step" welded to the starboard side forward winch housing located directly below the boom. The boom and winch were behind Ponce and not in his direct view or line of sight. Richard Legrand, Ponce's supervisor, testified that in taking signals *886 from the flag-man and subsequently watching the load in front of him while swinging the boom over to the starboard or on-shore side of the vessel, the boom was "sloppy" and required Ponce to correct the swinging. This required his full concentration. As Ponce lowered the tray to the dock, the hoisting wire became excessively slack. Ponce, however, did not see that the unrestrained hoist wire had become hung on the winch "step" behind him. This was expressly confirmed by the testimony of eyewitness Mr. Faulk and Mr. Legrand.
14. Once the loading tray cleared the starboard side of the vessel, it was in clear view of Ponce and he took control of its movement over Hatch No. 2 as he was trained and is the customary practice by longshoremen. Specifically, Mr. Faulk and Mr. Legrand testified, and the Court believes, that a longshoreman must focus on the load at all times when it is in clear view. To do otherwise would be a dereliction of his duties to those in the hold. The witness testimony establishes that once Ponce centered the loading tray over Hatch No. 2, he lowered the tray down into the hatch so that the longshoremen working inside the hatch could load it with the steel cargo. From his position at the controls, Ponce could see the area in Hatch No. 2 where the loading tray was to be landed and loaded by the longshoremen working in the hatch. The Court finds Mr. Faulk's and Mr. Legrand's testimony credible that while the tray was being loaded in Hatch No. 2, Ponce, as he was trained and is customary practice by longshoreman, continued to watch the tray and cargo hook. Additionally, the Court finds persuasive Mr. Legrand's testimony that Ponce was an experienced longshoreman and was not in any way at fault for not looking around at his surroundings while the cargo of steel was being loaded onto the tray inside Hatch No. 2.
15. Once the longshoremen completed loading the tray with cargo, they signaled Ponce to lift the tray of cargo from the hatch. As Ponce hoisted the loaded tray from Hatch No. 2, he focused on the load. However, when the wire hoist line became taught with the weight of the load, the wire came free from where it had snagged on the "step." As a result, while standing at the controls, Ponce was caught directly in the bight of the wire. The Court finds credible and accepts Mr. Faulk's testimony that the missing wire runner guide directly and completely caused Ponce's untimely death and that there was no operational reason whatsoever for the cargo boom to not have a wire runner guide. The Court also finds credible Mr. Faulk's testimony that Ponce would not have noticed the missing wire runner guide or the snagged wire runner. The missing guide constitutes negligence on the part of the vessel and Defendants.
16. The testimony of another eye witness to the accident, Rissell Mendoza, confirmed that when the hoist wire came free from the "step," Ponce was struck in his right side and was suddenly and violently thrown approximately ten (10) feet in the air and fifteen (15) feet over to the far port side of the mast house. This testimony is supported by the Houston Police Department and coroner's reports and photographs. (Exs. 1 and 50). The Court finds that the initial blows experienced by Ponce were not fatal and he survived for a few seconds, both on the ground and in the air, prior to succumbing to his injuries.
17. In stark contrast to Plaintiffs' liability expert, who the Court notes testified on behalf of a plaintiff in a personal injury case for the first time in his extensive professional career, the Defendants' paid liability expert, Dean Harrison is a regular in this Court on behalf of defendants in personal injury cases. Although the Court *887 likes and admires Mr. Harrison, having know him for over 30 years, and almost always appreciates Mr. Harrison's thoughtful, professional and insightful assistance, the Court does not find Mr. Harrison's testimony convincing or helpful regarding the precise cause of this particular accident. The Court finds Mr. Harrison's testimony that Ponce should have seen the snagged wire runner and was completely responsible for his own death as unpersuasive in light of the rest and residue of the witness testimony and evidence. Moreover, Defendants' opening statements promised evidence that mere was an operational reason for the missing wire runner guide. The Court finds that Defendants completely failed to establish any operational reason for the missing wire runner guide either through evidence or witness testimony. In fact, Defendants' liability expert bluntly conceded the same. In sum, the Defendants' alleged version of events, in which they implicate Ponce, are unpersuasive. Therefore, the Court finds that there was no operational reason for the missing wire runner guide and that the Defendants failed to exercise "ordinary care under the circumstances to have the ship and its equipment in such condition that an expert and experienced stevedore [would] be able by the exercise of reasonable care to carry on its cargo operations with reasonable safety." Scindia, 451 U.S. at 167, 101 S.Ct. at 1622. The Court finds the vessel and Defendants jointly, severally and completely liable for Decedent's death and the consequent damages; the Court finds no liability on the part of Decedent.
Conscious Pain and Suffering Damages
18. The injuries Ponce sustained after being struck by the hoisting wire were horrific. Ponce, a 247-pound man, was caught in the bight of the steel hoisting wire that struck him with tremendous force.
19. The Court recognizes Plaintiffs' forensic pathologist, Dr. Joseph I. Cohen, as an expert in the field of forensic pathology pursuant to Rule 702 of the Federal Rules of Evidence. Dr. Cohen testified that he performs autopsies on a daily basis to certify death certificates. Dr. Cohen testified that he has performed over 4000 autopsies in the past 15 years. Dr. Cohen reviewed post-death photographs of Ponce, the Harris County Police Department's investigative reports, the Harris County medical examiner's autopsy report and investigative report, diagrams of the autopsy, and the reports of John Faulk and Dr. Paul Radelat. Based on his extensive review of the, documents, his education, and experience, Dr. Cohen concluded that within reasonable medical probability Ponce lived for approximately one second to one second and a half. Dr. Cohen confirmed that when Ponce was struck by the hoisting wire in the right side of his torso he would have felt severe and immediate pain. Dr, Cohen further testified that the blow to Ponce's right torso fractured his ribs, bruised his right lung and caused other internal injuries that were not necessarily life threatening, and that Ponce would have been aware of his impending doom.
20. Defendants' pathology expert, Dr. Paul Radelat, who this Court recognizes as an expert in the field of anatomical-clinical pathology pursuant to Rule 702, testified that Ponce lived for less than one-tenth of a second after being struck by the hoisting wire. Dr. Radelat bases his opinion on the assumption that Ponce was struck in the right side of his skull and fell from a drum by the controls to the deck of the ship. The Court finds Dr. Radelat's testimony, unpersuasive based on the evidence, photographs of Ponce taken immediately after the accident, and the witness testimony. (Exs. 1 and 50). Moreover, Dr. Radelat agreed that if Ponce was thrown approximately 10 feet in the air and 30 feet from *888 the controls, Ponce would have lived longer than one-tenth of a second.
21. The Court finds Dr. Cohen's testimony reliable and credible regarding the amount of time Ponce survived prior to his death. Moreover, the Court finds that based on the evidence introduced in this case and the witness testimony; Ponce was struck in the right side of his torso and thrown in the air approximately 10 feet and landed 30 feet from where he was initially struck by the hoisting wire. Based on the foregoing, the Court finds that Ponce lived approximately one and a half seconds from the time he was struck by the hoisting wire until the time of his death.
Economic Damages
22. The Court recognizes Dr. Kenneth G. McCoin, Plaintiffs' economist, as an expert in the field of forensic economics pursuant to Rule 702 of the Federal Rules of Evidence. The Court finds, based upon the testimony of Dr. McCoin, the standards of Culver II and its progeny, and the evidence, that Plaintiffs have sustained past and future loss of support, inclusive of past and future wages, fringe benefits, and household services. See Culver v. Slater Boat Co., 722 F.2d 114 (5th Cir.1983).
23. According to Dr. McCoin's testimony, Ponce earned an average of $29,820 per year over the past five years, excluding 2003 for an unrelated injury he sustained. Dr. McCoin calculated Ponce's work-life expectancy at 8.0 years and fringe benefits (unemployment insurance, workers' compensation insurance, etc.) at 3%. Defendants' economist, Dr. James Yeager, who this Court also recognizes as an expert in the field of forensic economics pursuant to Rule 702 of the Federal Rules of Civil Evidence, calculated Ponce's average earning capacity at $29,153, and his expectancy at 8.02 years.
24. Based on Ponce's education, Dr. McCoin testified that Ponce's probability of work through his work-life expectancy is about 68%. Dr. McCoin deducted 7.65% from Ponce's earnings for social security and 0% for federal income tax given Ponce's standard deductions at his level of income. In determining Ponce's total economic loss, Dr. McCoin testified that Ponce consumed only 28% of his income for personal use, i.e. food, clothing, entertainment, transportation, etc., or approximately $9578 per year. Dr. McCoin testified that Ponce had approximately $14,000 net per year in support available to his survivors, which yields a past economic loss in the amount of $15,026, and a future economic loss of $154,439, for a total economic loss in the amount of $169,465. This is the total' amount available to all survivors in compensation of their lost, support. Dr. Yeager agreed that his calculation was very close to Dr. McCoin's based on Ponce's personal consumption of 27%.
25: Dr. McCoin further testified that a separate calculation is made to determine Ponce's value for household services. Dr. McCoin testified that he calculated Ponce's loss of household services at $54,000.
26. Dr. McCoin testified that based upon the Department of Agriculture study pertaining to the cost of raising children, it would cost around $XXXX-XXXX per year per child. Given the ages of the two grandchildren, who lived with Decedent, Dr. McCoin testified that it would cost approximately $80,000 to raise a child from age 7 to 18, and $60,000 to raise a child from age 11 to 18.
(1) Estate of Abelino Ponce
27. The Court finds that the Estate of Abelino Ponce is entitled to past and future economic loss and funeral expenses. The funeral bill for Ponce was submitted for payment and never paid by Ponce's employer. The family also could not afford to pay the bill and it remains unpaid. *889 The Court finds that the funeral expenses incurred by the. Estate are $18,849.59.
(2) Paula Gomez Ponce
28. The Court finds that Paula Gomez Ponce, Ponce's mother, has depended upon Ponce for support and services since her husband's death in the late 1980s. Ponce traveled to Reynosa, Mexico every two or three weeks to care for his mother and her house. Ponce claimed Paula Ponce as a dependent on his federal tax returns and was his mother's sole financial support. The Court finds the witness testimony credible and the evidence supports that Paula Gomez Ponce was financially dependent on Ponce for her support.
(3) Abel Ponce
29. The Court finds the witness testimony and evidence establishes that Abel Ponce, Ponce's adult child, was given nominal support and services from his father.
(4) Naomi Ponce and Candaleria Martinez
30. The Court finds that Naomi Ponce and Candaleria Martinez, Ponce's daughters, were financially dependent on and supported by Ponce. Naomi Ponce and her sister, Candaleria, testified that they. received approximately $450 per month from Ponce prior to his death. The money given to Naomi and Candaleria by Ponce was used to pay rent and buy groceries. The Court also finds that Ponce provided household services to Naomi and Candaleria.
(5) Jose Ponce
31. The Court finds that Jose Ponce, one of Ponce's adult sons, received nominal support and services from Ponce. Jose testified that he received approximately $150 every two weeks from Ponce for support.
(6) Arthur Ponce
32. The Court finds that Arthur Ponce, one of Ponce's sons, received some support and services from Ponce. The Court finds the testimony of Arthur Ponce credible and that he received money from Ponce for down payments on a car and house and that Ponce cared for him when he was unemployed due to medical complications. The Court also finds that Ponce performed services for Arthur by working on his car and around the house.
(7) Joel Eugene Ponce and Abel Rene Ponce
33. The Court finds that Joel Eugene Ponce and Abel Rene Ponce, Ponce's grandsons, were financially dependent upon Ponce for their support. The witness testimony and evidence establishes that Ponce adopted Joel and Abel as his own sons, and claimed them as dependents on his tax returns. The Court finds the testimony of Naomi Ponce and Arthur Ponce credible that Joel and Abel received substantial financial support from Ponce and were Ponce's adopted children. It's also worth noting that Joel and Abel never knew their biological fathers and that Ponce gave his grandchildren his name and acted as their father.
Non-Economic Damages
34. The Plaintiffs' non-economic losses are significant. The Court finds that the Ponces were a close family that shared in the love, comfort and enjoyment of Abelino Ponce. He was an ever-present, largerthan-life father and father figure to the entire family. In describing their father on the witness stand, Arthur, Jose., and Naomi radiated the love and affection that Ponce had for his family and his place as the father-figure. The emotional testimony brought Ponce to life in the courtroom, and even after over sixteen years on the bench, the Court was deeply moved by the *890 sincerity and poignancy of it. Naomi intimately described the love Ponce had for Joel and Abel, his two adopted grandsons, and how Ponce cared for his grandsons as his own children. Naomi also described how Ponce always put the family first and provided emotional support for his children through the good and bad times. Arthur described how his father's death has impacted the family and brought them closer together, albeit with an enormous hole in the middle of it. Jose had a slightly different story, having only recently found his biological father, but described how Ponce had visited him on numerous occasions, provided financial and emotional support during difficult times, and introduced him into the Ponce family with loving arms. The Plaintiffs' testimony truly portrayed the grief, loneliness, and stress the family has endured since the untimely death of their father. Given the suddenness of Ponce's death, the Court finds that the witness testimony and evidence warrants a substantial award for non-economic damages, as the Plaintiffs are entitled to recover for loss of consortium and/or society.
Prejudgment Interest
35. Pursuant to maritime law, "the awarding of prejudgment interest is the rule rather than the exception, and, in practice, well-nigh automatic." Cameron v. U.S., 135 F.Supp.2d 775, 782 (S.D.Tex.2001)(citing Reeled Tubing, Inc. v. M/V Chad G, 794 F.2d 1026, 1028 (5th Cir.1986)). The district court has no discretion to deny prejudgment interest unless peculiar circumstances make the award of interest inequitable. Noritake Co. v. M/V Hellenic Champion, 627 F.2d 724, 729 (5th Cir.1980). In this Circuit, prejudgment interest is to be awarded from the date of the casualty to ensure the plaintiff is compensated in full. Probo II London v. M/V Isla Santay, 92 F.3d 361 n. 2 (5th cir.1996); King Fisher Marine Serv., Inc. v. NP Sunbonnet, 724 F.2d 1181, 1187 (5th Cir.1984).
36. The Court also has broad discretion in setting the rate of prejudgment interest. See Reeled Tubing, 794 F.2d at 1029. In setting the rate of prejudgment interest the district court may look to reasonable guideposts, including the interests rate set forth in 28 U.S.C. § 1961 for judgments. Id.; see also Cameron, 135 F.Supp.2d at 781. The Court finds that the most equitable rate of prejudgment interest would be 4.96%. Accordingly, the Court finds and awards prejudgment interest at the rate of 4.96% per annum on all damages accrued through the entry of Judgment.
II.
CONCLUSIONS OF LAW
1. The Court has jurisdiction over the subject matter of this dispute and over the parties. All parties and claims are properly before this Court and venue is uncontested.
2. The parties stipulated that Abelino Ponce was a longshoreman and may recover for negligence against Defendants pursuant to § 905(b) of the Longshore and Harbor Workers' Compensation Act ("LHWCA"). 33 U.S.C. § 905(b).
3. The Court concludes that Abelino Ponce is a covered employee under the LHWCA.
4. Pursuant to § 905(b) of the LHWCA, the vessel and its owner are liable: (1) if the vessel owner fails to warn on "turning over" the ship of hidden defects of which it should have known; (2) for injuries caused by hazards under the "active control" of the ship; or (3) if the vessel owner fails to "intervene" in the stevedore's operations when it has actual knowledge both of the hazard and that the *891 stevedore, in the exercise of obviously improvident judgment, means to work on in the face of it and therefore cannot be relied on to remedy it. Scindia Steam, 451 U.S. at 167, 101 S.Ct. at 1622 (1981); Randolph v. Laeisz, 896 F.2d 964, 970 (5th Cir.1990).
5. Under the "turnover duty," the shipowner must "at least [exercise] ordinary care under the circumstances to have the ship and its equipment in such condition that an expert and experienced stevedore will be able by the exercise of reasonable care to carry on its cargo operations with reasonable safety to persons and property." Scindia, 451 U.S. at 166-67, 101 S.Ct. at 1622. As a corollary to the shipowner's turnover duty, the shipowner must also "warn the stevedore of any hazards on the ship or with respect to its equipment that are known to the vessel or should be known to it in the exercise of reasonable care, that would likely be encountered by the stevedore and would not be obvious to or anticipated by him if reasonably competent in the performance of his work." Id. at 167, 101 S.Ct. 1614 (emphasis added); Theriot v. Bay Drilling Corp., 783 F.2d 527, 535 (5th Cir.1986); see also Lincoln v. Reksten Mgmt., 354 F.3d 262, 266, 2004 AMC 179 (4th Cir.2003). "The shipowner thus has a duty with respect to the condition of the ship's gear, equipment, tools and work space to be used in the stevedoring operations; and if he fails to at least warn the stevedore of hidden danger which would have been known to him in the exercise of reasonable care, he has breached his duty and is liable if his negligence causes injury to a longshoreman." Pluyer v. Mitsui O.S.K. Lines, Ltd., 664 F.2d 1243, 1247, 1984 AMC 534 (5th Cir.1982); Harris v. Flota Mercante Grancolombiana, S.A., 730 F.2d 296, 299 (5th Cir.1984)(same); see also Taliercio v. Compania Empressa Lineas Argentina, 761 F.2d 126, 128 (2d Cir.1985)(stating that the shipowner has a "duty to maintain the vessel in a reasonably safe condition," and must exercise due care to "avoid exposing the longshoremen to injury from equipment that is under the shipowner's control."). Moreover, if the "condition existed from the outset, the shipowner is charged with actual knowledge of the dangerous condition and has a duty to warn the stevedore and the longshoremen if the defect is hidden." See Hernandez v. M/V Rajaan, 841 F.2d 582, 586 (5th Cir.1988); Stass v. Am. Commercial Lines, Inc., 683 F.2d 120, 122 (5th Cir.1982).
6. The Court finds that the evidence clearly establishes that the Defendants failed to exercise reasonable care in maintaining, inspecting, repairing, and replacing the crane boom's wire runner guide prior to turning over the M/V ALTAIR to the stevedore and Ponce. The evidence indicates that the condition of the wire runner was noticed by the Defendants or should have been noticed and discovered by the Defendants had proper inspections and maintenance been performed prior to turning over the vessel to the stevedore. The Defendants' failure to warn the Americargo personnel, including Ponce, about the missing wire runner guide and failure to conduct proper inspections and maintenance of the wire runner guide constitutes negligence and was the proximate cause of Ponce's death. Such negligence was a legal and factual cause of the Plaintiffs' damages. Therefore, the Court finds that the Defendants breached their "turn over" duty to "warn the stevedore of any hazards on the ship or with respect to its equipment that are known to the vessel or should be known to it in the exercise of reasonable care, that would likely be encountered by the stevedore and would not be obvious to or anticipated by him if reasonably competent in the performance *892 of his work." See Scindia Steam, 451 U.S. at 167, 101 S.Ct. at 1622.
7. The Court also finds that the Defendants further breached their "turn over" duty by failing to exercise reasonable care in delivering to the stevedore and Ponce a safe ship with respect to its gear, equipment, tools, and work space to be used in the stevedoring operations prior to turning over, the ship. See Pluyer 664 F.2d at 1247; Harris 730 F.2d at 299. The evidence establishes that the missing wire runner guide was unknown to the stevedores and Ponce.
8. The Court finds that the crane boom's missing wire runner guide was not an open and obvious condition to Ponce.
9. The Court finds that in addition to breaching their "turnover" duty, the Defendants breached their "active control" duty. Scindia Steam, 451 U.S. at 166-67, 101 S.Ct. 1614. The shipowner's active control duty extends to injuries caused by hazards or equipment under the active control of the ship. See Pimental v. LTD Canadian Pacific Bul, 965 F.2d 13, 16 (5th Cir.1992). Whether a condition falls under the guise of the vessel's active control duty in situations involving the ship itself, the condition of its gear and/or equipment becomes entirely relevant and, in this case, determinative. See Futo v. Lykes Bros. Steamship Co., 742 F.2d 209, 215 (5th Cir.1984) ("The shipowner, after all, is generally primarily responsible for repairing his own ship, its equipment, or gear, and usually stands to gain the most by its proper maintenance . . . [and] stands in the best position to appreciate the danger caused by a defect in the ship itself, its gear, or equipment."). The witness testimony and evidence clearly establishes that the vessel's cargo boom was missing a wire runner guide designed to keep the wire running along the underside of the boom and prevent the wire from becoming slack and hanging or snagging on vessel appurtenances. Both Plaintiffs' and Defendants' liability experts confirmed that the purpose of the wire runner guide is to prevent the wire from hanging or snagging on cargo, equipment and ship's gear during cargo operations. Unlike the turnover duty, which generally applies to hidden defects, the vessel cannot rely on the stevedore's expertise to repair or replace a missing wire runner guide on a vessel's cargo boom. See Woodruff v. United States, 710 F.2d 128 (4th Cir.1983). The Court finds that had the cargo boom been fitted with a wire runner guide as per the vessel's plans and uncontroverted witness testimony, the accident would have been prevented. The Court concludes that the Defendants maintained control over the cargo boom and are liable to Plaintiffs.
10. The Court concludes that the third Scindia duty, the "duty to intervene" was also clearly violated by the Defendants. Again, the evidence establishes that the missing wire runner guide was observable by the vessel's crew and representatives, who alone did or should have recognized the risks during cargo operations that the missing wire runner guide would present to the stevedore. The shipowner has the duty "to avoid exposing longshoremen to harm from hazards they may encounter in areas, or from equipment, under the active control of the vessel during the stevedoring operation." Scindia Steam, 451 U.S. at 167, 101 S.Ct. 1614. Additionally, the shipowner has a duty to correct a known defective condition at the commencement of the cargo operations when the defect creates an unreasonable risk of harm to the longshoremen and the shipowner knows that he cannot rely on the stevedore to protect the longshoremen from that risk. Id. at 175-76, 101 S.Ct. 1614; Lemon v. Bank Lines, Ltd., 656 F.2d 110, 115 (5th Cir.1981). The evidence and expert witness testimony *893 establishes that the lack of a wire runner guide on the cargo boom posed a hazard to Americargo's personnel and Ponce beyond that which is normally encountered by longshoremen in discharging a vessel. The lack of a wire runner guide on a cargo boom being used to discharge a vessel is not an occurrence commonly experienced by stevedores in the exercise of their profession. The Court concludes that the Defendants violated this duty and such violation caused or contributed to Ponce's untimely death.
11. The Court does not find it persuasive that Ponce contributed in any way to his death. The advisory jury, after carefully weighing the evidence and deliberating over such, found that Ponce and/or his employer were 4% responsible. Accordingly, the Court finds that Ponce's employer, Americargo, was 4% contributorily negligent for the accident, although it does not find Decedent liable. Nevertheless, Defendants are liable, jointly and severally, to Plaintiffs for their damages sustained as a result of the subject accident, including past and future loss of support, lost earnings, funeral expenses, loss of society, conscious pain and suffering, and past and future loss of services. See Edmonds v. Compagnie Generale Transatlantique, 443 U.S. 256, 271-72, 99 S.Ct. 2753, 61 L.Ed.2d 521 (1979)(stating that the shipowner is jointly and severally liable for damages not due to the longshoreman's own negligence); see also Foulk v. Donjon Marine Co., 963 F.Supp. 427, 430 (D.N.J.1997)(stating that under the rule of joint and several liability, the shipowner is liable for all of the damages even if only found one percent at fault for the longshoreman's injury). A longshoreman, such as Ponce, may recover fully from a negligent shipowner and/or operator even if: (1) the employer is partly at fault for the accident; and (2) the shipowner is otherwise barred from seeking contribution from the employer. See Edmonds, 443 U.S. at 268-270, 99 S.Ct. 2753. Therefore, the Defendants are liable for all of Plaintiffs' damages.
12. The Court concludes as a matter of law that Plaintiffs have sustained their burden of proof by a preponderance of the evidence showing that the Defendants herein breached their duty of reasonable care in their capacity as vessel owner and vessel operator pursuant to § 905(b) of the LHWCA. Therefore, the Court finds that Plaintiffs may have recovery herein and the Court will enter Judgment in the Plaintiffs' favor.
13. The Court tried the case to an advisory jury and the jury rendered the collective judgment of the community. The Court finds that the advisory jury's recommendation as to damages was largely fair and reasonable. However, the Court finds that the economic damages awarded to Ponce's survivors exceed the earnings which could have been reasonably available to them. Specifically, the jury recommended economic damages to Ponce's survivors totaling $438,250.00 while the expert testimony indicated that Ponce's lost earnings, less taxes and personal consumption, was closer to $169,465.00. In keeping with the jury's relative awards to each survivor, the Court is awarding 39% of the jury's recommendation ($169,465.00 being 39% of $438,250.00) to each survivor, pro rata. The Court also finds that the jury's awards for loss of services are excessive. The recommended award to all Plaintiffs for loss of services was $332,500.00. This is more than six times the figure suggested by Plaintiffs' own expert. The Court finds that Dr. McCoin's estimate of $54,000.00 for loss of services is more appropriate. Accordingly, the Court is awarding 16.2% of the jury's recommendation ($54,000.00 being 16.2% of $332,500.00) to each, pro rata. The Court also finds that any recovery *894 of past and future lost earnings by the Estate of Abelino Ponce would be an impermissible double recovery. The Court therefore declines to award to Estate any damages for lost earnings. Accordingly, based on the witness testimony and evidence, the Court finds that the Estate of Abelino Ponce is entitled to past and future lost earnings and funeral expenses. The Court awards the Estate $18,849.59 for funeral expenses.
14. The Court finds that the credible expert medical testimony establishes that Ponce lived for at least one and a half seconds after being struck by the wire runner and felt severe pain prior to his death, and in reasonably probability likely was aware of his pending death. The Court finds that the jury's award of $100,000.00 for conscious pain and suffering is excessive under the circumstances. In keeping with the Fifth Circuit awards appropriately adjusted for inflation, the Court finds that $11,200.00 is a more appropriate award for Ponce's conscious pain and suffering, and so awards. See Haley v. Pan American World Airways, Inc. 746 F.2d 311 (5th Cir.1984).
15. The Court finds that Abel Ponce received some financial support and services from Ponce and awards $15,502.50 for loss of support and $4,252.50 for loss of services.
16. The Court finds that Arthur Ponce received some financial support and services from Ponce and awards $13,502.50 for loss of support and $4,252.50 for loss of services.
17. The Court finds that Jose Ponce received nominal financial support and services from Ponce and awards $6,142.50 for loss of support and $1,701.00 for loss of services.
18. The Court finds that Paula Ponce was solely dependent on Ponce for her financial support and services and awards $24,570.00 for loss of support and $6,804.00 for loss of services.
19. The Court finds that Naomi Ponce was financially dependent on Ponce for support and services and awards $30,712.50 for loss of support and $8,505.00 for loss of services.
20. The Court finds that the credible witness testimony and evidence establishes that Joel Ponce was Ponce's dependent minor child in loco parentis. The Court awards $23,887.50 for loss of support and $9,922.50 for loss of services.
21. The Court finds that Candelaria Martinez was financially dependent on Ponce for support and services and awards $30,712.50 for loss of support and $8,505.00 for loss of services.
22. The Court finds that the credible witness testimony and evidence establishes that Abel Rene Ponce was Ponce's dependent minor child in loco parentis. The Court awards $23,887.50 for loss of support and $9,922.50 for loss of services.
23. The Court concludes that Plaintiffs are entitled to recover a substantial amount for loss of companionship and society. A loss of consortium and society award is permissible in this case. See Sea-Land Servs., Inc. v. Gaudet, 414 U.S. 573, 585-91, 94 S.Ct. 806, 39 L.Ed.2d 9 (1974); Moore v. M/V Angela, 353 F.3d 376, 383 (5th Cir.2003). It is undisputed that Ponce, a longshoreman, was killed while working in the territorial waters of Texas. Although some discrepancies exist between the law governing injuries to longshoremen killed in territorial waters and persons governed by the Death on the High Seas Act or the Jones Act, the Court must apply the law as it is. See Nichols v. Petroleum Helicopters, Inc., 17 F.3d 119, 122-23 (5th Cir.1994).
24. The Court also concludes that Plaintiffs may recover for loss of companionship *895 and society, regardless of whether they are financially dependent upon Ponce. A showing of financial dependency is not a prerequisite to recover for loss of companionship and society under § 905(b) of the L HWCA. See Randall v. Chevron, U.S.A., 13 F.3d 888 (5th Cir.1994); Skid-more v. Grueninger, 506 F.2d 716 (5th Cir.1975) (permitting an adult, nori-dependent daughter to recover for loss of her mother's society); Dennis v. Cent. Gulf S.S. Corp., 453 F.2d 137 (5th Cir.1972) (same).
25. In awarding permissible, subjective damages, a trial court's assessment of damages is reviewed for clear error. Sosa v. M/V Lago Izabal, 736 F.2d 1028, 1035 (5th Cir.1984). An award is excessive only if it is greater than the maximum amount the trier of fact could have properly awarded. Id. at 1035. Each award is reviewed on its own facts. Winbourne v. Eastern Airlines, Inc., 758 F.2d 1016, 1018 (5th Cir.1984). However, comparison of damage awards from similar cases is helpful. See Wheat v. United States, 860 F.2d 1256, 1259-60 (5th Cir.1988).
26. Based on the witness testimony and evidence, Ponce was a loving son and father to his children and his adapted grandchildren. The witness testimony and evidence also establishes that Ponce was the presiding father and father figure of a remarkably close-knit, extended family. The Court concludes that the following amounts should be awarded to Ponce's mother, adult children, and adopted grandchildren for loss of consortium and society:
Abel Ponce $ 65,625.00
Arthur Ponce $ 65,625.00
Jose Ponce $ 26,250.00
Paula Ponce $105,000.00
Naomi Ponce $131,250.00
Joel Ponce $450,000.00
Candelaria Martinez $131,250.00
Abel Renee Ponce $450,000.00
The amounts awarded are within the parameters of this Circuit's maximum recovery rule for non-pecuniary damages, and largely in keeping with the jury's advisory verdict, except for the grandchildren adopted as children.
27. Plaintiffs are entitled to pre-judgment interest under general maritime law at a rate of 4.96% per annum.
28. To the extent any Finding of Fact constitutes a Conclusion of Law, the Court adopts it as such. To the extent any Conclusion of Law constitutes a Finding of Fact, the Court adopts it as such.
29. For the reasons set forth in the Court's Findings of Fact and Conclusions of Law, and pursuant to Rule 58 of the Federal Rules of Civil Procedure, Judgment is hereby rendered in favor of Plaintiffs on their stated claims against Defendants. Therefore, Plaintiffs, Candelaria C. Ponce as personal representative of the Estate of Abelino Ponce, Abel Ponce, Naomi Ponce, Candelaria Martinez, Joel Eugene Ponce, Abel Rene Ponce, and Paula Gomez Ponce, shall have and recover from Defendants M/V ALTAIR, her engines, boilers, tackles, apparel, etc., Scarlati Ventures, Inc., and B Navi Spa, the total amount of $1,779,832.09, plus taxable costs of court and pre-judgment interest as set forth herein, and post-judgment interest at the rate of 4.96% per annum, for which execution shall issue if not time paid. Out of said recovery, Plaintiffs shall repay the stipulated compensation lien of $7,640.29 to Intervenor Texas Mutual Insurance Company.
IT IS SO ORDERED.
NOTES
[1] The MAT ALTAIR, IMO 7813602, Call Sign 3FMD7, is a Panamanian-flag general cargo carrier of 16,235 gross tons built in 1979.
[2] Plaintiffs also attended a hearing before The Honorable Calvin Botley, U.S. Magistrate Judge, which resulted in Defendants' P & I insurer, Steamship Mutual Underwriting Association (Bermuda), issuing a Letter of Undertaking in the amount of $3,000,000.00 USD as security for the vessel's release.
[3] The Deceased's mother, Paula Gomez Ponce, is a foreign citizen residing in Reynosa, Mexico. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558591/ | 644 F.Supp. 645 (1986)
Floyd B. RHOADES, Jr. and Audrey Rhoades, Plaintiffs,
v.
William T. POWELL, et al., Defendants.
No. CV-F-85-549 REC.
United States District Court, E.D. California.
September 5, 1986.
*646 *647 *648 *649 *650 Timothy J. Buchanan, Dietrich, Glasrud & Jones, Fresno, Cal., for plaintiffs.
Marilyn Kaplan, Orrick, Herrington & Sutcliffe, San Francisco, Cal., for defendant Merrill Lynch.
Steven Shahbazian, Fresno, Cal., for defendant William T. Powell.
J. Douglas MacArthur, Crossland, Crossland, Chambers & MacArthur, Fresno, Cal., for defendant Paine Webber and C. Jordan Ball.
MEMORANDUM OF DECISION AND ORDER RE PETITION TO COMPEL ARBITRATION AND MOTION TO DISMISS
COYLE, District Judge.
Plaintiffs commenced this lawsuit in October 1985 naming as defendants William T. Powell, a stockbroker who handled plaintiffs' accounts at Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch") and later at Paine Webber, Inc. ("Paine Webber"), the managing supervisors of the Merrill Lynch and Paine Webber offices at which Powell was employed, and against the brokerage firms themselves. Plaintiffs allege that defendants' operation of the successive accounts at Merrill Lynch and Paine Webber violated section 17(a) of the Securities Act of 1933, 15 U.S.C. ง 77q(a); sections 10(b) and 15(c) of the Securities Exchange Act of 1934, 15 U.S.C. งง 78j(b) and 78o(c); Rule 10b-5 promulgated by the Securities and Exchange Commission ("SEC"), and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. งง 1961-1968. The complaint also contains pendent state claims for common law fraud, negligent misrepresentation, breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, rescission, and violation of California Corporations Code section 25401.
This matter is presently before the court on defendants' petition to compel arbitration and motion to dismiss. Following oral argument on May 12, 1986 the court placed the motions under submission. After due consideration of the written and oral arguments of the parties, the court grants the petition to compel arbitration in part and denies it in part. Because the court declines to stay the non-arbitrable claims, it also rules upon the motion to dismiss, granting the motion in part and denying it in part.
PETITION TO COMPEL ARBITRATION
Defendants Merrill Lynch and Hollis D. Anderson ("Anderson") (collectively "Merrill Lynch") petition the court to compel arbitration of all plaintiff's claims against them. Merrill Lynch further moves that this action be stayed until such arbitration is completed. Defendants Paine, Webber and Jordan Ball (collectively "Paine Webber") have filed a separate petition to compel arbitration under a separate customer agreement, but join in Merrill Lynch's legal arguments. The remaining defendant, William T. Powell, joins in the other motions to compel arbitration.
I.
In October 1982, plaintiffs opened a customer margin account with Merrill Lynch's office in Jackson, Mississippi. Defendant Powell was plaintiffs' account executive. Defendant Anderson was and is resident Vice President of Merrill Lynch's Jackson office.
Before opening their account with Merrill Lynch in October 1982, plaintiffs signed a written Customer Agreement. See Petition for Arbitration, Exhibit 1. Paragraph 11 of the agreement is an arbitration clause which reads:
*651 It is agreed that any controversy between us arising out of your business or this agreement shall be submitted to arbitration conducted under the provisions of the Constitution and Rules of the Board of Governors of the New York Stock Exchange, Inc. or pursuant to the Code of Arbitration Procedure of the National Association of Securities Dealers, Inc. as the undersigned may elect.... Arbitration must be commenced by service upon the other of a written demand for arbitration or a written notice of intention to arbitrate, therein electing the arbitration tribunal. In the event the undersigned does not make such designation within five (5) days of such demand or notice, then the undersigned authorizes you to do so on the behalf of the undersigned.
Plaintiffs moved from Mississippi to California in July 1983, and Powell left Merrill Lynch to work at Paine Webber. Plaintiffs then transferred their account to Paine Webber and executed a Client's Agreement, which contained the following arbitration clause:
15. Any controversy between us arising out of or relating to this contract or the breach thereof, shall be settled by arbitration, in accordance with the rules, then obtaining, of either the Arbitration Committee of the New York Stock Exchange, American Stock Exchange, National Association of Securities Dealers or where appropriate, Chicago Board Option Exchange of Commodities Futures Trading Commission, as I may elect. I authorize you if I do not make such election, by registered mail addressed to you at your main office within fifteen (15) days after receipt of notification from you requesting such election, to make such election in my behalf. Any arbitration hereunder shall be before at least three arbitrators and the award of the arbitrators, or of a majority of them, shall be final, and judgment upon the award rendered may be entered in any court, state or federal, having jurisdiction.
See Petition for Order Compelling Arbitration, Exhibit A.
Defendants have requested that plaintiffs submit their disputes to arbitration as provided in these arbitration provisions. Because plaintiffs have refused to do so, Merrill Lynch and Paine Webber each petition the court to enforce the arbitration clauses.
II.
Statutory authorization for the enforcement of arbitration clauses is found in section 2 of the Federal Arbitration Act, 9 U.S.C. section 2, which provides in part:
A written provision in any ... contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
The Arbitration Act evinces a strong national policy favoring arbitration, and any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. See Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983). Arbitration agreements are enforceable absent a basis for revocation of the contractual agreement or in cases involving certain specifically exempted federal claims. See Dean Witter Reynolds v. Byrd, 470 U.S. 213, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985).
A. Pendent State Law Claims.
Claims 6-10 are pendent state claims and arise out of the same basic facts upon which the federal securities violations are based. Defendants assert that these claims are subject to arbitration because they arise out of the customer agreements, an argument that plaintiffs do not dispute.
*652 This issue is controlled by Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985). There, a dentist sold his practice and invested the proceeds in securities through a broker-dealer. The value of the account declined substantially, and the investor filed a complaint against the broker-dealer for violations of federal securities laws and various state law provisions. The investor had signed an agreement to arbitrate any controversy arising out of the securities account, and accordingly, the broker/defendant filed a motion to sever the pendent state claims, to compel their arbitration, and to stay arbitration of those claims pending resolution of the federal court action. The district court denied the motion in its entirety and the Ninth Circuit affirmed.
The Supreme Court reversed, and held that
[T]he Arbitration Act requires district courts to compel arbitration of pendent arbitrable claims when one of the parties files a motion to compel, even where the result would be the possibly inefficient maintenance of separate proceedings in different forums.
470 U.S. at 217, 105 S.Ct. at 1241, 84 L.Ed.2d at 163. (emphasis added). Thus, Byrd mandates this court to require arbitration of the pendent state claims, regardless of its disposition on the federal claims.
Plaintiffs offer no formal written opposition to arbitration of the state claims; indeed, they state that "as it pertains to plaintiffs pendent state claims under California law, the petition to compel arbitration likely should be granted." Plaintiffs' Opposition Memo, page 1. Plaintiffs then say that because the complaint contains federal claims that are not subject to arbitration, "the petitions to arbitration [sic] the federal claims must be denied." Id. Plaintiffs may be arguing by this cryptic passage that because the federal claims are non-arbitrable, the entire petition should be denied. That contention would be directly contrary to the holding in Byrd. More likely, plaintiffs are being equivocal on the state claims and not conceding the federal claims.
Plaintiffs' attorney, Timothy Buchanan, explains his position somewhat in a letter dated April 30, 1986 and directed to Marilyn Kaplan, counsel for defendant Merrill Lynch. Paragraphs two and three of this letter read:
Ms. Kaplan raised the legitimate point that plaintiffs' memorandum of points and authorities in opposition to the petition to compel arbitration equivocated on the arbitrability of the state claims, stating the claims `likely' would be subject to arbitration. I apologize for this unclear language, but at the time felt an outright concession of the point was unwarranted because I was still examining various possible arguments on the issue at the time of the filing deadline for my opposition papers.
I am prepared to argue at the May 12 hearing, however, that the arbitrability of the state claims is dependent upon Judge Coyle's ruling on the arbitrability of the federal claims. Specifically, as discussed in plaintiffs' opposition to the motion to dismiss, plaintiffs are seeking, among other things, rescission of the customer agreements under ง 29 of the Securities Exchange Act of 1934. Rescission of the customer agreements, of course, affects the enforceability of the arbitration clauses themselves. If, as plaintiffs intend to argue, the entitlement to rescission on this federal claim is non-arbitrable, plaintiffs are entitled to litigate the rescission issue in federal court before any order for arbitration of the state claims can issue. Moreover, as a pragmatic concern, Judge Coyle's ruling upon the petition to compel arbitration will necessarily determine the scope of issues arbitrated. Accordingly, plaintiffs do not concede the arbitrability of the pendent state claims and will await Judge Coyle's ruling before taking any steps to pursue arbitration.
But plaintiffs do not raise rescission as a defense to arbitration in their written opposition or elsewhere in their papers. This *653 argument appears only in the letter to Ms. Kaplan, and was again made at oral argument. Nevertheless, the court will consider plaintiffs' rescission argument as if fully presented in their opposition papers. The argument is still unavailing.
In Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) ("Prima Paint"), an integrated contract between the parties included an arbitration clause covering "[a]ny controversy or claim arising out of or relating to this Agreement." Prima Paint sought to resist arbitration, claiming that the entire contract was induced by fraud. Flood & Conklin argued that the issue of fraudulent inducement was for the arbitrators to decide. The Court agreed, noting that section 4 of the United States Arbitration Act of 1925, 9 U.S.C. ง 4, provides that a federal court must order arbitration "once it is satisfied that `the making of the agreement for arbitration or the failure to comply [with the arbitration agreement] is not in issue.'" Id. at 403, 87 S.Ct. at 1805, quoting 9 U.S.C. ง 4. The Court reasoned that
[I]f the claim is fraud in the inducement of the arbitration clause itself โ an issue which goes to the `making' of the agreement to arbitrate โ the federal court may proceed to adjudicate it. But the statutory language does not permit the federal court to consider claims of fraud in the inducement of the contract generally. Section 4 does not expressly relate to situations like the present in which a stay is sought of a federal action in order that arbitration may proceed. But it is inconceivable that Congress intended the rule to differ depending upon which party to the arbitration agreement first invokes the assistance of a federal court. We hold, therefore, that in passing upon a ง 3 application for a stay while the parties arbitrate, a federal court may consider only issues relating to the making and performance of the agreement to arbitrate.
Id. at 403-404, 87 S.Ct. at 1805-1806, 18 L.Ed.2d at 1277. The Prima Paint holding can be reduced to the fairly simple proposition that a challenge based on fraud in the inducement of the whole contract (including the arbitration clause) is for the arbitrator to decide, while a challenge based on fraud in the inducement of the arbitration clause only is for the court to decide. See Matterhorn, Inc. v. NCR Corp., 763 F.2d 866, 868 (7th Cir.1985). See also S.A. Mineracao Da Trinidade-Samitri v. Utah International, Inc., 745 F.2d 190, 195 (2d Cir.1984) (claims of fraud in inducement of contract are arbitrable); Life of America Insurance Co. v. Aetna Life Insurance Co., 744 F.2d 409, 413 (5th Cir.1984) ("Absent allegations of fraud in the inducement of the arbitration clause itself arbitration must proceed when an arbitration clause on its face appears broad enough to encompass the parties' claims"). The alleged fraud in the inducement must apply solely to the arbitration clause. See Schacht v. Beacon Insurance Co., 742 F.2d 386, 390 (7th Cir.1984), else the issue is one for the arbitrators to decide.
The Prima Paint doctrine is not limited, however, to rescission based on fraudulent inducement, but extends to all challenges to the making of a contract: "The teaching of Prima Paint is that a federal court must not remove from the arbitrators consideration of a substantive challenge to a contract unless there has been an independent challenge to the making of the arbitration clause itself. The basis of the underlying challenge to the contract does not alter the [Prima Paint] principle." Unionmutual Stock Life Insurance v. Beneficial Life, 774 F.2d 524, 529 (1st Cir.1985) (frustration of purpose as ground for rescission); Hull v. Norcom, 750 F.2d 1547, 1549-50 (11th Cir.), reh'g denied, 757 F.2d 287 (1985) (challenge based on lack of mutuality of arbitration clause); Merrill Lynch v. Haydu, 637 F.2d 391 (5th Cir. 1981) (duress and unconscionability to be decided by arbitrator).
Thus, applying Prima Paint to this case, plaintiffs cannot avoid arbitration through rescission of the entire agreement, unless the arbitration clause is not broad *654 enough to encompass arbitration of claims of invalidity of the contract. In this regard, the arbitration clauses are sufficiently broad. Paragraph 11 of the customer agreement between Merrill Lynch and plaintiffs reads:
It is agreed that any controversy between us arising out of your business or this agreement shall be subject to arbitration. ...
Similarly, paragraph 15 of the Customer Agreement between Paine Webber and plaintiffs provides that "[a]ny controversy between us arising out of or relating to this contract or the breach thereof shall be settled by arbitration." The "arising out of" language is broad enough to include disputes over validity of the contract itself. See Prima Paint, 388 U.S. at 406, 87 S.Ct. at 1807. See also Mediterranean Enterprises, Inc. v. Ssangyong, 708 F.2d 1458, 1463-64 (9th Cir.1983). Accordingly, a claim for rescission of the customer agreement under section 29(b) would not prevent arbitration; under Prima Paint, plaintiffs would have to challenge the validity of the arbitration clause alone.
Plaintiffs do not indicate the basis of their proposed rescission claim, as this argument appears only in the letter to Marilyn Kaplan dated April 30. But there, Mr. Buchanan very explicitly states that "plaintiffs are seeking, among other things, rescission of the customer agreements under ง 29 of the Securities Exchange Act of 1934." But plaintiffs' request to amend the complaint to assert a rescission claim under section 29 is directed to the customer agreements, not the arbitration clauses alone. See infra at 661-665. Thus, the court's decision to allow plaintiffs to allege such a claim has no bearing on the arbitrability of the state claims. Under Prima Paint, Mr. Buchanan is absolutely incorrect in asserting that "Rescission of the customer agreements, of course, affects the enforceability of the arbitration clauses themselves," because the arbitration clause is severable from the rest of the customer agreement. Under Prima Paint, entitlement to rescission of the entire customer agreement must be submitted to arbitration; it cannot be submitted to the court once the court has identified a broad arbitration clause. Hence, plaintiffs' rescission argument will not prevent arbitration of the state causes of action and the court compels their arbitration.
B. Sanctions.
Merrill Lynch seeks sanctions under Rule 11 for plaintiffs' refusal to arbitrate their state law claims and their institution of this lawsuit despite requests by Merrill Lynch to go to arbitration. Paine Webber does not join in the motion for sanctions, but does not oppose it.
Rule 11, Federal Rules of Civil Procedure reads, in pertinent part:
The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable enquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.... If a pleading, motion, or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, shall impose upon the person who signed it, a represented party, or both, an appropriate sanction....
Fed.R.Civ.P. 11. The gist of defendants' motion for sanctions is that plaintiffs refused to submit the state claims to arbitration despite the Byrd decision, and that plaintiffs refused to dismiss or replead the federal claims, thereby forcing defendants to bring the instant motion. The basis for defendants' sanction request is presented in several pieces of correspondence between respective counsel, and in the affidavits of Marilyn Kaplan and Timothy Buchanan.
Having reviewed the correspondence and the declarations, the court concludes that *655 Rule 11 sanctions are not warranted in this case. Plaintiffs' refusal to dismiss the federal securities claims and replead the RICO claim cannot be said to be unwarranted considering the state of existing law. See infra, page 673. The submitted correspondence certainly does not reflect well on plaintiff's counsel, who should have been well beyond "examining" various arguments at the time his opposition papers were due. But counsel was not incorrect in opposing arbitration of the federal claims, and there is a dispute, or at least a misunderstanding, as to whether Merrill Lynch initially proposed arbitration of the state claims apart from the federal claims. Plaintiffs' failure to submit to arbitration of the state claims alone, when defendants' intent became clear, does not deserve sanctioning because at the time plaintiffs had plausible defenses to arbitration. Counsel's failure to properly argue those defenses does not in the court's opinion require imposition of sanctions.
C. Federal Securities Claims.
Plaintiffs' first four claims arise out of federal securities laws. Claims one and two are based on section 15(c) of the Securities Exchange Act of 1934 ("1934 Act"), 15 U.S.C. ง 78o(c), and claim three is based on section 10(b) of the 1934 Act, 15 U.S.C. ง 78j and SEC Rule 10b-5. Claim four arises under section 17(a) of the Securities Act of 1933 ("1933 Act"), 15 U.S.C. ง 77q(a). Defendants argue that the better reasoned view, and the trend in authority, requires arbitration of these claims. Plaintiffs contend that federal policy favoring arbitration does not override the importance of providing a judicial forum for securities claims, a view which the Ninth Circuit recently has adopted.[1]
1. Arbitrability of 1934 Act Claims.
In Conover v. Dean Witter Reynolds, Inc., 794 F.2d 520 (9th Cir.1986), the Ninth Circuit held that claims arising under section 10(b) of the 1934 Act and Rule 10b-5 are not subject to arbitration. The court reasoned that Congress' intent to prohibit arbitration of these claims, as evinced by the text, as well as the legislative and judicial history of the 1934 Act, prohibited arbitration of such claims despite strong federal policy favoring arbitration. In so ruling, the Ninth Circuit formally joined other circuits holding that 1934 Act claims are not subject to arbitration, see, e.g., McMahon v. Shearson/American Express, 788 F.2d 94 (2d Cir.1986), and halted a trend among district courts holding the opposite. See, e.g., Sacks v. Dean Witter Reynolds, Inc., 627 F.Supp. 377, [current] Fed.Sec.L.Rep. (CCH) ถ 92,429 (C.D.Cal. November 18, 1985).
Although Conover did not touch upon claims arising under section 15(c) of the 1934 Act, the court's reasoning equally compels denying arbitration of those claims. Section 15(c) creates, as does section 10(b), at most an implied private right of action. Examining the legislative and judicial history of the 1934 Act, the Conover court emphasized that "Congress expressly recognized the non-arbitrable nature *656 of disputes between brokers and customers" in its 1975 revisions to the 1934 Act. Conover v. Dean Witter Reynolds, Inc., 794 F.2d at 524. The policy of deterring fraudulent securities practices, served by judicial enforcement of section 10(b), reflects, the court reasoned, the unsuitability of arbitration for such claims. Id. Hence, a judicial forum over all 1934 Act claims is necessary to accomplish that statute's purpose of establishing reasonably complete and effective control over securities transactions. Id. Although the court holds that no private remedy exists under section 15(c), see infra, at 660, vesting the power to make that determination with the court rather than arbitrators enforces this policy.
The court in Conover also compared the reasons for non-arbitrability of claims under the 1933 Act, as discussed in Wilko v. Swan, 346 U.S. 427, 74 S.Ct. 182, 98 L.Ed. 168 (1953), with considerations relevant to the 1934 Act. 794 F.2d at 525-526. The Ninth Circuit identified three main reasons the Supreme Court gave in Wilko for concluding that Congress intended to void agreements to arbitrate 1933 Act claims: (1) securities customers are subject to overbearing by securities dealers, (2) arbitration is not the equivalent of judicial proceedings in securities cases under the 1933 Act, because judicial direction is needed to insure the effectiveness of the protective provisions of the Act, and (3) because of the special jurisdictional and procedural protections of the 1933 Act, a securities customer surrenders more by agreeing to arbitrate claims under the Act than would a person who agrees to arbitrate a normal business transaction claim. Id. The Ninth Circuit concluded that all of these "factors that led the Wilko Court to conclude that Congress intended to preclude enforcement of arbitration agreements under the 1933 Act can be no less applicable to claims under the 1934 Act." Id. at 527. The circuit's conclusion applies as well to section 15(c) claims as it does to section 10(b) claims; indeed, the Ninth Circuit has just held that section 15(c) claims are not arbitrable. Badart v. Merrill, Lynch Pierce, Fenner & Smith, Inc., 797 F.2d 775 (9th Cir.1986).
2. Arbitrability of 1933 Act Claim.
In Wilko v. Swan, 346 U.S. at 427, 74 S.Ct. at 182, the Supreme Court held that claims arising under section 12(2) of the 1933 Act were not arbitrable. Plaintiff's claim arises, however, under section 17(a) of the 1933 Act, therefore, defendants assert that Wilko does not apply to it. Defendants argue, in essence, that the Wilko Court only addressed the arbitrability of a claim under section 12(2) of the 1933 Act, which specifically provides as private remedy, 15 U.S.C. section 77l(2), which requires a judicial forum to assure its effectiveness. 15 U.S.C. ง 77v(a). But unlike section 12(2), section 17(a) does not contain a provision for a private remedy. Consequently, defendants argue that the Court's concern in Wilko that Congress intended to insure a judicial forum for claims arising under the 1933 Act is not present here because section 17(a) contains no express remedies.
Defendants' argument is completely undermined by the Ninth Circuit's reasoning in Conover. There, the court extended to implied rights of action under the 1934 Act the same heightened solicitude the Wilko Court gave to the express remedy of section 12(2) of the 1933 Act. Accordingly, Conover indicates that the reasoning and holding of Wilko applies to the implied remedy of section 17(a). Further, because section 17(a) and section 10(b) "are virtually identical," Brener v. Becker Paribas, Inc., 628 F.Supp. 442, 451 (S.D.N.Y.1985), the Ninth Circuit's determination that section 10(b) claims are not subject to arbitration supports the conclusion that section 17(a) claims are also non-arbitrable. The court therefore denies the petition to compel arbitration of plaintiff's federal securities claims.
D. RICO Claim.
Defendants contend that the fifth claim, arising under RICO, is also subject to arbitration. Although an increasing number of courts have held that RICO *657 claims are subject to arbitration,[2] this court declines to so hold in light of the important public interest in the enforcement of RICO.
In S.A. Mineracao Da Trindade-Samitri v. Utah International, Inc., 576 F.Supp. 566 (S.D.N.Y.1983), aff'd on other grounds, 745 F.2d 190 (2d Cir.1984), the court engaged in a lengthy analysis of the policies underlying RICO and the federal arbitration statute. Noting Congress' express purpose for RICO to "eradicate organized crime in the United States", the court concluded that
Given the purposes of RICO, it is abundantly clear that its enforcement involves concerns touching upon vital national interests. Although RICO claims may be brought by private individuals, the resolution of such claims will frequently have an impact on society at large. The Court must infer that Congress did not intend to entrust the enforcement of such laws to arbitrators, and consequently, the Court holds that claims asserted under RICO are not arbitrable.
576 F.Supp. at 575. This court is persuaded by such reasoning and agrees with the conclusion, which has been recently adopted by the Second Circuit. See McMahon v. Shearson/American Express, Inc., 788 F.2d 94, 98 (2d Cir.1986), aff'g in relevant part, 618 F.Supp. 384, 387 (S.D.N.Y. 1985) (RICO claim non-arbitrable because of "important federal policies inherent in the enforcement of RICO by the federal courts"). See also Weizman v. Adornato, 625 F.Supp. 1101, 1102 (E.D.N.Y.1985); Wilcox v. Ho-Wing Sit, 586 F.Supp. 561, 567 (N.D.Cal.1984) (RICO claims entitled to special protection afforded by courts).
Defendants argue that the reasoning of the S.A. Mineracao case is no longer sound due to the Supreme Court's decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. ___, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). There, the Court held that claims arising under the Sherman Act and encompassed within a valid arbitration clause in an agreement embodying an international commercial transaction are arbitrable pursuant to the Federal Arbitration Act. In doing so, the Court seemingly developed a uniform standard for determining when a federal statute allows for arbitration of claims arising under it:
Having made the bargain to arbitrate, the party should be held to it unless Congress itself has evinced an intention to preclude a waiver of judicial remedies for the statutory rights at issue.
Id. at ___, 105 S.Ct. at 3355, 87 L.Ed.2d at 456. Because S.A. Mineracao is premised on the rule that Sherman Act claims are not arbitrable, defendants contend that Mitsubishi Motors undercuts its reasoning. Defendants also contend that under the Mitsubishi Motors standard, Congress has not evinced an intention to preclude arbitration of RICO claims.
The reasoning underlying the S.A. Mineracao decision remains sound. Cf. Wilcox v. Ho-Wing Sit, 586 F.Supp. at 567. The Court's concern in Mitsubishi Motors for providing a forum acceptable to both parties in an international trade dispute is not present in this lawsuit involving domestic securities transactions. Also, Congress' very clear purpose in enacting RICO, and the national interests it touches upon, is sufficient indication of intent to preclude waiver of judicial remedies under the Mitsubishi Motors standard to override competing federal policies favoring arbitration.
Other factors militate in favor of providing a judicial forum for RICO claims. The law interpreting the RICO statute perhaps no longer is "embryonic," but the unsettled nature of the law suggests that RICO claims are better left to courts than to *658 arbitrators. Cf. Wilcox v. Ho-Wing Sit, 586 F.Supp. at 567. Further, because the RICO claims here are predicated on violations of the securities laws, the Ninth Circuit's decision in Conover also militates against compelled arbitration. Id. Compare Sacks v. Dean Witter Reynolds, Inc., 627 F.Supp. 377 [current] Fed.Sec.L.Rep. (CCH) at ถ 92,429 (arbitrability of securities claims supports arbitrability of RICO claims). Finally, when as here RICO claims are joined with claims for securities fraud, the court is reluctant to compel arbitration of the RICO claims now that the federal securities claims are not subject to arbitration. See Weizman v. Adornato, 625 F.Supp. at 1102. The court therefore will deny arbitration of the RICO claim.
E. Stay Pending Arbitration.
Defendants seek a stay of all proceedings until the completion of arbitration. Under the Federal Arbitration Act, the court must stay litigation of all claims subject to arbitration, but has discretion whether to stay or proceed with the non-arbitrable claims. See 9 U.S.C. ง 3; Wilcox v. Ho-Wing Sit, 586 F.Supp. at 567. Accordingly, plaintiffs' state law claims are stayed. Because the court believes that judicial economy will not be served by staying the federal claims, the court declines to stay those claims and will allow them to proceed in this forum.
III.
For the reasons stated above, the court concludes that plaintiffs' federal claims are not subject to arbitration. The court believes, however, that because plaintiffs do not attack the validity of the arbitration clauses, and offer no reason why they do not encompass the pendent state claims, those claims are arbitrable. The court will therefore compel arbitration of the state claims and order a stay of those claims. But the court will not stay the federal claims, and so proceeds to defendants' motion to dismiss.
MOTION TO DISMISS
Defendants Merrill Lynch and Hollis Anderson move this court to dismiss plaintiffs' complaint pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, for failure to state a claim upon which relief may be granted. The other defendants join in this motion.[3] Merrill Lynch further moves this court to impose sanctions under Rule 11, Federal Rules of Civil Procedure, against plaintiffs and their attorney for alleging a RICO violation with allegedly no factual basis. Although the other defendants do not join in this motion, they do not oppose it. Because the pendent state claims are stayed pending the outcome of arbitration, the court will not rule upon the motion to dismiss to the extent it deals with those claims.
Defendants raise four grounds for dismissing the federal claims: (1) Section 17(a) of the 1933 Act does not create a private right of action, (2) Section 15 of the 1934 Act does not create a private right of action, (3) Plaintiffs fail to state a claim under section 10(b) and Rule 10b-5, (4) Plaintiffs fail to state a claim under RICO.
I.
A. Whether Section 17(a) Creates a Private Right of Action.
Plaintiffs' fourth claim for relief is grounded on section 17(a) of the 1933 Act, 15 U.S.C. ง 77q(a). Defendants assert that no relief is available to plaintiffs under that section because the "overwhelming" weight of authority and better reasoning holds that no private remedy exists under section 17(a).
Section 17(a) does not explicitly provide for a private remedy.[4] Therefore, the issue *659 is whether such a remedy can be implied. The court need not examine the "overwhelming" weight of authority, nor engage in lengthy analysis to find the answer. In Mosher v. Kane, 784 F.2d 1385 (9th Cir. 1986), the Ninth Circuit held that a private right of action does exist under section 17(a). There, the district court dismissed plaintiff's claim for relief under section 17(a) on the ground that plaintiff lacked standing to bring the claim. The circuit reversed, stating that "appellants have, at least facially, pleaded a complaint sufficient to state a claim for relief." Id. at 1391. By reaching this conclusion, the Ninth Circuit necessarily had to hold that a private right of action exists under section 17(a). The court explicitly stated, "we believe that the better view is to recognize an implied right of action." 784 F.2d at 1391, n. 9.
The court concludes, therefore, that under Mosher v. Kane a private right of action exists under section 17(a).[5] Several other circuits have reached this conclusion. See Kirshner v. United States, 603 F.2d 234 (2d Cir.), cert. denied, 442 U.S. 909, 99 S.Ct. 2821, 61 L.Ed.2d 274 (1979); Daniel v. International Brotherhood of Teamsters, et al., 561 F.2d 1223 (7th Cir.1977); Newman v. Prior, 518 F.2d 97 (4th Cir.1975). See also Stephenson v. Calpine Conifers II, Ltd., 652 F.2d 808, 815 (9th Cir.1981) (Private right of action exists under section 17(a)) (dictum).
B. Whether the Fourth Claim is Sufficiently Pleaded.
But defendants, contending that plaintiffs "apparently recognize" that they have no remedy under section 17(a), argue that the fourth claim fails because it is insufficiently pleaded under Rule 9(b), Federal Rules of Civil Procedure.
Rule 9(b), Federal Rules of Civil Procedure, requires that in all fraud allegations, "the circumstances constituting fraud or mistake shall be stated with particularity." Fed.R.Civ.P. 9(b). Rule 9(b) must be read in conjunction, however, with Rule 8(c), which requires only a "short and plain statement of the claim." Fed.R. Civ.P. 8(a). See also 5 C. Wright & A. Miller, FEDERAL PRACTICE AND PROCEDURE, ง 1298 at 406 n. 66, and cases cited therein (1969). The Ninth Circuit standard was articulated in Walling v. Beverly Enterprises, 476 F.2d 393 (9th Cir. 1973):
Rule 9(b) requires that the circumstances constituting fraud must be stated with particularity. But the rule does not require nor make legitimate the pleading of detailed evidentiary matter.... Nor does the rule require any particularity in connection with an averment of intent, knowledge or condition of mind. It only requires the identification of the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations.
*660 See also Bosse v. Crowell, Collier & MacMillan, 565 F.2d 602, 611 (9th Cir.1977). While mere conclusory allegations of fraud will not suffice, statements of the time, place and nature of the alleged fraudulent activities will satisfy Rule 9(b). Id. Plaintiffs must also allege the specific content of the false representations as well as the identities of the persons making the misrepresentations. See Schnitzer v. Oppenheimer & Co., Inc., 633 F.Supp. 92, 96 (D.Ore.1985); Lopez v. Dean Witter Reynolds, Inc., 591 F.Supp. 581, 585 (N.D.Cal. 1984). In cases involving multiple defendants, plaintiffs must specify the role of each defendant in the fraud and state whether the particular defendant is being sued as a principal or as an aider and abettor. Riley v. Brazeau, 612 F.Supp. 674, 677 (D.Ore.1985).
Measured against these standards, the fourth claim satisfies Rule 9(b) requirements in most respects. Although the fourth claim itself contains no factual allegations, it incorporates by reference paragraphs one through thirty-two and forty through forty-four, which do indicate the factual basis for plaintiffs' claim. The nature of the alleged wrongdoing is summarized in paragraph 32: "Defendants Powell and Paine Webber, and each of them, at all material times concealed from plaintiffs the true facts regarding plaintiffs account and in fact misrepresented the accurate status of that account." The complaint also alleges the time frame of the course of conduct of which plaintiffs complain. Complaint, ถถ 13, 20. In addition, the complaint lists a series of allegedly false representations. See Complaint ถ 11, 14, 15, 21, 23, 24, 25, 27, 29, 31. The allegations state the time, place, and nature of the allegedly false representations. Hence, the complaint contains more than "conclusory allegations of wrongdoing" and plaintiffs have alleged more than "boilerplate claims of misrepresentation." Kimmel v. Peterson, 565 F.Supp. 476, 481 (E.D.Penna.1983).
Nevertheless, the court will require plaintiffs to amend the complaint in several respects. First, plaintiffs will denote exactly which defendants are being charged under section 17(a) and in what capacity. Plaintiffs are to avoid such quaint averments as "Defendants Powell and Paine Webber and each of them" and instead specifically state which defendants committed which alleged acts. Also, the court will ask the plaintiffs to carefully allege which representations were false and exactly how they were false or the omissions misleading. Otherwise, it is not clear whether plaintiffs are alleging actionable fraud or merely bad investment advice โ defendants must have fair notice of the fraud claimed.
II.
A. Whether Section 15 Creates a Private Right of Action.
In their first and second claims for relief, plaintiffs allege violations of section 15(c) of the 1934 Act, 15 U.S.C. ง 78o. Plaintiffs allege that defendants engaged in excessive trading on plaintiffs' accounts and placed plaintiffs in unsuitable investments. Defendants argue that the first and second claims must be dismissed because no private right of action exists under section 15(c).
Section 15(c), as section 17(a), does not explicitly provide a private right of action. Therefore, the issue again is whether such a private right can be implied. Defendants cite SEC v. Seaboard Corp., 677 F.2d 1301 (9th Cir.1982) for the proposition that the Ninth Circuit does not recognize a private right of action under section 15(c). In Seaboard, the court did state that "We believe the terms of the sections and its legislative history indicate that Congress did not intend that such liability be implied," Id. at 1314; however in Seaboard, the precise issue was whether an action for secondary liability could be implied from section 15(c) because plaintiff's claim was based upon an aider and abettor or conspirator theory of liability. The Ninth Circuit narrowly held that "on this record summary judgment could properly be granted on the basis that no private right of action is to be implied under this section." Id. at 1313-1314.
*661 Arguably, the Seaboard decision is limited to the facts of the case, and only holds that section 15(c) does not create a remedy for secondary liability. The broad language in the case suggests, however, that the Ninth Circuit does not recognize an implied right of action under section 15(c), and this court so holds.[6] But plaintiffs do not ask the court to distinguish Seaboard to save their first and second claims; rather, they assert that their claims are based on a limited right of rescission under section 29(b) of the 1934 Act, 15 U.S.C. section 78cc, of "each and every transaction consummated on their behalf by defendants." Plaintiff's Opposition Memo, page 17.
Plaintiffs concede that the complaint does not specifically invoke section 29(b), but argue that the complaint, liberally interpreted, seeks equitable relief under section 29(b). The court agrees with the defendants, however, that to read in the asserted cause of action under section 29(b) in place of the plainly stated section 15(c) claim, would not be liberal interpretation, but sheer invention by this court. Because plaintiffs have no private right of action under section 15(c), and they fail to state a claim for relief under section 29(b), the court will grant defendants' motion to dismiss the first two claims.
B. Whether Plaintiffs Can State a Claim Under Section 29(b).
The remaining issue is whether the court should allow plaintiff leave to amend the complaint to allege a claim under section 29(b). The controversy is whether a party can obtain rescission under section 29(b) for violations of section 15(c) of the 1934 Act, for which there is no private right of action. This is a matter of first impression in this circuit. If that question is answered in the affirmative, the question then becomes whether section 29(b) applies to rescind the transactions complained of by plaintiffs.[7]
Section 29(b) provides, in relevant part:
(b) Every contract made in violation of any provision of this chapter or of any rule or regulation thereunder, and every contract (including any contract for listing a security on an exchange) heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of, any provision of this chapter or any rule or regulation thereunder shall be void (1) as regards the rights of any person who, in violation of any such provision, rule, or regulation, shall have made or engaged in the performance of any such contract, and (2) as regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which the making or performance of such contract was in violation of any such provision, rule, or regulation.
15 U.S.C. ง 78cc(b). Section 29(b) renders the offending contract voidable at the option of the innocent party. Mills v. Electric Auto-Lite Co., 396 U.S. 375, 387, 90 *662 S.Ct. 616, 623, 24 L.Ed.2d 593 (1970) (dictum). Accord Royal Air Properties, Inc. v. Smith, 312 F.2d 210, 213 (9th Cir.1962). Section 29(b), by implication, provides a private, equitable cause of action for rescission or similar relief. See Regional Properties, Inc. v. Financial and Real Estate Consulting Co., 678 F.2d 552, 557-558 (5th Cir.1982) (courts have "uniformly held or assumed" that suits can be brought under section 29(b)); Royal Air Properties, Inc. v. Smith, 312 F.2d at 210. See generally Greenbaum & Stein, Section 29(b) of the Securities Exchange Act of 1934: A Viable Remedy Awakened, 48 Geo.Wash. L.Rev. 1 (1979) ("Viable Remedy").
Defendants distinguish those cases finding private remedies under section 29(b) on the ground that those courts have granted rescission under section 29(b) only where contracts violated sections of the 1934 Act which themselves grant private rights of action. See Mills v. Electric Auto-Lite, 396 U.S. at 375, 90 S.Ct. at 616 (section 14(a) violation); Myzel v. Fields, 386 F.2d 718 (8th Cir.), cert. denied, 390 U.S. 951, 88 S.Ct. 1043, 19 L.Ed.2d 1143 (1968) (rescission for contracts in violation of section 10(b)); Royal Air Properties, Inc. v. Smith, 312 F.2d at 210 (rescission for violations of section 10(b) subject to equitable defenses). Under defendants' reasoning, section 29(b) serves as a form of relief rather than an independent basis of a private cause of action.
The court cannot entirely agree with defendants' logic. While the court believes that section 29(b) does not create an implied private right of action for money damages, see Viable Remedy, 48 Geo.Wash.L. Rev. at 44 ("better argument" is that section 29(b) does not give rise to action for money damages), it does create an implied private cause of action for rescission or similar equitable relief. See Regional Properties v. Financial and Real Estate Consulting Co., 678 F.2d at 558. See also Western Federal Corp. v. Erickson, 739 F.2d 1439, 1444 n. 5 (9th Cir.1984) ("An innocent party may sue under section 29(b) to rescind a contract"). This conclusion is supported by language in Mills v. Electric Auto-Lite Co., 396 U.S. 375, 90 S.Ct. 616, in which the Court stated in dicta that the interests of the "innocent party" to a contract are protected by "giving him the right to rescind," under section 29(b). Id. at 387-388, 90 S.Ct. at 623. The conclusion that section 29(b) itself impliedly creates a private cause of action is also supported by the decision in Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 100 S.Ct. 242, 62 L.Ed.2d 146 (1979). There, the Supreme Court held that section 215(b) of the Investment Advisers Act, 15 U.S.C. ง 80b-15,[8] which is nearly identical to section 29(b) of the 1934 Act, provides a private cause of action. In so holding the Court reasoned that
By declaring certain contracts void, ง 215 by its terms necessarily contemplates that the issue of voidness under its criteria may be litigated somewhere. At the very least Congress must have assumed that ง 215 could be raised defensively in private litigation to preclude the enforcement of an investment advisers contract. But the legal consequences of voidness are typically not so limited. A person with the power to void a contract ordinarily may resort to a court to have the contract rescinded and to obtain restitution of consideration paid.... Moreover, the federal courts in general *663 have viewed such language as implying an equitable cause of action for rescission or similar relief.
For these reasons we conclude that when Congress declared in ง 215 that certain contracts are void, it intended that the customary legal incidents of voidness would follow, including the availability of a suit for rescission ..., and for restitution.
Id. at 17, 100 S.Ct. at 246 (citations and footnotes omitted). The court is thus persuaded by analogy that an implied private right of action exists under section 29(b): "Because the Court in Lewis was persuaded by the language of section 215 of the Advisers Act that an implied private right of action exists, it necessarily follows that section 29(b) leads to a similar conclusion with respect to the Exchange Act." Viable Remedy, 48 Geo.Wash.L.Rev. at 44.
Further, this court, having concluded that section 29(b) creates an implied right of action and is not simply a remedy for other 1934 Act provisions, does not see why section 29(b) causes of action should be limited to contracts which violate only those 1934 Act provisions creating private rights of action. The language of section 29(b) certainly does not yield such a limitation, for it declares void any contract made in violation of any provision of the 1934 Act. The limitation proposed by defendants is sensible if section 29(b) is interpreted to allow an action for damages; otherwise, that section would bring in implied rights of action through the back door. But this danger is not present when section 29(b) claims are limited to rescission or other equitable relief. See Viable Remedy, 48 Geo.Wash.L.Rev. at 44. Moreover, the limitations period contained in section 29(b) for contracts claimed to be void by reason of a violation of section 15 of the 1934 Act,[9] is a clear indication that a rescission claim may be based upon a violation of section 15(c).
Indeed, the distinction argued by defendants, though not invalid, does not prove the conclusion for which it is offered.[10] It is true that the cases they cite awarded relief under section 29(b) only where the plaintiff alleged violations of a 1934 Act provision giving a private remedy. Yet, these cases do not mean that a rescission claim cannot be grounded on other sections of the 1934 Act as well. In both Regional Properties v. Real Estate Consulting Co., 678 F.2d at 552, and Eastside Church of Christ v. National Plan, Inc., 391 F.2d 357 (5th Cir.), cert. denied, 393 U.S. 913, 89 S.Ct. 234, 21 L.Ed.2d 198 (1968), the Fifth Circuit recognized claims for rescission under section 29(b) based upon violations of section 15(a) of the 1934 Act. It is unclear whether the Fifth Circuit recognizes a private cause of *664 action under section 15;[11] nevertheless, a finding of an implied remedy under section 15(a) was not a prerequisite to that circuit's conclusion allowing a rescission claim under section 29(b) in those cases. The Ninth Circuit's strong suggestion in Western Federal Corp. v. Erickson, 739 F.2d at 1439, that section 29(b) creates an implied right to rescind contracts made in violation of section 15(a), while recognizing that no implied cause of action exists under section 15, lends support to the proposition that a section 29(b) claim can be based on 1934 Act provisions that do not contain private rights of action. Id. at 1443-1444 n. 5.
The court holds, therefore, that plaintiff may state an equitable claim for rescission under section 29(b) based upon violations of section 15(c) of the 1934 Act. The court then must address defendants' argument that the rescission of the individual transactions sought by plaintiffs is not available.
Plaintiffs state in their brief that they seek rescission of the individual transactions made on their accounts with defendants, as well as rescission of the customer agreements themselves. Relying on Slomiak v. Bear Stearns & Co., 597 F.Supp. 676 (S.D.N.Y.1984), defendants contend that section 29(b) has been used to rescind only an underlying contract made in violation of section 15(c), not individual transactions. Also, defendants argue that plaintiffs have alleged no facts suggesting that plaintiffs' customer agreements with them are void.
In Slomiak, the court held that plaintiff could not state a cause of action for rescision under section 29(b) for the liquidation of his account in violation of Rule 10b-16 because plaintiff did not allege that the customer agreements establishing his margin and repurchase accounts at Bear Stearns were themselves unlawful. The court first ruled, distinguishing between a "contract" and a "transaction" that under section 29(b) only unlawful contracts may be rescinded, not unlawful transactions made pursuant to lawful contracts. Id. at 682. See also Zerman v. Jacobs, 510 F.Supp. 132, 135 (S.D.N.Y.), aff'd, 672 F.2d 901 (2d Cir.1981); Palmer v. Thomson & McKinnon Auchincloss, Inc., 474 F.Supp. 286, 291 (D.Conn.1979).
The court in Slomiak, relying on Drasner v. Thomson McKinnon Securities, 433 F.Supp. 485 (S.D.N.Y.1977), then construed section 29(b) as rendering void only those contracts which by their terms violate the 1934 Act on the rules and regulations thereunder, for "it is only such contracts which are `made in violation of,' or `the performance of which involves the violation of' the statute and the rules and regulations thereunder." 597 F.Supp. at 682, quoting, Drasner v. Thomson McKinnon Securities, Inc., 433 F.Supp. at 502. Hence, defendants apparently argue that plaintiffs' section 29(b) claim fails because they cannot show that the customer agreements by their terms violated the 1934 Act.
The court agrees that under section 29(b) plaintiffs can only seek to rescind the customer agreement and not the individual transactions made on their accounts. See Slomiak v. Bear Stearns & Co., 597 F.Supp. at 682. This interpretation of section 29(b) comports with its language, which specifically renders only contracts made in violation of the 1934 Act void. See 15 U.S.C. ง 78cc. But the court does not believe that a contract must by its own terms violate the 1934 Act in order to be voidable udner section 29(b), for on a literal reading of that section "it is difficult to conclude that the court in Drasner correctly interpreted the section." Viable Remedy, 48 Geo.Wash.L.Rev. at 21. Under section 29(b) itself, which applies to contracts "made in violation of" or "the performance of which involves the violation of" the 1934 Act, it is the making or performance of the contract, and not simply its terms, which must be scrutinized to determine whether the voidability provisions apply. Id. The authors of Viable Remedy explain:
*665 Thus, the express terms of a contract could be perfectly lawful, yet the `making' of the contract might involve a violation of the [1934 Act] or its rules or regulations. Similarly, a contract whose terms do not violate the [1934 Act] or any rules or regulations thereunder could be performed in such a manner as to `involve' a violation. In either case, the voidability provisions should apply even though the terms of the contract are within the bounds of the law.
Id. (footnotes omitted).
Although plaintiffs have alleged no facts which suggest that the underlying customer agreements with defendants are void, the court cannot say that they are unable to make such allegations. Accordingly, the first two claims of the complaint are dismissed but with leave for plaintiffs to amend in conformance with this decision.[12]
III.
A. Whether Plaintiffs Claim Under Section 10(b) and Rule 10b-5 is Sufficiently Pleaded.
Plaintiffs' third cause of action alleges violations of section 10(b) of the 1934 Act, 15 U.S.C. ง 78j(b), and SEC Rule 10b-5.[13] Again citing Rule 9(b), Federal Rules of Civil Procedure, defendants argue that the complaint fails to specifically allege the time, place and nature of the allegedly fraudulent statements or omissions and who made them. Gottreich v. San Francisco Investment Corp., 552 F.2d 866 (9th Cir.1977). Defendants also argue that the complaint is deficient because it does not distinguish between defendants.
Plaintiffs' section 10(b) claim has two aspects. Plaintiffs apparently claim that defendants' conduct violated the securities laws in that (1) it constituted churning and (2) it included various fraudulent misrepresentations and omissions. See Plaintiffs' Opposition Memo, page 19-21.
1. Churning.
"Churning" is "excessive trading by a broker exercising control over an account, disproportionate to the size, character and objectives of an account, for the purposes of generating commissions." Faturik v. Woodmere Securities, Inc., 442 F.Supp. 943, 944 (S.D.N.Y.1977). A claim of churning states a cause of action for fraud within the meaning of section 10(b) and Rule 10b-5. Newburger, Loeb & Co., Inc. v. Gross, 563 F.2d 1057, 1069 (2d Cir. 1977), cert. denied, 434 U.S. 1035, 98 S.Ct. 769, 54 L.Ed.2d 782 (1978).
In order to establish their churning claim, plaintiffs must prove (1) that the broker engaged in excessive trading in light of the objectives and nature of the account and (2) that the broker dealer effectively exercised control over trading in the account and manipulated the account to his benefit. Id. While there appears to be a split of authority, this court follows the view that to satisfy Rule 9(b) with regard to the first element, the complaint should set forth a statement of facts which would permit a determination of either the turnover ratio of the account, or the percentage *666 of the account value paid in commissions. Baselski v. Paine, Webber, Jackson & Curtis, Inc., 514 F.Supp. 535, 541 (N.D.Ill. 1981). The plaintiffs need not list with particularity every transaction relevant to their claim. Id. See also Lopez v. Dean Witter Reynolds, Inc., 591 F.Supp. 581, 584 (N.D.Cal.1984) (following Baselski). Compare Zonszein v. Bache Halsey Stuart Shields, Inc. [current] Fed.Sec.L. Rep. (CCH) ง 92,233 (S.D.N.Y. June 24, 1985) [Available on WESTLAW, DCTU database] (plaintiff must identify the nature, amount, and dates of the particular sales and transactions upon which the claim of churning is based).
The complaint easily passes this standard. Paragraphs 13 and 20 allege that defendants' activities during the relevant time frames produced an annual turnover rate of fifteen and ten times per year respectively. The complaint also adequately alleges that defendants exercised control over plaintiffs' account. Complaint, ถถ 40-41.
2. Misrepresentations and Omissions.
Rule 9(b), which applies to section 10(b) and Rule 10b-5 cases, see Gottreich v. San Francisco Investment Corp., 552 F.2d at 866, requires that in all averments of fraud the circumstances constituting fraud be stated with particularity. Fed.R. Civ.P. 9(b). Plaintiffs must allege the time, place, and nature of the fraudulent activities and the specific content of the alleged misrepresentations. See Bosse v. Crowell, Collier & MacMillan, 565 F.2d 602 (9th Cir.1977); Riley v. Brazeau, 612 F.Supp. 674, 677 (D.Ore.1985). In cases involving multiple defendants, plaintiffs must specify the role of each defendant in the fraud. See Riley v. Brazeau, 612 F.Supp. at 677.
The court's discussion of Rule 9(b) in regard to the section 17(a) claim, see supra, at 660, applies to plaintiffs' section 10(b) claim as well. Although paragraph 41 does not describe the time and place of the alleged misrepresentations, the time-frame of the alleged wrongdoing is clear from the complaint. Because the alleged misrepresentations are numerous and take place over an extended period of time, less specificity is required. See Baselski v. Paine, Webber, Jackson & Curtis, 514 F.Supp. at 540. To require plaintiffs to allege each misrepresentation over a two-year period would require defendants to plead evidence and would produce a complaint that is not a short and plain statement of the claim. Fed.R.Civ.P. 8(a).
But the court will require plaintiffs to amend the complaint as set forth in the discussion of the section 17(a) claim. The section 10(b) claim in addition is especially defective because it does not attempt to distinguish the role of each defendant in the fraud, but simply alleges that "Each of the Statements set forth in greater particularity in paragraph 41 above was false when made by defendants Merrill Lynch, Anderson, and Powell, and each of them." Complaint ถ 42. Further, while plaintiffs allege in paragraph 41 that only Merrill Lynch and Powell made misrepresentations and do not allege that Anderson said anything to them, they conclude in paragraph 42 that each of the misstatements were false when made by Anderson as well as Merrill Lynch and Powell. In their amended complaint, plaintiff will clarify this allegation, and clearly allege the nature of each individual defendant's role in the fraud. The third claim is dismissed with leave to amend as set forth above.
B. Motion to Strike.
Defendants also move to strike from the complaint allegations of statements made by defendants concerning the purchase of insurance policies and plaintiffs' taxable income, pursuant to Rule 12(f), Federal Rules of Civil Procedure.[14]*667 See Complaint, ถ 41(b), (c), and (d). Rule 12(f) allows the court to strike from any pleading any "insufficient defense or any redundant, immaterial, impertinent, or scandalous matter." Fed.R.Civ.P. 12(f). Here, the references in the complaint to insurance policies and plaintiffs' taxable income do not appear to be relevant to the claim for securities fraud under section 10(b) and Rule 10b-5. Section 10(b) and Rule 10b-5 make unlawful misrepresentations concerning the offer or sale of securities. See 15 U.S.C. ง 78j(b). Insurance policies are not securities for purposes of the 1934 Act. See Collins v. Baylor, 302 F.Supp. 408 (N.D.Ill.1969). Hence, alleged misrepresentations as to the suitability of insurance policies as investments and the adequacy of income from plaintiffs' margin account do not concern the purchase or sale of securities. Similarly, statements concerning the nature of plaintiffs' income does not concern securities. These allegations are therefore irrelevant to the third claim and are subject to a motion to strike.
Plaintiffs assert in response to the motion that allegations pertaining to insurance policies assist "in presenting the court with a full picture of the manipulative and deceptive course of conduct undertaken by defendant Powell," and that the allegations pertaining to plaintiffs' income were "made `in connection with' the management and trading in plaintiff's account by Powell and the other defendants." Plaintiffs' Opposition Memo, page 22. Neither of these arguments is persuasive. The purpose of the complaint is not to present the court with the full picture, but to allege the requirements of the pertinent offense. See Fed.R. Civ.P. 8(a). Unless the allegations are relevant to the elements of a claim under section 10(b), they will be stricken โ the court needs no further background information.
Accordingly, the motion to strike will be granted, but with leave for plaintiffs to amend to reallege the stricken matters in line with this decision.
IV.
Plaintiffs' fifth claim for relief alleges violations of RICO based upon securities fraud and mail and wire fraud. Although defendants contend that the plaintiffs do not indicate the precise statutory basis for their claim, plaintiffs specifically allege that the acts set forth in the fifth claim violated 18 U.S.C. sections 1962(a) and 1962(c). Complaint, ถ 52. Section 1962(a) provides, in relevant part:
It shall be unlawful for any person who has received any income derived, directly or indirectly, from a pattern of racketeering activity or through collection of an unlawful debt in which such person has participated as a principal within the meaning of section 2, title 18, United States Code, to use or invest, directly or indirectly, any part of such income, or the proceeds of such income, in acquisition of any interest in, or the establishment or operation of, any enterprise which is engaged in, or the activities of which affect, interstate or foreign commerce.
18 U.S.C. ง 1962(a). Section 1962(c) reads:
It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.
18 U.S.C. ง 1962(c). Plaintiffs apparently allege that defendants conspired to violate these subsections, see Complaint ถ 50, which is unlawful under 18 U.S.C. ง 1962(d).
Defendants move to dismiss the fifth claim on the grounds that its "conclusory" allegations are not supported by facts establishing the elements of a RICO cause of action, and that defendants formulation of the RICO claim conflicts with controlling case law. Specifically, defendants argue that the RICO claim fails because: (1) Plaintiffs' allegations of a pattern of racketeering *668 activity fail to meet the requirements of Rule 9(b), Federal Rules of Civil Procedure, (2) Plaintiffs inadequately allege the requisite predicate acts, and (3) Plaintiffs fail to allege a proper RICO enterprise. Defendant Merrill Lynch also seeks sanctions under Rule 11, Federal Rules of Civil Procedure because, they assert, "Plaintiff's attorney could not have believed in good faith that the facts which he alleged were adequate to state a claim for relief under RICO." Defendants' Memo, page 16.
A. Pattern of Racketeering Activity.
RICO prohibits the use of income derived from a "pattern of racketeering activity" to acquire an interest in or establish an enterprise engaged in or affecting interstate commerce, and conduct of or participation in the conduct of an enterprise through a "pattern of racketeering activity." 18 U.S.C. ง 1962. A pattern of racketeering activity "requires at least two acts of racketeering activity" within a ten-year period. 18 U.S.C. ง 1961(5). "Racketeering activity" consists of various predicate acts enumerated in section 1961(1).[15] Plaintiffs allege that "The acts of defendants as set forth above constituted a pattern of racketeering activity within the meaning of 18 U.S.C. Sections 1961(5), 1961(1)(D), 1961(1)(B), and 1341 and 1343." Complaint, ถ 39. These cited statutes indicate that the pattern of racketeering activity alleged by plaintiffs consists of securities fraud, mail fraud, and wire fraud.[16]
Defendants' motion to dismiss, as it relates to the pattern of racketeering allegation, apparently is directly only to the level of specificity with which plaintiffs allege the predicate acts. At page 16 of their brief, defendants state that "[p]laintiffs' conclusory allegation that defendants unspecified activities constituted a pattern of racketeering under these sections fails to meet the requirements of FRCP 9(b)." Defendants argue that Rule 9(b) applies to allegations of predicate acts involving fraud, and that plaintiffs have failed to allege with the requisite particularity facts constituting the elements of mail and wire fraud.
The essential elements of mail fraud[17] are (1) the formation of a scheme *669 or artifice to defraud, and (2) use of the mails or causing the use of mails in furtherance of the scheme. United States v. Bohonus, 628 F.2d 1167, 1171 (9th Cir.), cert. denied, 447 U.S. 928, 100 S.Ct. 3026, 65 L.Ed.2d 1122 (1980). The first element requires specific intent, and this intent is shown if the scheme was reasonably calculated to deceive persons of ordinary prudence and comprehension. Id. at 1172. The second element is satisfied when one acts knowing the use of the mails will follow in the ordinary course of business, or where though not intended, such use is reasonably foreseeable. Id. at 1173. Wire fraud[18] contains the same essential elements. Allington v. Carpenter, 619 F.Supp. 474, 477 (C.D.Cal.1985).
The complaint is deficient in alleging the requisite elements of mail and wire fraud. Nowhere do plaintiffs allege that defendants intentionally formed a scheme or artifice to defraud, and to infer such an allegation from the acts pleaded stretches the complaint too far. Plaintiffs do allege that defendants acted with intent to deceive, manipulate, and defraud, but that allegation is contained in the third claim for violation of section 10(b), and the court does not believe this intent can be carried over into a mail/wire fraud allegation as well. Although intent is a state of mind that may be averred generally, Fed.R. Civ.P. 9(b), it nonetheless must be alleged. See Bender v. Southland Corp., 749 F.2d 1205, 1216 (6th Cir.1984). Further, the only reference in the complaint to the use of mails is in paragraph 16, in which plaintiffs allege that "Defendant Powell, however, persuaded and convinced plaintiffs that defendant Powell could, and would, continue to manage and operate plaintiffs' accounts ... by utilizing telephone and mail contact with plaintiffs, which forms of communication were the primary means of communication to that point between plaintiffs and defendant Powell in any event." In the court's opinion, this allegation fails to meet the second element of mail/wire fraud, for it does not allege that defendants used or caused the use of the mails in furtherance of a scheme. Plaintiffs must specifically allege when and how defendants used the mail or wires in furtherance of a scheme to defraud.
B. Predicate Acts.
To state a claim under RICO, plaintiffs must allege that defendants engaged in at least two predicate acts of racketeering activity, defined in 18 U.S.C. section 1961(1), within a ten-year period. 18 U.S.C. ง 1961(5). Defendants argue that even if plaintiffs' other claims for relief satisfy Rule 9(b), they cannot serve as predicate acts because plaintiffs do not plead the requisite intent for criminal liability.
Section 1961(1)(B) defines racketeering activity to include any act which is "indictable" under 18 U.S.C. sections 1341 and 1343 (18 U.S.C. ง 1961(1)(B) and (D)). Hence, defendants contend that plaintiffs have not alleged the requisite special intent for criminal liability for mail and wire fraud. As the court pointed out above, the complaint is defective in that regard.
Also, defendants point out that plaintiffs have not alleged facts constituting criminal violations of the 1933 and 1934 Acts. Section 1961(1)(D) defines racketeering activity to include any "offense" involving fraud in the sale of securities "punishable" *670 under any law of the United States. 18 U.S.C. ง 1961(1)(D). This passage "obviously" refers to criminal, not civil violations of the securities laws.[19]See The Trane Co. v. O'Connor Securities, 718 F.2d 26, 29 (2d Cir.1983). Criminal liability under the 1933 and 1934 Acts requires "willful" violation of these acts. 15 U.S.C. งง 77x, 78ff.
In paragraph 44 of the complaint, plaintiffs allege that defendants "acted with intent to deceive, manipulate or defraud plaintiffs" in violation of section 10(b) and Rule 10b-5. Inasmuch as intent may be averred generally, Fed.R.Civ.P. 9(b), this allegation suffices for purposes of section 1961(1)(D). The other securities claims contain no allegations of willfulness or intent, however, and so cannot serve as predicate acts for the RICO claim unless plaintiffs appropriately amend.
The court also does not believe pleading the predicate acts by averring them generally and incorporating the general allegations of the complaint is useful here. See Complaint, ถถ 47, 49. This practice, though keeping the complaint at minimum length, is confusing in a multi-claim complaint because it does not indicate exactly which of the incorporated allegations are germane to the subject claim. This is especially true when pleading the predicate acts constituting the RICO allegation. This court, as many others, is sensitive to the abuse of RICO and therefore will require clarity and specificity in alleging the acts constituting the predicate acts.[20] The court then requests that plaintiffs in their amended complaint do not reallege and incorporate by reference the general allegations, but specifically set forth in the fifth claim itself those allegations, and only those allegations, which form the basis for the predicate acts. It is suggested that plaintiffs further delineate in the RICO claim exactly which allegations pertain to which predicate acts. In sum, plaintiffs will allege in full the facts constituting the predicate acts in the fifth claim for relief.
Finally, defendants contend that although plaintiffs include a claim for conspiracy under 18 U.S.C. section 1962(d), they allege none of the necessary elements of conspiracy. The Ninth Circuit, in United States v. Tille, 729 F.2d 615, 619 (9th Cir.), cert. denied, 469 U.S. 845, 105 S.Ct. 156, 83 L.Ed.2d 93 (1984), set forth the proof requirements for a RICO conspiracy, which are equally applicable at the pleading stage:
Proof of an agreement the objective of which is a substantive violation of RICO (such as conducting the affairs of an enterprise through a pattern of racketeering) is sufficient to establish a violation of section 1962(d). It is only when proof of such an objective is lacking that the evidence must establish the defendant's participation or agreement to participate in two predicate offenses.
729 F.2d at 619. See also United States v. Carter, 721 F.2d 1514, 1528-32 (11th Cir. *671 1984). When a conspiracy is alleged under section 1962(d), the complaint need not delineate with precision the roles of the various defendants, but it must inform each defendant of what he did to join the conspiracy. See Lewis v. Sporck, 612 F.Supp. 1316, 1325 (N.D.Cal.1985). Moreover, this court holds that in order for a plaintiff to have a private cause of action under 18 U.S.C. section 1962(d), there must be at the very least one or more overt acts causing injury to the plaintiff or "his business or property" under 18 U.S.C. section 1964(c). This position was taken in Medallion TV Enterprises v. SelecTV of California, 627 F.Supp. 1290, 1297-1300 (C.D.Cal.1986), the analysis of which this court adopts. But see United States v. Coia, 719 F.2d 1120, 1124 (11th Cir.1983), cert. denied, 466 U.S. 973, 104 S.Ct. 2349, 80 L.Ed.2d 822 (1984) (criminal RICO conspiracy requires no overt act).
The pertinent allegations of the complaint, paragraphs 50-51, fail to satisfy these requirements. Plaintiffs fail to allege the existence of an agreement and at least one overt act causing injury to plaintiffs. The unlawful object allegation, though in the correct form, is defective because the pleaded enterprises are legally inadequate. See, infra, at 671-673. Thus, plaintiffs' claim under section 1962(d) must be dismissed with leave to amend.
C. Enterprise.
A necessary allegation for a RICO claim is the existence of an "enterprise" which defendant acquired or operated by income received through a pattern of racketeering activity, 18 U.S.C. ง 1962(a), or which defendant conducted through a pattern of racketeering activity. 18 U.S.C. ง 1962(c). An "enterprise" includes any "individual, partnership, corporation, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity." 18 U.S.C. ง 1961(4). In paragraph 48 of the complaint, plaintiffs allege that
48. Defendant Merrill Lynch is an `enterprise' as defined by ... 18 U.S.C. Section 1961(4), and at all material times mentioned herein such enterprise has affected and does affect, interstate commerce. Defendant Paine Webber is a separate `enterprise' within the meaning of that statute....
Complaint ถ 48.
Defendants argue that this is a defective allegation of enterprise because a RICO defendant cannot also serve as the RICO enterprise. That proposition is correct; in Rae v. Union Bank, 725 F.2d 478, 480 (9th Cir.1984), the Ninth Circuit held that "[i]f [defendant] is the enterprise, it cannot also be the RICO defendant." See also United States v. Benny, 786 F.2d 1410, 1415 (9th Cir.1986); Haroco v. American National Bank, 747 F.2d 384, 399-400 (7th Cir.1984), aff'd on other grounds, ___ U.S. ___, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985); United States v. Computer Sciences, 689 F.2d 1181, 1190 (4th Cir. 1982), cert. denied, 459 U.S. 1105, 103 S.Ct. 729, 74 L.Ed.2d 953 (1983).
Plaintiffs respond by arguing, first of all, that Rae applies only to claims brought under section 1962(c), and does not apply to claims brought under 1962(a). Because the complaint is grounded on both subsections, the enterprise allegation is sufficient at least as to the section 1962(a) claim.
Although there is district court authority applying the principle of Rae to claims under section 1962(a) as well as section 1962(c), see Lopez v. Dean Witter Reynolds, Inc., 591 F.Supp. 581, 585-586 (N.D. Cal.1984); Willamette Savings & Loan v. Blake & Neal Finance Co., 577 F.Supp. 1415, 1426-1427 (D.Ore.1984), the Ninth Circuit has never so held. See United States v. Benny, 786 F.2d at 1410 (Defendant charged under 1962(c) only); Rae v. Union Bank, 725 F.2d at 478 ("The portion of the RICO statute applicable here is ... 1962(c)"). This court believes the better reasoned view is that an enterprise may also be the defendant under section 1962(a) and therefore adopts that position.
The court in Rae did not explain the reasoning for its decision, but the basis for holding that a RICO defendant cannot also *672 be a RICO enterprise is the language of section 1962(c), which requires that the liable person be employed by or associated with the enterprise. In Haroco v. American National Bank, 747 F.2d at 384, the Seventh Circuit reasoned:
We do not doubt that a corporation may satisfy the section 1961 definitions of both `person' and `enterprise,'.... But we focus our attention on the language in section 1962(c) requiring that the liable person be `employed by or associated with any enterprise' which affects interstate or foreign commerce. The use of the terms `employed by' and `associated with' appears to contemplate a person distinct from enterprise. If Congress had meant to permit the same entity to be the liable person and the enterprise under section 1962(c), it would have required only a simple change in language to make that intention crystal clear.
747 F.2d at 400. The Ninth Circuit recently adopted this explanation as the "best rationale," and stated that "Rae v. Union Bank ... hold[s] that a corporate defendant cannot be employed by itself or associate with itself." United States v. Benny, 786 F.2d at 1415-1416.
Interpreting Rae in this manner easily yields the conclusion that its holding does not apply to claims brought under section 1962(a). The language in section 1962(a) does not require a relationship between the person and the enterprise as does section 1962(c), and so it does not require the involvement of two separate entities. While it would be incongruous to find that a corporation can be employed by or associated with itself, it would not be so ridiculous to prohibit the corporate defendant, the "person," from using illgotten gain in the corporation, the "enterprise." See Schofield v. First Community Corp. of Boston, 793 F.2d 28, 31 (1st Cir.1986). This approach to the two subsections
[T]hus makes the corporation-enterprise liable under RICO when the corporation is actually the direct or indirect beneficiary of the pattern of racketeering activity, but not when it is merely the victim, prize, or passive instrument of racketeering. This result is in accord with the primary purpose of RICO, which, after all, is to reach those who ultimately profit from racketeering, not those who are victimized by it.
Haroco v. American National Bank, 747 F.2d at 402. In Schofield v. First Community Corp. of Boston, 793 F.2d at 32, the court approved this interpretation in dicta, stating that "[b]ecause a narrow reading of section 1962(a) also would insulate much criminal activity, and because the language permits a broader reading, that section must be read to allow corporations to serve both as the RICO Person and the RICO enterprise."
Accordingly, plaintiffs' enterprise allegation is sufficient for their section 1962(a) claim. In regard to the section 1962(c) claim, plaintiffs argue:
[T]he complaint specifically alleges an association in fact between the corporate defendants and each of the individual defendants employed by the corporations, and thus has alleged sufficient association between the defendants to meet the `enterprise' requirement of ง 1962(c). Although the association is not specifically denominated as an `enterprise' apart from the corporate defendants, the pleading is sufficiently definite to avoid a motion to dismiss, and, alternatively, can be easily cured by amendment. In any event, the motion to dismiss should be either denied outright or granted leave to amend.
Plaintiffs' Opposition Memo, page 34-35. The court does not believe that the pleading is sufficiently definite to avoid a motion to dismiss, so the remaining issue is whether plaintiffs can, as they claim, cure the defect by amendment.
Plaintiffs seek to allege that the RICO enterprise in this case consisted of an association in fact between Merrill Lynch and Paine Webber, respectively, and the individual defendants employed by each corporation. At first blush, the definition of "enterprise" under the RICO statute would not include an association consisting of a *673 corporation and individuals. See 18 U.S.C. ง 1961(4). But that section is not an exclusive list; it merely lists entities which are included in the RICO definition of "enterprise." United States v. Huber, 603 F.2d 387, 394 (2d Cir.1979), cert. denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980). Section 1961(4) is illustrative, not exhaustive, and where the enterprise is commercial, courts have consistently construed "enterprise" broadly. Id. See also Bunker Ramo Corp. v. United Business Forms, Inc., 713 F.2d 1272, 1285 (7th Cir. 1983) (enterprise includes the entities listed in section 1961(4) or any combination of them).
Plaintiffs' theory of enterprise was approved in Nunes v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 609 F.Supp. 1055 (D.Md.1985), a factually similar case. There, the court stated:
Defendants contend, however, that plaintiffs have failed to describe an `enterprise' separate and apart from Merrill Lynch. Plaintiffs assert that they have sufficiently alleged that the defendants, Poston, Beckwith, and Merrill Lynch, have formed an `enterprise' by associating to offer and sell securities to plaintiffs.
. . . . .
While plaintiffs concede that Merrill Lynch itself cannot be an `enterprise,' they allege that there was an association in fact between Merrill Lynch and either Beckwith (count IX), Poston (counts XIX and XX), or both Beckwith and Poston (count X). The court is of the opinion that plaintiffs' allegation that these defendants associated to offer and sell securities properly alleges an `enterprise' under RICO.
Id. at 1064-1065. (citations omitted). In light of the broad reading to be given section 1961(4), this court is of the same opinion, and will grant plaintiffs leave to amend the complaint.[21]
D. Sanctions.
Defendants move for sanctions under Rule 11, Federal Rules of Civil Procedure on the ground that plaintiffs' attorney could not have had a good ground to believe that the RICO claim was warranted at the time he signed the complaint. Defendants' sanctions motion is most vehemently directed to plaintiffs' allegation of enterprise, which they assert, was clearly deficient under Rae v. Union Bank when the complaint was filed.
The court denied defendants' request for sanctions above, and affirms that decision with regard to the RICO claim. The defects in the RICO claim might be cured by amendment, and the enterprise theory proposed by plaintiffs has found approval in at least one reported decision. See Nunes v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 609 F.Supp. at 1055. The court is cognizant of the in terrorem power of RICO and the flurry of meritless RICO claims, but at this stage in the proceedings does not find plaintiffs' claim so patently meritless as to warrant sanctions. Further, the court is also aware of the use of Rule 11 for mere harassment, a practice *674 which dulls the spirited advocacy that is the lifeblood of federal litigation. Although such free-wheeling Rule 11 practice may be standard in other federal districts of this state, it is not approved by this court.
V.
The court concludes that because the Ninth Circuit recognizes an implied private right of action under section 17(a), the motion to dismiss is denied as to the fourth claim for relief. Plaintiffs will be required, however, to amend that claim as explained above. The court will dismiss the first and second claims because it concludes that no private remedy exists under section 15(c), and because the complaint as it now stands does not state a claim for rescission under section 29(b). But plaintiffs may appropriately amend the complaint to allege a cause of action under section 29(b). The court also dismisses the third cause of action, arising under section 10(b), with leave for plaintiffs to reallege the claim with the requisite particularity. For the reasons stated above, the court will grant the motion to dismiss the RICO claim with leave for plaintiffs to correct the deficiencies in that claim.
ORDER
Defendants' petition to compel arbitration is GRANTED as to the pendent state claims, but DENIED as to the federal claims. The court orders a stay of proceedings in the state claims pending arbitration of those claims. Defendants' motion to stay the non-arbitrable claims is DENIED. Defendant Merrill Lynch's motion for sanctions under Rule 11 is also DENIED.
Defendants' motion to dismiss is GRANTED in part and DENIED in part as set forth in the memorandum of decision. Defendant Merrill Lynch's motion for sanctions under Rule 11 is DENIED. Plaintiffs shall have thirty (30) days from the date of this order in which to file an amended complaint in accordance with the analysis of the court's decision.
IT IS SO ORDERED.
NOTES
[1] Plaintiffs also argued at oral argument that the arbitration clauses are unenforceable under the SEC regulation found at 17 C.F.R. ง 240.15c2-2, which requires brokers to disclose to customers that they are not required to arbitrate any dispute arising under the federal securities laws. Most courts addressing this issue have held that section 15c2-2 is procedural only, and merely serves to guarantee that potential plaintiffs receive notice that an agreement to arbitrate does not override existing federal laws limiting the scope of possible litigation. Thus, section 15c2-2 does not create or preserve rights to litigate in federal court, and does not alone prevent arbitration of federal securities claims. See Steinberg v. The Illinois Company, 635 F.Supp. 615, Fed.Sec.L.Rep. (CCH) ง 92,792 (N.D.Ill.1986); Fisher v. Prudential-Bache Securities, Inc., 635 F.Supp. 234 (D.Md.1986); Shotto v. Laub, 632 F.Supp. 516 (D.Md.1986); Finkle and Ross v. A.G. Becker Paribas, Inc., 622 F.Supp. 1505, 1510 (S.D.N.Y.1985); Boyd v. Merrill Lynch etc., 614 F.Supp. 940 (S.D.Fla.1985). But see Levendag v. Churchill, 623 F.Supp. 620 (D.S.C.1985); Glavin v. Prudential-Bache Securities, 623 F.Supp. 629 (D.S.C.1985) (Section 240.15c2-2 prohibits brokers from using pre-dispute arbitration clauses). Because the court holds that the federal securities claims are not arbitrable, the court does not decide the significance of this regulation to the matter at hand.
[2] Cases holding that RICO claims are arbitrable include Baker v. Paine Webber, Jackson & Curtis, Inc., 637 F.Supp. 419, [current] Fed.Sec.L. Rep. (CCH) ถ 92,757 (D.N.J.1986); Gehardstein v. Shearson/American Express, [current] Fed. Sec.L.Rep. (CCH) ถ 92,512 (N.D.Oh. March 3, 1986); Ross v. Mathis 624 F.Supp. 110 [current] Fed.Sec.L.Rep. (CCH) ถ 92,343 (N.D.Ga.1985); Sacks v. Dean Witter Reynolds, Inc., 627 F.Supp. 377, [current] Fed.Sec.L.Rep. (CCH) ถ 92,429 (C.D.Cal. November 18, 1985); Finn v. Davis, 602 F.Supp. 801 (S.D.Fla.1985). The question whether RICO claims are arbitrable has never been decided by the Ninth Circuit.
[3] The sixth claim for relief contains allegations against Paine Webber only, and so it brings a separate motion to dismiss that claim. However, the sixth claim is a pendent state claim and is presently stayed pending arbitration; therefore, the court will not rule upon the motion.
[4] Section 17(a) provides:
(a) It shall be unlawful for any person in the offer or sale of any securities by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly โ
(1) to employ any device, scheme, or artifice to defraud, or
(2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.
[5] Defendants argue in their reply brief that this court should reject Mosher v. Kane because the Ninth Circuit in that case did not explain its reasoning and because the implication of a private right of action under section 17(a) is inconsistent with the Supreme Court's standards for implying private rights of action. The United States Supreme Court has never ruled, however, that a private remedy does not exist under section 17(a), and until such time as it or an en banc Ninth Circuit panel does, Mosher v. Kane is binding upon this court. The fact that the circuit did not explain its reasoning does not, as defendants contend, make the case any less binding or authoritative. As a lower court, it is not this court's function to question the soundness of a higher court's ruling, or to ignore the ruling altogether.
[6] Dictum in two other Ninth Circuit cases also indicates that a private remedy under section 15(c) does not exist in this circuit. In Berner v. Lazzaro, 730 F.2d 1319 (9th Cir.1984), aff'd 472 U.S. 299, 105 S.Ct. 2622, 86 L.Ed.2d 215 (1985), the court, citing Seaboard, stated that the "district court correctly dismissed the Section 15(c) claim. No private right of action exists under this section." Id. at 1320 n. 1. But the district court's dismissal of the section 15(c) claim was not squarely presented on appeal.
In Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530 (9th Cir.1984), the district court dismissed two claims of the complaint, including plaintiff's section 15(c) claim. Nothing, this, the Ninth Circuit stated that "The Ninth Circuit recently held, in SEC v. Seaboard Corp., [citation] that section 15 does not create a private cause of action." Id. at 533 n. 2. Because plaintiff did not appeal his section 15(c) claim, the court's statement is dicta.
Nevertheless, the language in these cases, though dicta or at best limited to the facts of the case, suggest that if the issue were presented today, the circuit would rule that there is no implied private right of action under section 15(c).
[7] The parties also appear to contest whether damages are available under section 29(b), although it is not clear whether plaintiffs are seeking leave to amend to request them, as plaintiffs speak only in terms of rescission and restitution.
[8] Section 215(b) of the Investment Advisers Act provides, in relevant part:
Every contract made in violation of any provision of this subchapter and every contract heretofore or hereafter made, the performance of which involves the violation of, or the continuance of any relationship or practice in violation of any provision of this subchapter, or any rule, regulation, or order thereunder, shall be void (1) as regards the rights of any person who, in violation of anoy such provision, rule, regulation, or order, shall have made or engaged in the performance of any such contract, and (2) as regards the rights of any person who, not being a party to such contract, shall have acquired any right thereunder with actual knowledge of the facts by reason of which the making or performance of such contract was in violation of any such provision.
15 U.S.C. ง 80b-15(b).
[9] The pertinent passage of section 29(b) is as follows:
(A) That no contract shall be void by reason of this subsection because of any violation or rule or regulation prescribed pursuant to paragraph (2) or (3) of subsection (c) of section 78o of this title, and (B) that no contract shall be deemed to be void by reason of this subsection in any action maintained in reliance upon this subsection, by any person to or for whom any broker or dealer sells, or from or for whom any broker or dealer purchases, a security in violation of any rule or regulation prescribed pursuant to paragraph (1) of subsection (c) of section 78o of this title, unless such action is brought within one year after the discovery of such sale or purchase involves such violation and within three years after such violation.
15 U.S.C. ง 78cc(b).
[10] Nor does defendants' reliance on the Viable Remedy article. The authors there state:
Second, a threshold question in analyzing section 29(b) is whether the remedy provided by the section is available only when there has been a violation of another section of the Exchange Act or any of the rules or regulations promulgated thereunder. The language seems to confirm this view, because it implies that section 29(b) may be involved only when there is a contract that is formed or performed in violation of another provision of the Exchange Act. The courts interpreting the section have unanimously reached this conclusion.
48 Geo.Wash.L.Rev. at 4-5 (footnotes omitted). The court agrees that section 29(b) may only be invoked when a contract is formed or performed in violation of another provision of the 1934 Act โ that is clearly required by the language of section 29(b). But neither this passage, nor the court, concludes that the violation must be of a provision creating a private remedy.
[11] In Rekant v. Desser, 425 F.2d 872 (5th Cir. 1970), the court found it unnecessary to decide whether section 15(d) of the 1934 Act contains a private remedy.
[12] Because plaintiffs' rescission claim goes only to the legality of the entire customer agreements, and not the arbitration clauses alone, plaintiffs' rescission claim has no bearing upon the court's ruling on the petition to compel arbitration. See, supra, pages 652-654.
[13] 15 U.S.C. section 78j reads:
It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce or of the mails, or of any facility of any national securities exchange โ
(a) To effect a short sale, or to use or employ any stop-loss order in connection with the purchase or sale, of any security registered on a national securities exchange, in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
(b) To use or employ, in connection with the purchase or sale of any security registered on a national securities exchange or any security not so registered, any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the Commission may prescribe as necessary or appropriate in the public interest or for the protection of investors.
[14] Defendants ask the court to grant the motion to strike only if it does not dismiss the third claim. Thus, the court's disposition of the motion to dismiss would seemingly obviate a ruling on the motion to strike. But the court interprets defendants' request only as conditioning the motion to strike on a dismissal with prejudice. Because the court dismissed the third claim with leave to amend, the court will proceed to rule on the motion to strike.
[15] (1) "racketeering activity" means (A) any act or threat involving murder, kidnaping, gambling, arson, robbery, bribery, extortion, or dealing in narcotic or other dangerous drugs, which is chargeable under State law and punishable by imprisonment for more than one year; (B) any act which is indictable under any of the following provisions of title 18, United States Code: Section 201 (relating to bribery), section 224 (relating to sports bribery), sections 471, 472, and 473 (relating to counterfeiting), section 659 (relating to theft from interstate shipment) if the act indictable under section 659 is felonious, section 664 (relating to counterfeiting), section 659 (relating to theft from interstate shipment) if the act indictable under section 659 is felonious, section 664 (relating to embezzlement from pension and welfare funds), sections 891-894 (relating to extortionate credit transactions), section 1084 (relating to the transmission of gambling information), section 1341 (relating to mail fraud), section 1343 (relating to wire fraud), section 1503 (relating to obstruction of justice), section 1510 (relating to obstruction of criminal investigations), section 1511 (relating to the obstruction of State or local law enforcement), section 1951 (relating to interference with commerce, robbery, or extortion), section 1952 (relating to racketeering), section 1953 (relating to interstate transportation of wagering paraphernalia), section 1954 (relating to unlawful welfare fund payments), section 1955 (relating to the prohibition of illegal gambling businesses), sections 2314 and 2315 (relating to interstate transportation of stolen property), sections 2341-2346 (relating to trafficking in contraband cigarettes), sections 2421-24 (relating to white slave traffic), (C) any act which is indictable under title 29, United States Code, section 186 (dealing with restrictions on payments and loans to labor funds), or (D) any offense involving fraud connected with a case under title 11, fraud in the sale of securities, or the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in narcotic or other dangerous drugs, punishable under any law of the United States;
[16] 18 U.S.C. section 1341 sets forth the elements of mail fraud; 18 U.S.C. section 1343 sets forth the elements of wire fraud. These crimes are made predicate acts under 18 U.S.C. section 1961(1)(B). 18 U.S.C. section 1961(1)(D) defines racketeering activity to include fraud in the sale of securities. See supra, n. 15.
[17] 18 U.S.C. ง 1341 reads: "Whoever, having devised or intending to devise any scheme or artifice to defraud ... for the purpose of executing such scheme or artifice or attempting so to do, places in any post office or authorized depository for mail matter, any matter or thing whatever to be sent or delivered by the Postal Service, or takes or receives therefrom, any such matter or thing, or knowingly causes to be delivered by mail according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, any such matter or thing, shall be fined ... or imprisoned ... or both."
[18] 18 U.S.C. Section 1343 provides:
Whoever, having devised or intending to devise any scheme or artifice to defraud ... transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined not more than $1,000, or imprisoned not more than five years, or both.
[19] But there is no requirement that a private RICO action can proceed only against a defendant who has been convicted of a predicate act, nor must the predicate acts be established beyond a reasonable doubt to recover under RICO. Sedima, S.P.R.L. v. Imrex Co., Inc., ___ U.S. ___, 105 S.Ct. 3275, 87 L.Ed.2d 346 (1985).
[20] This court does not follow the view adopted in Bache Halsey Stuart Shields, Inc. v. Tracy Collins Bank & Trust Co., 558 F.Supp. 1042, 1044-1047 (D.Utah 1983) that predicate acts of racketeering be alleged with enough specificity to show there is probable cause the crimes were committed. See also Medallion TV Enterprises v. SelecTV of California, 627 F.Supp. 1290, 1293 n. 4 (C.D.Cal.1986); Laterza v. American Broadcasting Co., Inc., 581 F.Supp. 408, 413 (S.D.N.Y. 1984); Taylor v. Bear Stearns & Co., 572 F.Supp. 667, 683 (N.D.Ga.1983). This approach has been cogently criticized by the Seventh Circuit in Haroco, Inc. v. American National Bank & Trust Co. of Chicago, 747 F.2d 384, 404 (7th Cir.1984), aff'd on other grounds, ___ U.S. ___, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985). See also Schnitzer v. Oppenheimer & Co., Inc., 633 F.Supp. 92, 96-97 (D.Ore.1985). The court believes that specificity of pleading equating to probable cause is not necessary in a civil RICO complaint. The court does conclude, however, that a RICO plaintiff should plead the facts constituting the predicate offense with the particularity required by Rule 9(b). Schnitzer v. Oppenheimer & Co., 633 F.Supp. at 96-97; Lewis v. Sporck, 612 F.Supp. 1316, 1324-1325 (N.D. Cal.1985).
[21] The court has reservations about the viability of plaintiffs' enterprise theory, however, and emphasizes that the proposed RICO enterprise allegation is sufficient only at the pleading stage of the litigation. This court follows the view expressed in Seville Industrial Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786 (3d Cir.1984), cert. denied, 469 U.S. 1211, 105 S.Ct. 1179, 84 L.Ed.2d 327 (1985) that for a RICO plaintiff to recover, he must prove 1) that the enterprise is an ongoing organization with some sort of framework or superstructure for making or carrying out decisions; 2) that the members of the enterprise function as a continuing unit with established duties; and 3) that the enterprise must be separate and apart from the pattern of activity in which it engages. Id. at 789-790. See also United States v. Turkette, 452 U.S. 576, 101 S.Ct. 2524, 69 L.Ed.2d 246 (1981); United States v. Riccobene, 709 F.2d 214 (3d Cir.), cert. denied sub nom., Ciancaglini v. United States, 464 U.S. 849, 104 S.Ct. 157, 78 L.Ed.2d 145 (1983). Although these three attributes need not be pleaded in order to state a cause of action, they eventually must be proved. Seville Industrial Machinery Corp. v. Southmost Machinery Corp., 742 F.2d at 790. Plaintiffs are admonished to continue their RICO claim only if they in good faith believe that through discovery they can establish fully each of the three requirements necessary to make their enterprise allegation succeed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558752/ | 644 F.Supp. 38 (1986)
ST. PAUL FIRE AND MARINE INSURANCE COMPANY, Plaintiff,
v.
PROTECTION MUTUAL INSURANCE COMPANY, Defendant.
No. 83 Civ. 8554 (MJL).
United States District Court, S.D. New York.
January 27, 1986.
Greenhill, Speyer & Thurm by John M. Speyer, New York City, for plaintiff.
Rein, Mound & Cotton by Erica Bunin, New York City, for defendant.
MEMORANDUM OPINION AND ORDER
LOWE, District Judge.
This is an action between a landlord's insurance company and his tenant's insurer. *39 In a previous opinion[1] we granted summary judgment to the defendant and dismissed the action. Presently before the Court is plaintiff's timely motion to reargue pursuant to local rule 3(j). For the reasons stated below we grant reargument in part and upon reconsideration we adhere to our previous determination.
BACKGROUND
The facts were stated in our previous opinion and are repeated here only in the briefest detail. Familiarity with the previous opinion is assumed.
The dispute centers around commercial property in Manhattan. The property was held by Paul Saurel and the United States Trust Co. ("Trust") and was leased in part to Pellon Corporation ("Pellon") pursuant to a written lease. The plaintiff The St. Paul Fire and Marine Ins. Co. ("St. Paul") insured Trust's interest against fire loss. Protection Mutual Insurance Co., the defendant, ("Protection") issued a general business policy to Pellon protecting both the personalty and the betterments and improvements against loss including fire.
The building was swept by fire. Protection paid Pellon's claim for loss of personal property. Pellon then demanded that Trust make repairs pursuant to ¶ 9(b) of the lease which states:
If the demised premises are partially damaged or rendered partially unusable by fire or other casualty, the damages thereto shall be repaired by and at the expense of the Landlord and the rent until such repairs shall be substantially completed shall be apportioned from the day following the casualty according to the part of the premises which is usable.
When Trust failed to repair, Pellon brought an action against Trust and Trust impleaded St. Paul as a third-party defendant. St. Paul agreed to pay the loss, however, it demanded and received an "assignment" and "subrogation" of Pellon's "rights" against Protection. St. Paul then instituted this action asserting two principal claims. First it claimed that both policies were "excess" to each other and therefore under New York law each insurance company must bear a pro rata share of the loss. See Federal Ins. Co. v. Atlantic National Ins. Co., 25 N.Y.2d 71, 302 N.Y. S.2d 769, 250 N.E.2d 193 (1969). Second it claimed that it could sue Protection directly on the Protection policy, based on the assignment subrogation agreement.
In our previous opinion we granted summary judgment on the first claim because the double insurance rule does not apply when the insureds or the insurable interests differ. In the instant case the policies covered different parties and one policy protected a leasehold while the other protected an interest in fee simple. Nothing in the plaintiff's motion for reargument provides any basis for reconsideration of this holding. Accordingly we deny the motion to the extent that it seeks reconsideration of the grant of summary judgment on the first claim.
In the previous opinion we also granted summary judgment to the defendants on the second claim. We held that St. Paul could not recover against Protection as Pellon's subrogee because Pellon and Trust had contracted to shift the risk of loss to Trust.[2] In support of reargument St. Paul puts forth two contentions. First it points to a lease provision which it argues requires each party to look to its own insurance before seeking relief from the other party. Second, it claims that Protection forfeited any rights it may have against Trust as Pellon's subrogee by wrongfully denying Pellon's claim for betterments and *40 improvements. Because these contentions were not discussed in the previous opinion we grant reargument and upon reconsideration adhere to our previous conclusion.
DISCUSSION
St. Paul's first argument is based on paragraph 9(e) of the lease which states:
Nothing contained hereinabove shall relieve Tenant from liability that may exist as a result of damage for fire or other casualty. Notwithstanding the foregoing, each party shall look first to any insurance in its favor before making any claim against the other party for recovery of loss or damage resulting from fire or other casualty, and to the extent that such insurance is in force and collectible and to the extent permitted by law, Landlord and Tenant each hereby releases and waives all right of recovery against the other or anyone claiming through or under each of them by way of subrogation or otherwise. The foregoing release and waiver shall be in force only if both releasors' insurance policies contain a clause providing that such a release or waiver shall not invalidate the insurance and also provided that such a policy can be obtained without additional premiums.
St. Paul argues that this provision "unequivocally requires that aside from any other obligations of the landlord or tenant, each party is required to first look to any insurance in its favor, before looking to the other for a loss by fire." Memorandum in Support of Reargument at 6. This argument is without merit.
St. Paul would have us judge ¶ 9(e) without regard to the rest of the lease. When ¶ 9(e) is read in conjunction with the rest of ¶ 9 the plain meaning of the words dictate the conclusion that ¶ 9(e) does not even apply to the instant situation. Paragraph 9 contains numerous subparts which all deal with various fire related contingencies (e.g. partial damage, total destruction, etc.). Paragraph 9(b) (quoted fully above) unequivically states that fire damages shall be "repaired by and at the expense of the Landlord." Paragraph 9(e) begins "Nothing contained hereinabove shall relieve Tenant from liability that may exist as a result of damage for fire...." This sentence unquestionably refers to liability that the tenant may have under law for causing the fire (i.e. for intentionally or negligently causing the fire). This tort based liability has nothing to do with the contract liability which is imposed by the lease. Rather the clause was intended to make clear that the contractual shifting of liability does not affect any legal responsibility for the fire. The next sentence of ¶ 9(e) begins "[n]otwithstanding the foregoing each party shall look first to any insurance in its favor before making any claim against the other party for recovery of loss or damage resulting from fire...." The structure of the paragraph is such that "[n]otwithstanding the foregoing" refers to the first sentence of ¶ 9(e) not to ¶ 9(b). The requirement that the parties look to their own insurance before "... making any claim against the other party ..." refers to the "liability that may exist" under law. It cannot be read to alter the general contractual shifting of risk in ¶ 9(b). If it had been intended to alter ¶ 9(b) it would have been part of ¶ 9(b) or its own subparagraph rather than in the middle of ¶ 9(e) following a clause which preserves tenant's liability at law.
The second sentence of ¶ 9(e) must be read to modify the first sentence of ¶ 9(e). To construe the lease in any other way would not only defy a plain language reading of it but also would render ¶ 9(b) relatively meaningless. The requirement that the parties look to their own insurance before making a claim against the other applies only to tort based liability under the first sentence of ¶ 9(e), not to liability under the lease/contract generally.[3]
*41 St. Paul's second ground for reargument is that the Protections' "denial" of Pellon's claim for the betterments and improvements broke the "chain" of liability discussed in our previous opinion. It argues that the settlement effectively resolved Pellon's claim against Trust, thereby estopping Protection from claiming Pellon's rights under the lease. St. Paul contends that the settlement did not breach the insurance contract because the "denial" of Pellon's claim estopped Protection from asserting the defense of destruction of its subrogation rights. Plaintiff's Memo at 5.
As an initial matter we note that on the record before us it does not appear that Protection denied Pellon's claim. Protection argues persuasively that it cannot be said to have denied the claim because no formal claim was ever filed with Protection. (See affidavit of Erica Brunin and exhibit "D" attached thereto.) While there were undoubtedly considerable discussions between Pellon and Protection about the betterments and improvements, Pellon chose to press its contract claim against Trust rather than pressing its insurance claim against Protection. That Protection may have cajoled Pellon to so act is irrelevant. As the Court in Patent Scaffolding Co. v. William Simpson Construction Co., 256 Cal.App.2d 506, 64 Cal.Rptr. 187 (1967) noted in regards to this type of case:
The result ... does not have the symmetry of perfect justice. The result, however, is not materially different from many other situations in which a person who has suffered a loss for which more than one person is liable may select one from their number to satisfy the obligation, thereby relieving the remaining parties of their liability.
Id., 64 Cal.Rptr. at 194-195 (footnote omitted).
Moreover, Protection did not officially deny the claim but rather it indicated that it would not address the claim. While St. Paul correctly points out that the long delays in processing a claim may have the same effect as denial of the claim, the Court does not believe that that is the case at bar.
Even assuming that St. Paul could prove that Protection denied the claim, the settlement agreement between Trust and Pellon cannot be said to break the chain of liability. A release given by an insured (Pellon) does not destroy the insurer's (Protection's) right to subrogation when the released parties (Trust and St. Paul) were on notice that the insurer (Protection) would claim rights by subrogation. Government Employees Insurance Co. v. Halfpenny, 103 Misc.2d 128, 425 N.Y.S.2d 212 (Sup.Ct.N.Y.Co.1980). In the case at bar, St. Paul was painfully aware that Protection was relying on the lease provision and that in this litigation it would, as it did, argue that the landlord is liable for the loss. We do not believe that Protection "denied" any claim, but even if it did, Protection's right to subrogation of Pellon's rights under the lease were preserved. As Judge Broderick of this Court held in Atlantic Richfield Co. v. Interstate Oil Transport Co., 505 F.Supp. 840, 843 n. 7, (S.D.N.Y.1981), the right of subrogation "requires payment of a debt for which another is primarily responsible." In the case at bar Protection is not primarily responsible for the debt, rather, Trust on its lease and St. Paul on its policy are primarily responsible for the debt.
St. Paul objects to consideration of the lease based on the 1947 case of Alexandra Restaurant v. New Hampshire Ins. Co., 272 A.D. 346, 71 N.Y.S.2d 515 (1st Dept. 1947), aff'd, 297 N.Y. 858, 79 N.E.2d 268, (1948). It argues that under Alexandra the lease provisions are irrelevant to liability under an insurance policy. In Alexandra an insured tenant sued his own insurer for fire loss. The insurer resisted on the grounds that the lease involved provided that the landlord bear the loss. The Appellate Division held that the tenant *42 could recover regardless of the lease provision.
We have no trouble agreeing with the principal espoused in Alexandra. Had Pellon sued Protection we would undoubtedly have held for Pellon, however, in the instant case Pellon chose to pursue its contract rights under the lease. The basis of our previous holding was that had Pellon chosen to do exactly that sue Protection Protection would recover against Trust by subrogation. The Alexandra decision implicitly recognizes that tenant's insurer may have subrogation rights against the landlord. 71 N.Y.S.2d at 521. The Appellate Division simply chose not to reach the question of subrogation at that time. It reasoned that until the insurer paid the claim the subrogation was not triggered. Alexandra certainly cannot be read to say that the contractual shifting of risk in the lease is irrelevant to the ultimate distribution of loss. To the contrary it is fully consistent with the basis of our holding. The distinction is that in Alexandra the insured himself a party who bore no liability brought the action. In the case at bar, to the contrary, the party bringing the action has agreed bear all the liability.
The decision in California Food Service Corp. v. Great American Insurance Co., 130 Cal.App.3d 892, 182 Cal.Rptr. 67 (Ct. App.1982) properly holds that the lease agreement ultimately sets the rights of the parties. In that case the tenant's insurer paid a fire loss. Then the tenant and its insurer sued the sub-tenant on a provision of the sublease which called for the subtenant to bear the risk of fire loss. The subtenant settled the action by assigning its rights against its insurer to the tenant. The Court held that the subtenant's insurer "would only be liable if [tenant had] an enforceable contractual claim against [subtenant].... Simply put, if [tenant] had no valid claim against [subtenant, subtenant] had no valid claim against its insurer." Id., 182 Cal.Rptr. at 71 (emphasis added). Later the court reaffirmed that the lease establishes the relative liabilities. It stated "We take care to again point out, however, that the relevant contract for these purposes is the one between [tenant] and [subtenant], which establishes [subtenant's] liability...." Id., 182 Cal.Rptr. at 72 n. 3.
While this case has proven somewhat complex, we must adhere to our previous conclusion:
In the final analysis Trust and Pellon contracted in good faith by lease that Trust should bear the risk of fire loss to the premises. St. Paul and Trust in turn contracted to shift the risk to St. Paul by way of [its] insurance policy. St. Paul received valuable consideration for assuming the risk. It may not now avoid the liability which it willingly contracted to accept.
607 F.Supp. at 392.
CONCLUSION
The Court grants in part the motion for reargument, and upon reconsideration it adheres to its previous determination.
It Is So Ordered.
NOTES
[1] 607 F.Supp. 388 (1985).
[2] In essence we imposed an equitable bar to the action because liability ultimately rested with St. Paul. Another way to reach the same outcome is to analyze the case from the question of damages. St. Paul's second claim is essentially one to enforce Protection's insurance contract. Generally, in contract, damages are only available for actual loss. Since St. Paul agreed to accept the risk of fire and in fact is ultimately liable for the loss it cannot claim to have suffered any loss. As a matter of law St. Paul cannot prove any damages and, thus, it fails to state a claim.
[3] It is at least interesting to note that an internal memorandum of Trust's management Co. explicitly recognized that Landlord is liable for fire damage. The management firm is experienced in lease negotiation and insurance practices. The memo stated in part:
Article 9 of the standard Real Estate Board Loft Lease, now in use, dictates that the landlord is responsible for repairs resulting from fire damage including the tenants' own improvements and betterments.
I recommend that future leases be modified so that each tenant is responsible for his own improvements and betterments. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1644906/ | 994 So.2d 1106 (2008)
YOUNG
v.
AUTO-OWNERS INS. CO.
No. SC08-871.
Supreme Court of Florida.
October 13, 2008.
Decision without published opinion. Rev.denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858150/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-93-002-CV
DARELD RAY MORRIS, II,
APPELLANT,
vs.
NEALA STACY LYYTINEN,
APPELLEE
FROM THE DISTRICT COURTS OF BASTROP COUNTY, 21ST & 335TH JUDICIAL DISTRICTS
NO. 16,115, HONORABLES JOHN L. PLACKE & HAROLD R. TOWSLEE, JUDGES PRESIDING
Dareld Ray Morris, II, took a separate appeal from each of two trial-court orders
issued in a suit affecting the parent-child relationship ("SAPCR"). Tex. Fam. Code Ann.
§ 11.01(5) (West Supp. 1993) ("Family Code"). The appeals have been consolidated. The first
trial-court order increases his child-support obligation on the motion of his former wife. See
Family Code § 14.08(c)(2) (West Supp. 1993). The second order reduces his support arrearage
to judgment and holds him in contempt for failing to pay it. See Family Code §§ 14.40-.41 (West
1986 & Supp. 1993). We will reverse the first order and remand that portion of the cause to the
trial court; we will affirm that part of the second order reducing the arrearage to judgment; and
we will not address Morris's complaint of unlawful imprisonment resulting from the contempt
order.
THE CONTROVERSY
Morris and Neala Stacy Morris Lyytinen ("Lyytinen") were divorced in Bastrop
County on August 24, 1981. Lyytinen received custody of their two children, and the court
ordered Morris to pay $100 per month in child support. Subsequently, Morris moved to Florida.
He became delinquent in the support payments. Lyytinen and the children moved to Minnesota.
In April 1991, Lyytinen sued Morris in a Florida court under the Revised Uniform
Reciprocal Enforcement of Support Act ("RURESA"). Fla. Stat. Ann. §§ 88.011-.371 (West
1987 & Supp. 1993). (1) The Florida court adjudged as follows: (1) Morris owed $2,607.91 under
the Bastrop County court order as of March 26, 1991; (2) he was in contempt of court for failing
to pay such child support; and (3) he might purge himself of contempt by paying specified sums
periodically to the county clerk of the Florida court. Morris made several payments in compliance
with the Florida court order.
Some months later, Lyytinen and the children moved back to Texas. On April 3,
1992, she filed a motion to modify child support in a SAPCR in Bastrop County district court,
the court with continuing and exclusive jurisdiction. Family Code § 11.05(a) (West Supp. 1993).
She requested that the court increase child support from $100 to $1,000 per month. Morris was
not present at the hearing on August 12th, but was represented by counsel. After the hearing, the
district court ordered that Morris pay child support in the amount $ 1,000 per month.
CHILD-SUPPORT INCREASE
In his fifth point of error, (2) Morris contends the trial court abused its discretion in
setting the amount of child support at $1,000 per month. We agree.
An order of child support will not be disturbed on appeal unless the complaining
party can show a clear abuse of discretion. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex.
1990) (citations omitted). The two-part test for "abuse of discretion" is (1) whether the trial
court's exercise of discretion was legally erroneous; and (2) if it were, whether the impact of the
error on the case requires reversal. Landon v. Jean-Paul Budinger, Inc., 724 S.W.2d 931, 937
(Tex. App.--Austin 1987, no writ). A court's exercise of discretion may constitute legal error
when the court lacks a sufficient factual basis upon which to make a rational decision. Reyna v.
Reyna, 738 S.W.2d 772, 774 (Tex. App.--Austin 1987, no writ); Landon, 724 S.W.2d at 938.
In order to modify a previous child-support order, the court must find that the
circumstances of the child or a person affected by the order have materially and substantially
changed since rendition of the order. Family Code § 14.08(c)(2) (West Supp. 1993). (3) In
modifying the amount of support, the trial court should be guided by the Child Support Guidelines
in the Family Code. (the "guidelines"). Family Code § 14.052(a) (West Supp. 1993). (4) An order
of support under the guidelines should be based on the net resources of the obligor and the
obligee. Family Code § 14.053(a) (West Supp. 1993). Additionally, the court should consider
such other factors as (1) the needs of the child; (2) the ability of the parents to contribute to the
support of the child; (3) any financial resources available for the support of the child; and (4) the
amount of possession of and access to the child. Family Code § 14.052(b) (West Supp. 1993).
The court may set the amount of support outside the range recommended by the guidelines if other
relevant factors justify a variance. Family Code § 14.054 (West Supp. 1993).
In the present case, the evidence consisted solely of Lyytinen's testimony.
Concerning the children, she testified that they were eleven years older than at the time of the
divorce. In regard to Morris, Lyytinen stated he had graduated from medical school, and had
completed his medical residency in Florida. She made no assertions concerning his present
employment. She did testify to a conversation with Morris in which he told her that, after
graduating from medical school, he would be able to go into practice with his father and brother,
would "have it made financially," and that his income would be "in the neighborhood of
$200,000" per year. She conceded she did not know, however, whether Morris was licensed to
practice medicine, and did not have any personal knowledge of Morris's current income.
Lyytinen gave no evidence about her own financial situation.
We find the record contains no evidence pertaining to Morris's or Lyytinen's net
resources, their ability to contribute to the children's support, the needs of the children, or any
of the other statutory factors. Section 14.053(g) of the Family Code provides that the court shall
require such information of the parties in order that the court may accurately estimate their net
resources and ability to provide child support, and should request tax returns, financial statements
and current pay stubs. Without any of this information, the trial court lacked a sufficient factual
basis upon which to establish rationally the amount of Morris's child-support obligation. The
fixing of that obligation at $1,000 per month was, therefore, an abuse of discretion requiring
reversal of the trial-court order and remand of the cause. Reyna, 738 S.W.2d at 774; Landon,
724 S.W.2d at 938. We sustain Morris's fifth point of error.
In light of our disposition of point five, we do not address points one, two, three,
four and six pertaining to the order increasing child support.
ENFORCEMENT ORDER
On the day of the hearing on the motion to modify, Lyytinen filed a motion to
enforce the original child-support order in Bastrop County district court. She requested that the
court hold Morris in contempt for failing to make numerous child-support payments and requested
that the arrearage be reduced to judgment. See Family Code § 14.313 (West Supp. 1993)
(allowing party seeking enforcement of support order by contempt to join claim to reduce
arrearage to judgment); see also Family Code § 14.41 (West 1986 & Supp. 1993) (providing for
judgment for past-due child support payments). Morris was present for the subsequent hearing
on October 8th. The court found him in contempt for failure to pay support in accordance with
the original support order. Further, the court rendered judgment against Morris for child-support
arrearage in the amount of $8,010 for the period September 1, 1984, through August 1, 1992.
The court committed Morris to jail for sixty days, or until he paid Lyytinen the support arrearage,
costs and attorney's fees. After six days in jail, Morris was released after paying $1,897 of the
support arrearage, plus costs and attorney's fees. We assume for purposes of discussion that he
remains in constructive contempt.
Morris raises four points of error concerning the enforcement order. He complains
in his first three points that the trial court erred by holding him in contempt. We do not have
jurisdiction to review a finding of contempt other than by an application for writ of habeas corpus.
Wagner v. Warnasch, 295 S.W.2d 890, 893 (Tex. 1956); Saenz v. Saenz, 756 S.W.2d 93, 95
(Tex. App.--San Antonio 1988, no writ). (5) Therefore, we do not address Morris's first, second and
third points of error regarding the district court's contempt finding.
Morris complains in his fourth point of error that the district court erred in its
determination of the amount of child-support arrearage. We may exercise appellate jurisdiction
over portions of the enforcement order other than the finding of contempt. See, e.g., Gawlik v.
Gawlik, 707 S.W.2d 256, 257-59 (Tex. App.--Corpus Christi 1986, no writ) (noting that contempt
finding was not appealable, but addressing trial court's modification of support, determination of
arrearages and refusal to order involuntary assignment of wages); Holder v. Holder, 528 S.W.2d
113, 115 (Tex. Civ. App.--Tyler 1975, no writ) (dismissing points of error relating to contempt
finding, and addressing point concerning judgment for delinquent support). Morris contends that
the Florida court's determination of arrearage supersedes the original support order to the extent
there is a conflict. He argues, therefore, that the court should not have re-calculated Morris's
arrearage under the original support order. We disagree.
A RURESA proceeding is a remedy in addition to, not in lieu of, existing remedies.
Fla. Stat. Ann. § 88.012 (West Supp. 1993). A support order issued pursuant to RURESA does
not nullify any other support order unless it specifically so provides. Fla. Stat. Ann. § 88.281
(West 1987). In this case, the Florida court order did not purport to supersede or nullify the
original Texas support order.
Moreover, the Florida court's establishment of support arrearage under RURESA
does not affect the original Texas support decree. See Florida Dept. of Health and Rehab. Servs.
v. Cifneri, 429 So. 2d 92, 94 (Fla. Dist. Ct. App. 1983). In Cifneri, the court held that a Florida
court's decision to enforce a lesser amount of monthly support under RURESA than provided for
in the original, out-of-state divorce decree would have no effect on the original decree. Id.
Arrearages would continue to accumulate under the original decree, with appropriate credit for
payments made in accordance with the Florida order. Id.; see also State v. Borchers, 805 S.W.2d
880, 881-82 (Tex. App.--Corpus Christi 1991, writ denied) (interpreting RURESA as
contemplating the contemporaneous existence of two valid support orders).
Therefore, the existence of the Florida RURESA order does not preclude an action
to enforce the original Texas support order. The trial court correctly based its arrearage
determination on the original support order. See Borchers, 805 S.W.2d at 882 (holding the trial
court erred in calculating arrearage based on a Texas RURESA order instead of on the original
support order). We overrule Morris's fourth point of error.
In his fifth point Morris contends the trial court erred in refusing to impose
sanctions against Lyytinen and her attorney pursuant to Texas Rule of Civil Procedure 13. Rule
13 provides that when attorneys or parties sign a pleading they certify thereby that the pleadings
are not groundless and not brought for the purpose of harassment. Morris alleges that in the
motion for enforcement, Lyytinen and her attorney falsely claimed that Morris was in arrears in
the amount of $12,400 because that amount fails to credit him with certain payments he made
previously. At the beginning of the hearing on the motion for enforcement, Lyytinen
acknowledged these payments and waived her claims concerning those amounts. She requested
judgment for $8,010 in support arrearage. The amount requested for damages does not constitute
a violation of Rule 13. Tex. R. Civ. P. 13. We overrule Morris's fifth point of error.
We therefore (1) reverse the trial-court order fixing Morris's child-support
obligation at $1,000 per month, and remand that portion of the cause to the trial court for further
proceedings; (2) affirm the trial-court order that fixes Morris's arrearage in child support at
$8,010 for the period September 1, 1984, through August 1, 1992; and (3) do not address
Morris's complaint regarding that element of the trial-court order holding him in contempt.
John Powers, Justice
Before Justices Powers, Jones and Kidd
Reversed and Remanded in Part; Affirmed in Part
Filed: November 10, 1993
Do Not Publish
1. A majority of states, including Texas, have also enacted RURESA. Family Code
§§ 21.01-.43 (West 1986 & Supp. 1993); see also Table of Jurisdictions Wherein Act Has Been
Adopted located before section 21.01 of the Family Code.
2. 2 In two separate briefs, Morris raises six points of error concerning the order increasing child
support and five points relating to the enforcement order. In order to avoid confusion over the
duplicate numbering of the points, we will address each set under headings indicating the court
order to which the points pertain.
3. 3 Since no findings of fact and conclusions of law were requested or filed, it is implied that
the trial court made all findings necessary to support its judgment. Worford v. Stamper, 801
S.W.2d 108, 109 (Tex. 1990). In his first and second points of error Morris attacks the legal and
factual sufficiency of the evidence to support the trial court's implied finding of a material and
substantial change in circumstances. Because we hold that the trial court abused its discretion in
establishing the amount of support, we assume without deciding that the evidence was legally and
factually sufficient to support the implied finding.
4. 4 Although the original support order was issued in 1981 before the enactment of the Child
Support Guidelines in 1989, section 14.052(a) provides that the guidelines are intended to guide
the courts in any SAPCR including, without limitation, actions involving modification.
Additionally, the court may consider the guidelines in making the threshold determination of
whether there has been a material and substantial change in circumstances. Family Code
§ 14.056 (West Supp. 1993).
5. 5 There is a narrow exception to this rule. An appellate court has jurisdiction to suspend
portions of a contempt order that purport to grant relief beyond the scope of the proceedings by
modifying previous orders in the absence of appropriate pleadings and proof. Stephens v.
Stephens, 543 S.W.2d 686, 688 (Tex. Civ. App.--Houston [1st Dist.] 1976, no writ); see also
Martin v. Martin, 519 S.W.2d 900, 902 (Tex. Civ. App.--Houston [1st Dist.] 1975, no writ)
(suspending portions of contempt order purporting to modify custody and visitation privileges).
The exception is not applicable in this case. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2858043/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-192-CR
RICHARD O. BATES,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 147TH JUDICIAL DISTRICT
NO. 911,575, HONORABLE WILFORD FLOWERS, JUDGE PRESIDING
PER CURIAM
Appellant, after a plea of not guilty, was found guilty by a jury of the offense of
indecency with a child. Tex. Penal Code Ann. § 21.11(a)(1) (1981). The trial court assessed
punishment, enhanced by two previous felony convictions, (1) at seventy-five years' imprisonment.
In one point of error, appellant asserts he was denied effective assistance of counsel in violation
of the sixth amendment to the United States Constitution. We will affirm the judgment of
conviction.
To prevail on his ineffective assistance claim, appellant must show: (1) that
counsel's performance was deficient, in that counsel made such serious errors she was not
functioning effectively as counsel; and (2) the deficient performance prejudiced the defense to such
a degree that appellant was deprived of a fair trial. Strickland v. Washington, 466 U.S. 688
(1984); Hernandez v. State, 726 S.W.2d 53, 57 (Tex. Crim. App. 1986). In deciding an
ineffectiveness claim this court must judge the reasonableness of counsel's challenged conduct on
the facts of the particular case, viewed at the time of counsel's conduct. Appellant must identify
the acts or omissions of counsel that are alleged not to have been the result of reasonable
professional judgment. The court must then determine whether, in light of all the circumstances,
the identified acts or omissions were outside the wide range of professionally competent
assistance. Strickland, 466 U.S. at 690. "Prejudice" is demonstrated when the convicted
defendant shows that there is a reasonable probability that, but for counsel's unprofessional errors,
the result of the proceeding would have been different. A reasonable probability is a probability
sufficient to undermine confidence in the outcome. Id. at 694; Ex parte Guzmon, 730 S.W.2d
724, 733 (Tex. Crim. App. 1987). It is appellant's burden to prove an ineffective- assistance
claim. Moore v. State, 694 S.W.2d 528, 531 (Tex. Crim. App. 1985).
Appellant asserts he was denied effective assistance of counsel because his trial
counsel failed to advance the defense of promiscuity when she released two defense witnesses
from their subpoenas.
The statute under which appellant was convicted provides a promiscuity defense.
Tex. Penal Code Ann. § 21.11(b) (1989). (2) Defense counsel first attempted to elicit testimony
related to a promiscuity defense during an initial hearing on the State's motion in limine. In its
motion, the State had included the following request:
NOW COMES the State of Texas by and through the undersigned Assistant
District Attorney, and requests the Court to instruct counsel for the Defendant, the
Defendant, and all witnesses called to testify by the Defendant not to refer to,
mention, ask about, or allude to, either directly or indirectly, without first having
taken up the matter with the Court out of the presence of the jury the following:
17. Any evidence of or reference by defense counsel (including
voir dire examination and cross-examination), to previous sexual
conduct of any State's witness including references/evidence
pertaining to the pregnancy of the complaining witness, [name
omitted], without first approaching the bench;
Defense counsel specifically objected to this request and the trial court held a hearing outside the
presence of the jury to hear evidence related to item number 17.
First, the court heard the complainant testify, on direct examination by the State,
that she had engaged in no prior sexual contact or conduct of any kind before the date of the
alleged offense, July 17, 1989. She testified to having sexual intercourse after the date of the
offense with one Dominique Romo, by whom she had a child.
On cross-examination of the complainant, defense counsel elicited the following
testimony relative to the promiscuity defense:
Q: When did you begin dating boys?
A: When I was 16.
Q: Sixteen?
A: Yes.
Q: Did you ever know someone by the name of Alex Arellano?
A: Yes.
Q: And did you have occasion to date him or go places with him before the age
of 16?
A: No.
Q: You never had any sexual contact with him?
A: No.
Q: Did you have occasion to know Charles Arellano?
A: Yes.
Q: And did you date him in any respect?
A: No.
Q: Never had any sexual contact with him?
A: No.
At the conclusion of complainant's testimony, defense counsel informed the court
that she had no further witnesses at that time, but that two subpoenaed defense witnesses, Alex
and Charles Arellano, were to be attached. The trial court issued a preliminary ruling disallowing
the testimony regarding complainant's sexual behavior after the date of the alleged offense since
the promiscuity defense is specifically limited to a complainant's sexual contacts or conduct before
the date of the alleged offense.
After the State rested its case in chief and the defense concluded examining the
complainant on recall, a second hearing to consider item number 17 of the State's motion in limine
was held outside the presence of the jury. Defense counsel called Charles Arellano. On direct
examination, Charles testified that when he lived on Prado Street two years earlier, and before
the date of the alleged offense, he had known the complainant and her family. He further testified
that he had never gone out with the complainant. However, his friends Andrew Castillo, Tony
Romo, and Andrew's cousin, Bebe, had gone out with her. In response to defense counsel's
questioning, Charles further testified that Castillo, Romo and Bebe had each told him they had
been "to bed with" the complainant.
Defense counsel next called Alex Arellano, who had also lived on Prado Street until
1987 and had known the complainant at that time. Alex testified that on one occasion when he
and the complainant were eleven or twelve years old, he had intercourse with the complainant.
He also testified that Pete Rodriguez and Andrew Castillo told him "they had like relationship with
her or they used to mess around with her and stuff like that."
The State objected to admission of the Arellanos' testimony in part, as follows:
It is our position that anything other than that one encounter [with Alex Arellano]
would be inadmissible hearsay. No witnesses have any personal knowledge of
anything else. We limit ourselves to that one individual incident, and our position
on that is two things: First of all, a single act with one person in the past does not
rise to promiscuity and there is [sic] cases on that.
The Court ruled, "I find that one act is all that I have heard any testimony or evidence on, and
that is not promiscuous behavior, assuming it is true."
Defense counsel requested the opportunity to subpoena two of the witnesses named
as having had relations with the complainant. After defense counsel advanced this request a
second time, in a request for a continuance, the trial court granted defense counsel's request to
allow the defense time to locate the two witnesses.
The next morning defense counsel informed the court:
Your Honor, we did locate the witnesses and I spoke with both of them, and they
indicated they were aware of what the case was about and they had spoken with
[the complainant] and they were unwilling to testify against her; therefore, I
released them from their subpoena.
Appellant's ineffective assistance claim rests on counsel's decision to release the
witnesses from their subpoenas. Counsel is strongly presumed to have rendered adequate
assistance and to have made all significant decisions in the exercise of reasonable professional
judgment. Strickland, 466 U.S. at 690. Looking at the totality of the circumstances at the time
of counsel's conduct, we cannot say the decision to release the witnesses was not based on sound
trial strategy. This is not a situation where trial counsel wholly failed to pursue a promiscuity
defense, or pursued it half-heartedly.
The record reflects that appellant's trial counsel attempted to develop testimony
sufficient to raise a promiscuity defense. The two incidents of sexual conduct adduced, however,
were excluded, one because it occurred after the date of the alleged offense and therefore beyond
the time frame for which the defense applies; the other because it was evidence of only one
previous act, which the court ruled did not rise to the level of promiscuous conduct. Appellant's
trial counsel also twice requested, and ultimately obtained from the trial court, time to locate two
of the witnesses named by Arellanos as having engaged in sexual relations with the complainant
before the date of the alleged offense. Appellant's trial counsel subsequently located and
interviewed the two witnesses. After talking to them, she elected to release them from their
subpoenas.
It would be unreasonable to presume that appellant's counsel learned of testimony
supporting the defense and elected not to call the witnesses simply because "they were unwilling
to testify," especially in light of the fact that she had the power to compel their testimony if she
wished (they were under subpoena) and because she had previously attached two witnesses under
subpoena when they failed to appear. Rather, it is reasonable to presume, instead, that counsel
determined that the witnesses had no testimony to offer in support of the defensive theory or that
their testimony would be harmful to the appellant.
Appellant has not met his burden of proof to show ineffective assistance. He has
not demonstrated that counsel's decision to release the witnesses from their subpoena was error,
much less that it prejudiced him. In light of all the circumstances related to defense counsel's
conduct in developing and pursuing the promiscuity defense, we conclude that her acts do not fall
outside the wide range of professionally competent assistance, but instead evidence a valid
exercise of trial strategy. That another attorney might have taken different action at trial will not
support a finding of ineffectiveness. Walston v. State, 697 S.W.2d 517, 519 (Tex. App. 1985,
pet. ref'd). Counsel's performance was not deficient and appellant was not deprived of a fair
trial.
We overrule appellant's point of error and affirm the judgment of conviction.
[Before Chief Justice Carroll, Justices Aboussie and Kidd]
Affirmed
Filed: January 22, 1992
[Do Not Publish]
1. Appellant's prior felony convictions are for attempted sexual abuse and arson.
2. Section 21.11(b) provides:
It is a defense to prosecution under this section that the child was at the time of
the alleged offense 14 years or older and had, prior to the time of the alleged
offense, engaged promiscuously in:
(1) sexual intercourse;
(2) deviate sexual intercourse;
(3) sexual contact; or
(4) indecent exposure as defined in Subsection (a)(2) of this section.
(emphasis added). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2858065/ | Tanksley v. State
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-082-CR
NORMAN TANKSLEY,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF BELL COUNTY, 264TH JUDICIAL DISTRICT
NO. 39,603, HONORABLE RICK MORRIS, JUDGE
PER CURIAM
A jury found appellant guilty of two counts of burglary. Tex. Penal Code Ann.
§ 30.02 (1989). After finding that appellant had been previously convicted of four felony
offenses, the trial court assessed punishment for each count at life imprisonment. We will affirm
the conviction.
In points of error one and two, appellant challenges the sufficiency of the evidence
to support his conviction of each count. The two counts of the indictment charged appellant with
burglarizing two separate buildings on August 24, 1990. On appeal, the court views the evidence
in the light most favorable to the verdict to determine whether any rational trier of fact could have
found the essential elements of the offense beyond a reasonable doubt. Jackson v. Virginia, 443
U.S. 307 (1979); Humason v. State, 728 S.W.2d 363 (Tex. Cr. App. 1987). In addition, a
conviction based on circumstantial evidence must exclude every other reasonable hypothesis
except the guilt of the accused. Carlsen v. State, 654 S.W.2d 444 (Tex. Crim. App. 1983)
(opinion on rehearing). (1)
Between 5:30 and 6:00 a.m. on August 24, 1990, Beverly Sedberry, a cab driver,
was dispatched to Hack's Mens Store in downtown Killeen. Appellant was standing on the corner
by Hack's when she arrived, and he asked her to pull into a nearby alley. Sedberry refused to
drive into the alley, but agreed to park next to it. From a pile of items stacked against the wall
in the alley, appellant began to carry armfuls into the back seat of the cab. Sedberry noticed that
clothing which was being loaded into her cab still had the price tags on it. When she remarked
on its newness, appellant said, "Oh, my-- my o'lady threw me out, you know, and I-- I have to
have a ride. I was waiting for my friend, you know." Sedberry asked if the items were stolen,
but appellant replied, "No, this belongs to me." Appellant claimed that all of it belonged to him.
Just before 6:00 a.m. on August 24, Officer Carey was summoned to the
investigation of a burglary at the German Restaurant in downtown Killeen. While driving to the
restaurant, Carey noticed a cab standing by the entrance to an alley and appellant making several
trips from the side of a building to the back of the cab; appellant was picking up bundles and
putting them in the cab. As he passed, Carey saw a pile of objects stacked up against one of the
walls. The alley connected to an entrance that led to the German Restaurant.
Deciding to investigate, Officer Carey parked his car behind the taxi. As appellant
was making another trip to the pile, Carey got out and announced that he was a police officer.
Appellant dropped his items and ran down the alley. Carey chased appellant on foot, and Sgt.
Jenks, who joined the chase, caught appellant and took him into custody.
Officer Carey began to investigate the origin of the property appellant was loading
into the cab. The back of the cab was full of clothing and miscellaneous items, and there were
still items against the wall. Among these, he observed some clothing, two portable radios, and
a black case. Officers identified all property recovered at the scene as belonging to either the
German Restaurant or Balfour's Mens Wear in Killeen.
Officer Carey testified that a metal stairway leads up the back of Hack's Mens
Wear to the rooftop; from Hack's rooftop, one can walk to the rooftop of Balfour's Mens Wear,
a building in the same block. Balfour's roof was made of wood overlaid with tar. Officers Carey
and Ortiz found a hole in the roof of Balfour's which opened directly into the inside of the store.
Officer Carey found that the German Restaurant had been entered by pushing in
a plexiglass section of the front door and then replacing it.
When Officer Carey opened the black case lying in the pile next to the building,
he found a hammer inside; adhered to the claw of the hammer was what appeared to be roofing
tar. Other items he found in the case included several sets of channel locks, pliers, and a
screwdriver with a black substance on it. The black case belonged to Erika Karp, the owner of
the German Restaurant. Karp kept the case in a storage area of the restaurant, and she kept the
hammer, screwdriver, channel locks, and pliers in a box under the counter of the restaurant.
Margrit Galindo, who was in charge of the German Restaurant on August 24, testified that no
black substance was on either the hammer or the screwdriver when it was in the restaurant.
Levi Balfour, owner of Balfour's Mens Wear, testified that when he closed his shop
the night of August 23, the hole in the roof was not there. When he arrived at his store about
6:30 a.m. on August 24, he noticed the hole and found items of clothing strewn about the floor.
Balfour saw items from his store in the taxi and in the pile, including his "boom box," suits, silk
shirts, underwear, and shoes.
Balfour and Karp testified that they did not give appellant permission to enter their
buildings while they were closed to the public during the night of August 23, 1990, and the
morning of August 24.
A permissible inference of a defendant's guilt of burglary arises from his possession
of property taken in a recent burglary. Hardesty v. State, 656 S.W.2d 73 (Tex. Crim. App.
1983). To warrant this inference, the defendant's possession must be personal, recent, and
unexplained, and the defendant must distinctly and consciously assert a right to the property.
Rodriguez v. State, 549 S.W.2d 747 (Tex. Crim. App. 1977). An inference of guilt of burglary
based on the defendant's possession of stolen goods does not arise if the stolen property is found
in a place where others had an equal right and facility of access. Id. The evidence here
showed that someone broke into Balfour's Mens Wear and the German Restaurant after they had
closed on August 23, 1990, and removed items from them; that appellant claimed ownership of
all the objects he was carrying from the pile to the taxi around 6:00 a.m on August 24; and that
police officers identified all these objects as coming from either Balfour's or the German
Restaurant. Appellant's flight from Officer Carey is also a circumstance indicating guilt.
Hardesty, 656 S.W.2d at 78. The evidence rebuts appellant's explanation that he was moving the
property after his wife made him leave the house.
The hypothesis that another person stole the items from the two buildings and left
them in the alley, where appellant found and took them, is based on no evidence in the record and
is not a reasonable hypothesis. Because the evidence is sufficient to sustain each conviction, we
overrule points one and two.
In points of error three and four, appellant contends that the trial court erred in
overruling his motion for continuance and his motion for new trial based on the motion for
continuance. Appellant moved for a continuance to obtain documents from a federal suit he had
filed.
Appellant filed the first motion for continuance five minutes before his case was
called for trial and filed a second motion after the jury was selected and sworn. The motions for
continuance filed the day trial began do not show the diligence required to support a continuance.
Kelly v. State, 471 S.W.2d 65 (Tex. Crim. App. 1971).
In his second motion for continuance, appellant alleged that he filed the federal
complaint against officers of the Killeen Police Department because he was assaulted. He alleged
that the court documents would show that he fled police officers on August 24, 1990, because he
feared another assault by Officer Paul Carey. Sufficient cause to justify a continuance must be
fully set forth in the motion. Tex. Code Crim. Proc. Ann. art. 29.03 (1989). Appellant did not
show by affidavit or evidence the specific facts he sought to prove. His averments were not
sufficient to show the materiality of the documents from the federal lawsuit. Palasota v. State,
460 S.W.2d 137 (Tex. Crim. App. 1970).
At the hearing on appellant's motion for new trial, appellant made no showing
under oath from any source as to what the court documents would show. Gonzales v. State, 505
S.W.2d 819 (Tex. Crim. App. 1974). The trial court properly overruled appellant's motions for
continuance and new trial. We overrule points three and four.
The judgment of conviction is affirmed.
[Before Justices Powers, Jones and B. A. Smith]
Affirmed
Filed: January 8, 1992
[Do Not Publish]
1. 1 Carlsen has recently been overruled by Geesa v. State, No. 290-90 (Tex. Crim. App. Nov.
6, 1991). Geesa's effect is limited to those cases tried after November 6, 1991. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2858079/ | Guerrero-Ramirez v. TSBME
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-93-204-CV
LUIS E. GUERRERO-RAMIREZ, M.D.,
APPELLANT
vs.
TEXAS STATE BOARD OF MEDICAL EXAMINERS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT
NO. 92-07376, HONORABLE JERRY DELLANA, JUDGE PRESIDING
The Texas State Board of Medical Examiners ("the Board") issued an order
revoking Luis Guerrero-Ramirez's license to practice medicine on April 9, 1992. Guerrero
sought judicial review of the order in district court. The district court affirmed the order and
Guerrero has appealed to this court. We will affirm.
BACKGROUND
In a formal complaint filed on July 25, 1991, the Board charged Guerrero with five
separate violations of the Medical Practice Act. Tex. Rev. Civ. Stat. Ann. art. 4495b (West
Supp. 1993) ("Medical Practice Act"). The complaint charged Guerrero with (1) directly or
indirectly aiding or abetting the corporate practice of medicine by the Human Relations Institute,
a provider of psychological services that was not duly licensed to practice medicine; (2)
fraudulently billing insurance companies for services he did not perform, constituting
unprofessional or dishonorable conduct likely to deceive or defraud the public; (3) administering
dimethyl sulfoxide intravenously without providing patients a written statement informing them
that the United States Food and Drug Administration had not approved dimethyl sulfoxide for this
use; (4) failing to inform patients of alternative methods of treatment other than injections of
dimethyl sulfoxide; and (5) neglecting to adequately cleanse the skin and needles before
administering intravenous injections of dimethyl sulfoxide, resulting in severe infection in one of
his patients, which constituted failure to practice medicine in an acceptable manner consistent with
the public health and welfare. The Board's complaint stated that these violations of the Medical
Practice Act were grounds for cancellation, revocation or suspension of Guerrero's license to
practice medicine pursuant to section 4.01 of the Act, and that his practice of medicine posed a
continuing threat to the public welfare. On July 24, 1991, the hearings director sent Guerrero
notice of a hearing to address the complaint to be held on September 25, 1991.
On August 1st, Guerrero filed a motion for continuance of a "preliminary
hearing." (1) On August 5th, the hearing examiner denied this first general motion for continuance
but explained that should Guerrero be unduly prejudiced by any deadline or any particular
discovery request, he would have ample opportunity to file a motion requesting appropriate relief.
On August 20th, Guerrero filed a motion to substitute Senfronia Thompson as his attorney of
record. On the same day, he filed a motion for legislative continuance as provided by Texas Civil
Practice and Remedies Code section 30.003. Tex. Civ. Prac. & Rem. Code Ann. § 30.003 (West
1986 & Supp. 1993). In this motion, appellant's attorney stated that she had actively participated
in the preparation of the case and intended to actively participate in the presentation of evidence
at the upcoming hearing. Guerrero and Thompson requested that the hearing be continued until
at least thirty days after adjournment of the first called session of the legislature. The hearing
examiner granted this motion for continuance on September 6th and rescheduled the hearing for
October 15, 1991. The record does not reflect that Thompson objected to this date.
On September 27th, appellant filed his third motion for continuance which the
hearing officer denied on October 2nd. (2) On October 7th, appellant's attorney obtained an order
from a district judge "protecting" her from any trial or discovery matters until completion of a
criminal case in Houston in which she was counsel of record. Appellant then sought a temporary
restraining order in Travis County district court to prevent the Board from holding the October
15th hearing. The Travis County district court granted the temporary restraining order on
October 14th, but requested that Thompson provide the Board with possible dates for rescheduling
the hearing. She did not, however, advise the Board or the hearing examiner of any convenient
dates. On October 17th, the Board's attorney sent Thompson a letter proposing that the hearing
be reset for November 18th. When Thompson again failed to respond, the hearing officer signed
an order on October 21st setting the hearing for November 18th. On October 22nd, Thompson
informed the hearing examiner by letter that she had a trial setting in Harris County on November
18th; she suggested that the hearing be reset for either January 13th, 20th, or 27th. On November
11th, Guerrero filed a motion for continuance of the November 18th hearing. The hearing
examiner denied this fourth motion for continuance with the following explanation:
The Motion for Continuance contains certain misstatements. First, Examiner's
Order No. 11, dated October 21, 1991, was issued one day prior to a letter from
Respondent's counsel discussing a trial setting for Larry Hendrix in the 179th
District Court of Harris County, Texas for November 18, 1991. That letter, dated
October 22, 1991, did not request a continuance of the hearing date. Instead, it
was treated by the Hearing Examiner for what it appeared to be on its face--a
response to an earlier request from the staff attorney for hearing date on November
18, 1991. No Motion for Continuance of the November 18, 1991, hearing was
received until November 11, 1991.
* * * *
The Administrative Procedure and Texas Register Act only requires ten days notice
of hearing. Respondent has been given approximately twenty-eight (28) days
notice of hearing in this instance. Only one week prior to hearing, a continuance
is requested. As described above, that request contains numerous misstatements.
Further (as with several pre-trial motions filed by the Respondent in this
proceeding) no representation is made that there has even been an attempt to arrive
at agreement with the staff attorney for either scheduling or discovery. Due
process does not require that the course and conduct of administrative proceedings
grind to a halt to afford eleventh-hour attempts at delay.
On November 15th and November 18th, Thompson advised the Board that she would seek another
temporary restraining order. Thompson did not appear on either day and did not obtain a
temporary restraining order. The administrative hearing was held in the absence of both Guerrero
and his attorney on November 18, 1991. At this hearing, the hearing examiner stated:
My order [denying the November 11th motion for continuance] was served both
by facsimile and by first-class mail upon the representative for the Board, as well
as Ms. Senfronia Thompson, the attorney of record for the Respondent physician.
And as we have noted, the Respondent physician--neither the Respondent physician
nor his attorney of record is present in the hearing today. We are going forward
with the direct evidence from the Board.
The Board attorney then elicited evidence of Guerrero's violations of the Medical Practice Act.
Between November 18th and April 9th, Guerrero filed another motion for
continuance, (3) sought a temporary restraining order to prevent the Board from deciding the case,
and finally attempted unsuccessfully to obtain a temporary injunction. On April 9, 1992, in a
meeting which Guerrero did not attend, the Board of Medical Examiners voted to revoke his
license to practice medicine based on the hearing examiner's findings of fact and conclusions of
law.
In this appeal Guerrero brings four points of error: (1) that it was an abuse of
discretion to deny his motion for continuance of the November 18, 1991, hearing and that the
denial violated his constitutional rights; (2) that he did not receive proper notice pursuant to
section 2001.054 of the Administrative Procedure Act (4) of the charges against him; (3) that there
is not substantial evidence to support the Board's order revoking his license to practice medicine;
and (4) that the Board abused its discretion by revoking his license.
DISCUSSION
1. Motion for Continuance
Appellant has directed this Court to no particular statutory provision or regulation
governing applications for continuances in the administrative agency setting. Rather, he asserts
that section 4.06 of the Medical Practice Act and section 2001.051 of the APA prohibit a hearing
officer from conducting an administrative proceeding in the absence of the licensee's attorney.
We disagree. The Medical Practice Act section 4.06 states: "In all hearings under this
subchapter, the respondent shall have the right to appear either personally or by counsel or both."
Medical Practice Act § 4.06. This section provides that Guerrero had the right to appear at the
hearing himself, send his attorney to represent him, or attend the hearing accompanied by his
attorney. This section does not indicate that the hearing cannot proceed if the party or his attorney
chooses not to appear. The right to be present at the hearing and to be represented by an attorney
is precisely that--a right that a party may exercise or waive. See 22 Tex. Admin. Code § 187.13
(1989) (stating that any party may appear at an adjudicative hearing and be represented by an
attorney at law and that this right may be waived). Similarly, section 2001.051 of the APA
requires that an opportunity be afforded all parties to respond and present evidence and argument
on all issues involved in a contested case. Guerrero was given the opportunity to appear at the
hearing, but chose not to attend. (5)
We reject appellant's interpretation of these statutes as
absolutely prohibiting the hearing officer from proceeding with the hearing in the absence of
counsel for appellant. At the same time, we recognize that the right to counsel and fair
representation at an administrative hearing is one of constitutional dimension. Mosley v. St. Louis
Southwestern Ry., 634 F.2d 942, 946 (5th Cir. 1981), cert. denied, 452 U.S. 906 (1981).
The statutes that require the president of the Board of Medical Examiners to
conduct hearings vest in him and his hearing officer the power to consider and determine requests
for postponements of those hearings in the interest of fairness. Medical Practice Act § 4.05; APA
§ 2001.051; 22 Tex. Admin. Code § 187.26(b)(7) (1989) (stating that hearings officers have the
authority to regulate the course and conduct of the hearing). This power is analogous to the
inherent power of a court to grant continuances in judicial proceedings. See Tex. R. Civ. P. 251,
252. The decision to grant a continuance rests within the sound discretion of the trial court.
Hernandez v. Heldenfels, 374 S.W.2d 196, 202 (Tex. 1983). Absent a clear abuse of discretion,
we will not disturb a trial court's decision to deny a motion for continuance. State v. Crank, 666
S.W.2d 91, 94 (Tex. 1984). The United States Supreme Court has advised us that there is no
mechanical test for determining when the denial of a continuance is so arbitrary as to violate due
process. Ungar v. Sarafite, 376 U.S. 575, 591 (1964). Rather, the reviewing court must consider
the circumstances presented to the trial judge at the time the request is denied. Id. The ultimate
test of due process of law in an administrative hearing is the presence or absence of rudiments of
fair play long known to our law. Rector v. Texas Alcoholic Beverage Comm'n, 599 S.W.2d 800
(Tex. 1980). Mindful of this standard, we will consider whether, in light of all the circumstances,
the hearing officer abused his discretion by denying the motion for continuance of the November
18th hearing.
Appellant states in his brief, without any references to the record, that his attorney
set other cases for trial on November 18th in reliance on statements made by the Board's attorney
that if the hearing did not take place on October 15th, the Board could not reset it until some time
in March 1992. As a result, appellant's counsel could not appear at the hearing on November
18th. We note that absence of counsel is not a ground for a continuance except at the discretion
of the trial court. Gendebien v. Gendebien, 668 S.W.2d 905, 907 (Tex. App.--Houston [14th
Dist.] 1984, no writ). The hearing officer was faced with a situation in which counsel for
appellant had requested and received two continuances and a temporary restraining order yet failed
to provide the Board with suitable dates to reset the hearing even though both the trial court that
issued the October 14th temporary restraining order and the Board attorney requested such dates. (6)
On October 17th, the attorney for the Board wrote Thompson suggesting the hearing be
rescheduled for November 18th. When the Board still had received no response, the hearing
officer set the hearing for November 18th. It was not until November 11th that appellant's
attorney filed the fourth motion for continuance. (7)
There is no evidence in the record that appellant or his attorney ever made any
attempt to arrive at a mutually convenient date for the hearing. Moreover, neither appellant nor
his attorney has made any showing that Thompson was the only attorney who could represent
Guerrero at the hearing. Several of the pleadings and motions filed on Guerrero's behalf were
signed by Thompson under a signature block bearing the firm name Caggins, Hartsfield &
Ogletree, and her letterhead lists her as serving of counsel to that firm. Indeed, Mr. Caggins
participated in the September 13, 1991, telephone conference, and Lydia Gardner was the attorney
who sought a temporary restraining order to prevent the hearing from taking place on October 15,
1991. Furthermore, we believe it significant that upon discovering that the motion to continue
the November 18th hearing had been denied, rather than attempting to find another attorney who
could appear on Guerrero's behalf, Thompson counseled her client not to attend the hearing.
Appellant has made no showing that another attorney could not have become sufficiently familiar
with the issues to represent Guerrero at the November 18th hearing. In light of the totality of the
circumstances and the events that occurred before making the decision not to continue the hearing,
we cannot say that the hearing examiner abused his discretion in refusing to grant appellant's
fourth motion for continuance. We conclude that the denial was not arbitrary or unreasonable,
nor did it violate Guerrero's constitutional rights. Appellant's first point of error is overruled.
2. Statutory Notice Requirements
In his second point of error, appellant contends that the Board of Medical
Examiners did not meet the notice requirements of APA section 2001.054 which provides that
[n]o revocation of any license . . . is effective unless, prior to the institution of
agency proceedings, the agency gave notice . . . of facts or conduct alleged to
warrant the intended action, and the licensee was given an opportunity to show
compliance with all requirements of law for the retention of the license.
Appellant maintains that there is no evidence in the record showing that he was notified before
the Board's filing its formal complaint on July 24, 1991, of the concerns set forth in the fifth
charge of the complaint, that is, that appellant's administration of dimethyl sulfoxide constituted
failure to practice medicine in an acceptable manner consistent with the public health and welfare
in violation of Medical Practice Act section 3.08(18). Appellant claims that as a result of the
failure to comply with the statutory notice provisions, the Board's findings of fact and conclusions
of law that his practice of medicine was inconsistent with the public health and welfare and poses
a continuing threat to public health and welfare should be given no effect. Section 2001.054 of
the APA requires that an agency give notice and provide the licensee an opportunity to be heard.
This means notice of facts or conduct that allegedly warrant license suspension or revocation, an
opportunity to participate and defend at a hearing, and an opportunity to show that no
requirements of the law for the retention of the license were ever violated. Grace v. Structural
Pest Control Bd. of Tex., 620 S.W.2d 157, 160 (Tex. Civ. App.--Waco 1981, writ ref'd n.r.e.).
Section 2001.054 does not require any notice before the complaint is filed, as appellant alleges,
but rather that the complaint itself adequately inform the licensee of the subject of the adjudicative
hearing. The formal complaint issued by the Board on July 24, 1991, specifically charges
appellant with failing to practice medicine in an acceptable manner. The complaint states:
21. The procedure used by Respondent for the injection of lidocaine was to make
a small bleb under the skin and then inject through the bleb a subcuinjection
of lidocaine. No form of alcohol, betadine or cleansing solution was used
on the skin prior to the injections.
* * * *
23. On or about December 8, 1988, patient J.S. was treated by Respondent with
trigger point injections of lidocaine and intravenous therapy for treatment of
a right hand and wrist sprain.
* * * *
25. As the result of Respondent's injections, patient J.S., on or about December
14, 1988, developed a severe beta hemolytic strep infection requiring
hospitalization. Patient J.S. went into massive septic shock.
* * * *
27. The infections developed by patient J.S. were the result of the professional
failure of Respondent to practice medicine in an acceptable manner consistent
with public health and welfare. Respondent violated Section 3.08(18) of
Article 4495b V.A.C.S. (Texas Medical Practice Act).
This formal complaint provided Guerrero with notice of the Board's intention to consider whether
his practice of medicine was inconsistent with the public health and welfare. Appellant's second
point of error is overruled.
3. Substantial Evidence
In his third point of error, appellant challenges the evidence supporting the Board's
order of April 9, 1992, immediately revoking his license to practice medicine. The Board
concluded that Guerrero violated several provisions of the Medical Practice Act; any one of these
violations would provide grounds for revoking his license. While this Court need only find
substantial evidence supporting one ground for revocation in order to uphold the Board's order,
we conclude that two of the three grounds given by the Board are independently sufficient to
support the revocation decision. (8)
The Board found that Guerrero administered "trigger point" injections to one of his
patients in a manner that caused her to develop a severe beta hemolytic strep infection that spread
throughout her body and endangered her life. The Board concluded that Guerrero's treatment of
this patient demonstrated a disregard for her health and constituted a failure to practice medicine
in an acceptable manner consistent with public health and welfare, a violation of section 3.08(18)
of the Medical Practice Act and grounds for revocation of his license. See Medical Practice Act
§ 4.01. Sufficient evidence exists in the record to support the Board's conclusion.
At the November 18, 1991, hearing, one of Guerrero's patients testified that
Guerrero administered multiple "trigger point" injections at various points on her body--between
her eyes, in her scalp and neck, in her forearms and hands, in her abdomen and "liver," and in
her legs and feet--as treatment for migraine headaches, depression, and other physical ailments.
Additionally, the patient testified that Guerrero made vaginal injections "to melt away scar tissues"
from an earlier hysterectomy. She testified that he made repeated injections, filling the syringe
from the same vial and using the same needle. The patient testified that the doctor did not sterilize
the skin before injecting her. She further testified that she declined to follow Guerrero's
instructions to drink her morning urine, which he advised her contained helpful antibodies, stating
"I couldn't bring myself to do that." The patient testified that her treatment included injection of
intravenous solutions containing various mixtures of dimethyl sulfoxide, hydrogen peroxide,
calcium glutamate, potassium chloride, magnesium and sodium bicarbonate.
When this patient complained of severe pain, redness, and swelling following a
round of injections, the doctor responded by giving her more injections, "an extreme concentrated
amount of trigger points," more intravenous solutions and pain pills. The patient testified that
despite her severe pain, swelling and redness, Guerrero declined her request for medication, did
not consult with any other doctor, and did not recommend hospitalization. He said, "I'm doing
everything that you need." Guerrero administered trigger point injections to this patient on
December 8, 9, 12, and 13, 1988. On December 14th, she was taken by ambulance to the
emergency room of Katy Medical Center where her left leg was so swollen that "it was almost
splitting spontaneously." The staff at the medical center performed extensive fasciotomies,
incisions all the way to the bone to remove the pus from the massive infection found throughout
the patient's body. The patient testified that the fasciotomies were performed on both arms, her
abdomen, her left leg from the ankle to the hip, under her right armpit, and on her scalp. Part
of one finger was amputated. The patient's testimony was substantiated by the introduction of her
medical records.
The patient's testimony was followed by the expert testimony of Dr. Gail Wardlaw,
a staff physician at Brenham State School, previously a private physician who had treated this
patient upon her arrival in the emergency room on December 14, 1988. Dr. Wardlaw testified
that the patient arrived in the emergency room with a beta hemolytic strep infection and massive
septic shock. She lost blood pressure and lucidity: "She was slipping away, in other words. We
were afraid that she would die down in the emergency room." Multiple surgeries were required
to eliminate the massive pus and infection from the patient's system as quickly as possible:
"[A]bscesses were opened to be drained, but wherever the surgeon opened, more areas appeared,
so that's why we have the extensive surgery, you know, going from--her extremities were opened,
flayed, basically." The surgery team feared she would not survive the operations. Kidney failure
followed the surgery, requiring dialysis. Her bone marrow failed, placing her in danger of
hemorrhaging. The patient developed post-operative pneumonia.
Dr. Wardlaw testified that this patient would have been in poor condition and
presenting symptoms requiring hospitalization on the day before she was admitted to the
emergency room, the day of her last visit to Guerrero's office. After reviewing Guerrero's
records of this patient, Dr. Wardlaw testified that she tied the patient's massive infection back to
the "trigger point" injections. She noted that strep infection is compatible with something being
introduced from the outside when the integrity of the skin is broken. Dr. Wardlaw also noted that
the patient's infection was localized at various parts of her body, consistent with her acupuncture
treatment. She testified that if Guerrero injected the patient from the same vial, using the same
needle repeatedly, it was very possible that the vial was contaminated, and that the injections
could introduce bacteria into the patient's body. Commenting on Guerrero's intravenous therapy,
Dr. Wardlaw labeled his solutions "cocktails," "a concoction of his own device," and a dangerous
concoction at that. She testified that hydrogen peroxide is never administered intravenously and
that potassium chloride might be used in very, very small amounts under close scrutiny to
replenish potassium but that both substances are potentially lethal even in small amounts. She
also opined that dimethyl sulfoxide was so dangerous it was used only as a medicine of last resort
for urethral cystitis, a condition not presented by this patient.
After treating this patient and reviewing her medical records, Dr. Wardlaw
concluded that Guerrero's treatment of this woman reflected a failure to practice medicine in an
acceptable manner consistent with public health and welfare. "I think that he has total disregard
for the rules governing medical practice. . . . He has a flagrant disregard for human life, and this
makes him dangerous." Based on this testimony, the Board determined that Guerrero's practice
of medicine was unacceptable and posed a continuing threat to the public welfare.
The standard for reviewing administrative decisions of the Board of Medical
Examiners is substantial evidence as provided by the APA. Medical Practice Act § 4.09(b).
Section 2001.173 of the APA authorizes a reviewing court to test an agency's findings, inferences,
conclusions, and decisions to determine whether they are reasonably supported by substantial
evidence in view of the reliable and probative evidence in the record as a whole. Texas Health
Facilities Comm'n v. Charter Medical-Dallas, Inc., 665 S.W.2d 446, 452 (Tex. 1984). The
reviewing court may not substitute its judgment for that of the agency. Railroad Comm'n v.
Continental Bus Sys., Inc., 616 S.W.2d 179, 181 (Tex. 1981). The correct standard when
reviewing an order suspending a license to practice medicine is whether the evidence as a whole
is such that reasonable minds could have reached the conclusion that the agency must have reached
in order to justify its action. Dotson v. Texas State Bd. of Medical Examiners, 612 S.W.2d 921
(Tex. 1981). We conclude that the Board's determination that Guerrero's practice of medicine
was inconsistent with the public welfare is supported by substantial evidence.
The Board also found that Guerrero violated section 3.08(15) of the Medical
Practice Act by aiding or abetting the practice of medicine by a corporation not licensed by the
Board to practice medicine, and section 3.08(4) of the Act by signing billing or health insurance
claims forms without providing any direct or indirect patient treatment constituting
"unprofessional or dishonorable conduct likely to deceive, defraud or injure the public."
Appellant maintains that there is not substantial evidence to support these conclusions.
At the hearing on November 18th, Dean Gossen, an investigator for the Board of
Medical Examiners, testified that Guerrero entered into a written contract with Christopher
Wright, a psychotherapist who owns and operates a corporation called the Human Relations
Institute. Neither the Human Relations Institute nor Wright is licensed to practice medicine by
the Board of Medical Examiners. According to Gossen's testimony, Guerrero and Wright
executed a contract in October 1988 whereby Guerrero agreed to sign insurance forms once or
twice a month. Guerrero did not review any medical records or administer any type of medical
treatment. Gossen stated that Guerrero "basically admitted that his purpose was to deliver a
signature on the insurance forms." Billing receipts from the Human Relations Institute listed
Guerrero as a psychiatrist and Wright as executive director. There is no evidence in the record
that Guerrero had ever received any psychiatric training. Gossen testified that Guerrero stated
that his only duties at the Human Relations Institute were to sign the insurance forms in return for
which he received fifteen percent of the insurance companies' payments to the Human Relations
Institute. Gossen also testified that Wright is not a licensed social worker, a psychiatrist or
psychologist, and that he needed Guerrero's signature to obtain payment from insurance
companies.
Appellant maintains that this evidence is "rank hearsay," and suggests that it
therefore cannot constitute evidence supporting the Board's findings. However, hearsay admitted
without objection does not lack probative value. Tex. R. Civ. Evid. 802. Appellant also asserts
that because he "did not provide a service to the public and was not being paid for providing
medical services" he did not aid in the corporate practice of medicine. A physician violates
section 3.08(15) of the Medical Practice Act if he or she aids or abets, directly or indirectly, the
practice of medicine by any person, association, or corporation not duly licensed to practice
medicine by the Board. Medical Practice Act § 3.08(15). Thus, the issue is not whether Guerrero
provided services to the public, but whether he assisted one who was not licensed to do so.
Applying the standard of review outlined above, we conclude that substantial evidence exists to
support the Board's findings that Guerrero's contractual relationship with the Human Relations
Institute aided or abetted the practice of medicine by a corporation not licensed by the Board in
violation of Medical Practice Act section 3.08(15), and that his signing billing statements without
providing direct or indirect medical treatment constituted dishonorable and unprofessional conduct
in violation of section 3.08(4) of the Act. Consequently, we overrule appellant's third point of
error.
In his fourth point of error, appellant challenges the trial-court judgment affirming
the Board's order revoking his license. Appellant claims that the Board's immediate revocation
of his license was an abuse of discretion because he had no opportunity to be represented by
counsel and the Board's findings of fact are not supported by substantial evidence. These
arguments were raised in appellant's first and third points of error and have already been
addressed in this opinion. Appellant also claims that the Board's conclusions of law are not
supported by valid findings of fact. Proper underlying findings of fact should be clear, specific,
non-conclusory, and supportive of the ultimate statutory findings. The findings should relate to
material basic facts and to the ultimate statutory finding they accompany. Charter Medical-Dallas, Inc., 665 S.W.2d at 452. Our review of the record reveals sufficient findings of fact to
support the Board's conclusion that Guerrero violated section 3.08 of the Medical Practice Act,
and that such violation was adequate grounds for revocation of his license. Medical Practice Act
§ 4.01(b).
Finally, appellant states that the Board's conclusions that he violated various
sections of the Medical Practice Act do not warrant the harsh sanction of revoking his license.
Because appellant cites no authority to support this contention, we do not address it. Tex. R.
App. P. 74(f). We therefore conclude that the trial court properly affirmed the order of the Board
of Medical Examiners and we overrule appellant's fourth point of error.
We affirm the judgment of the trial court.
Bea Ann Smith, Justice
Before Chief Justice Carroll, Justices Aboussie and B. A. Smith
Affirmed
Filed: December 22, 1993
Publish
1. Though the hearing examiner's order denying the motion does not identify the
nature of the "preliminary hearing" to which Guerrero's motion referred, we assume the
term refers to the adjudicative hearing set for September 25, 1991.
2. This third motion for continuance does not itself appear in the record, but is
evidenced by the hearing examiner's order denying it.
3. This motion was denied, presumably because there were no proceedings to continue
as the hearing had already taken place.
4. All citations in this opinion are to the current Administrative Procedure Act rather
than the former Administrative Procedure and Texas Register Act because the recent
codification did not substantively change the law. Act of May 4, 1993, 73d Leg., R.S.,
ch. 268, § 47, 1993 Tex. Sess. Law Serv. 587, 988; id. sec. 1, § 2001.001-.902, 1993 Tex.
Sess. Law Serv. at 737-54 (to be codified as Administrative Procedure Act, Tex. Gov't Code
Ann. § 2001.001-.902) [hereinafter APA].
5. The record reflects that Guerrero was on vacation in Canada on the day of the
hearing. The following exchange took place in the trial court proceeding from which
appellant appeals:
Q (by Guerrero's attorney): Is it your testimony then that you did not
know that there was a hearing supposed to be on November 18th, it was
going to still be held on November 18th?
A (by Guerrero): Yeah. I knew before I left on my trip to Canada. And I
say, "Okay, I will give you call on Friday if I need to fly back on
Saturday or can I stay the weekend over there to do some tourism." . . .
She said no, everything arranged, don't need to be here Monday to go to
Austin. She said okay.
Q: The reason you didn't come is because your lawyer told you you didn't
have to be here?
A: Right.
The testimony also showed that Thompson knew the motion for continuance of the
November 18th hearing had been denied several days before its scheduled date. We
conclude that this testimony indicates not that Guerrero did not know of the hearing or
that he could not attend, but rather that he chose to follow the advice of his attorney who
counseled him not to appear.
6. In addition, the record reflects several difficulties encountered in setting dates for
depositions and in securing Thompson's appearance at scheduled depositions.
7. In his third motion for continuance, appellant contends that the hearing was set for
November 18th "with the prior knowledge by Hearing Examiner and opposing counsel,
that Attorney Senfronia Thompson was set for jury trial in two cases . . . ." However,
our review of the record reveals that Thompson first brought these trial settings to the
attention of the hearing officer in a letter dated October 22nd, after the Board had
received no objection to the proposed November 18th setting.
8. One of the grounds for revocation of Guerrero's license was that he failed to notify
a patient in writing that the Food and Drug Administration had not approved his use of
dimethyl sulfoxide. Dimethyl sulfoxide (DMSO) is a chemical noted for its unusual
capacity for penetrating the skin; it is used as a solvent and has been approved for
medical use only in limited circumstances. The Texas Health and Safety Code requires
that notice be given to patients when DMSO is administered in an amount that exceeds
the formulation approved for human use by the Food and Drug Administration. Tex.
Health & Safety Code Ann. § 439.013 (b) (West 1992). Because there was no evidence of
the FDA approved formulation or of the actual formulation of DMSO administered by
Guerrero to the patient in question, the Board does not contest on appeal the lack of
substantial evidence to support revoking Guerrero's license on this ground. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1557916/ | 22 So.3d 362 (2009)
Joshua Lowell ODOM, Appellant
v.
FEDEX GROUND PACKAGE SYSTEM, INC., Appellee.
No. 2009-WC-00444-COA.
Court of Appeals of Mississippi.
November 10, 2009.
Leonard Brown Melvin III, Hattiesburg, attorney for appellant.
William Bienville Skipper, attorney for appellee.
Before LEE, P.J., ISHEE and CARLTON, JJ.
ISHEE, J., for the Court.
¶ 1. The Mississippi Workers' Compensation Commission (Commission) affirmed the administrative law judge's denial of workers' compensation benefits to Joshua Odom. Odom then appealed to the Circuit Court of Forrest County, which affirmed the Commission's judgment. Aggrieved, Odom appeals and argues that it was in error to deny his claim for workers' compensation benefits. Finding no error, we affirm.
FACTS AND PROCEDURAL HISTORY
¶ 2. Odom was a student at Jones Community College and a part-time employee with FedEx Ground in Hattiesburg, Mississippi. *363 He began working for FedEx in the summer of 2002. He generally worked weekdays from 5:00 p.m. until 9:00 p.m., for approximately fifteen to twenty hours per week. In December 2003, Odom experienced pain in his back while at work. Odom filed a petition to controvert on January 18, 2005. In it, he claimed that the injury occurred on December 14, 2003, and that his supervisor allowed him to go home early that night.
¶ 3. Odom claimed that, after the injury, he visited Dr. John Beamon, at the Family Care Clinic, complaining about back pain. The first of these visits occurred on December 11, 2003. Odom indicated that he may not have told Dr. Beamon that the injury occurred at work, and it was shown that Odom's record from the visit to Dr. Beamon's contained a notation of "reinjured." Odom returned to see Dr. Beamon on December 16, 2003, at which time he was referred to Dr. Michael Molleston, with Wesley Medical Center.
¶ 4. On December 18, 2003, Odom went to the emergency room at Wesley. He indicated on the patient information form that the injury was not work related. His record from that visit reflected the following: chronic back pain that began six months prior, a recent turning injury at home, and prior chronic back pain. When Odom returned to Wesley on December 20, his record reflected the following: prior back injury/pain, a recent lifting/turning/bending injury at work, and that the back pain began twenty-two weeks prior. On January 7, 2004, Dr. Molleston diagnosed Odom with a ruptured disc and severe sciatica, and Dr. Molleston later performed surgery on Odom to correct the problem. Odom told Dr. Molleston that he had begun experiencing back pain approximately ten or eleven months ago and that he had been referred to a doctor at that time. However, he also told Dr. Molleston that he had hurt his back lifting a thirty-five pound sack of parcels at work.
¶ 5. At Dr. Molleston's deposition, he testified that Odom's symptoms were consistent with the lifting injury that Odom described, and Dr. Molleston thought that the injuries were work related. He did not believe that Odom could have worked at FedEx since 2002 with the ruptured disc. More likely, the injury had likely occurred between three weeks and three months before Dr. Molleston first saw Odom. Following Odom's surgery, Dr. Molleston initially told Odom not to lift anything more than thirty pounds, but the doctor indicated that Odom could return to work with no restrictions after May 3, 2004. However, as of February 2006, Dr. Molleston had placed a forty to fifty pound lifting restriction on Odom.
¶ 6. Pattie Boone was the manager of the Hattiesburg FedEx office. She participated in two depositions. She said that there was never a work-related injury reported to her by Odom or his supervisor, Willie Thompson. Apparently, Thompson had told Boone that he allowed Odom to leave early on the night Odom allegedly injured his back because his back "felt funny." Neither Thompson nor anyone else filed an accident report concerning the incident. According to Boone, it was FedEx's policy to file an accident report whenever there was an accident, and the lack of such a report indicated that Odom never reported an accident. Also, Boone testified that Odom had suffered a skateboarding accident in the summer of 2003. She said that she had given Odom the name of a chiropractor that she recommended.
¶ 7. At the hearing on the matter, Odom admitted that he was unsure of the date of his injury. He agreed that it must not have occurred on December 14. He said that he visited Dr. Beamon the day after *364 the injury, so, since Dr. Beamon's records indicated a December 11 visit, the injury must have occurred on December 10. When Odom was shown his time sheet for FedEx, he was unable to explain why it reflected that he worked December 10, 11, and 12. Additionally, Odom testified that he went home early that night and never returned to work for FedEx. He said that, while lifting a sack of parcels, he felt a sharp pain in the left side of his back and in his leg. Between December 10, 2003, and his surgery on January 26, 2004, he said that he could do nothing but lie in bed all day. He could not explain why Dr. Beamon's records did not reflect that his back pain was work related. As for the records at Wesley, Odom said that his mother filled out those forms for him. Odom admitted that he had experienced back pain prior to the alleged injury; however, the exact time when he began experiencing back problems was unclear. He had been referred to see a Dr. Patterson,[1] but according to Dr. Molleston, Odom never visited Dr. Patterson because he had to quit work and lost his medical insurance. However, Odom maintained that he experienced back problems the entire time he worked for FedEx and that he was referred to Dr. Patterson while working for FedEx. Odom also admitted that he liked skateboarding, but he denied Boone's statement that he had injured his back while skateboarding.
¶ 8. At the time of the hearing, Odom was working for the Ford dealership in Hattiesburg. He was working full-time delivering parts and making approximately $200 per week more than when he worked at FedEx. FedEx had not paid Odom any benefits, but Vocational Rehabilitation had provided some assistance to pay for his medical treatment.
¶ 9. The administrative law judge determined that Odom had not met his burden of proving that he had sustained a compensable work-related injury. The judge concluded that to find for Odom, he "would have to indulge in excessive speculation and conjecture because of the numerous contradictions and inconsistencies in [Odom's] story...." Therefore, the judge denied Odom's claim for workers' compensation benefits. Odom appealed that ruling to the Commission, which affirmed the administrative law judge's ruling. Odom then appealed to the circuit court, which affirmed the Commission's decision. Following that judgment, Odom filed the present appeal.
STANDARD OF REVIEW
¶ 10. This Court applies a limited standard when reviewing a decision of the Commission. Ameristar Casino-Vicksburg v. Rawls, 2 So.3d 675, 679(¶ 16) (Miss. 2008) (citation omitted). As the Commission is the ultimate fact-finder, we will only reverse its decision if it was not supported by substantial evidence, was arbitrary and capricious, or if it contained an error of law. Id. "When, as here, the Commission accepts the [administrative law judge's] findings and conclusions, we review those findings and conclusions as those of the Commission." Id. (citation omitted).
DISCUSSION
¶ 11. Odom asserts only one issue on appeal-that the Commission erred in finding that he did not prove by a preponderance of the evidence that he suffered a compensable work-related injury. Accordingly, Odom argues that it was error to deny his claim for workers' compensation benefits.
*365 ¶ 12. In support of Odom's argument that he presented substantial evidence to support his claim, he notes a number of allegedly erroneous findings made by the Commission. First, Odom argues that, although the actual date of the alleged injury was disputed, it was undisputed that he hurt his back one night while lifting boxes in the scope of his employment. He notes that Boone's testimony corroborates his claim that he suffered an injury at work, and he argues that his inability to pinpoint the exact date of the injury is irrelevant. Second, Odom points to the testimony of Dr. Molleston as support for his claim. According to Dr. Molleston, there was evidence that Odom had prior back pain, but it was Dr. Molleston's opinion that Odom suffered a recent acute rupture of a vertebrae, which was the actual injury. Lastly, Odom argues that the Commission should not have held it against Odom that FedEx did not follow its established procedure in filling out an accident report following his injury. Other than there having been no injury at all, Boone offered no explanation for the absence of an accident report. Odom notes that it was FedEx's responsibility, and not his own, to fill out an accident report; therefore, he argues that its absence should not have been construed against him.
¶ 13. It is, of course, the rule that doubtful workers' compensation cases should be resolved in favor of compensation. Reichhold Chem., Inc. v. Sprankle, 503 So.2d 799, 802 (Miss.1987). The Commission cited this standard in its ruling. The Commission further relied on the correct legal standard in stating that Odom had the burden of proving by a preponderance of the evidence that he suffered an accidental injury arising out of and in the course of his employment. Hedge v. Leggett & Platt, Inc., 641 So.2d 9, 13 (Miss. 1994) (citation omitted). Additionally, the Commission noted that this standard required Odom to prove his case "beyond speculation and conjecture." Coleman v. Chattanooga Container Corp., 377 So.2d 606, 608 (Miss.1979) (affirming denial of workers' compensation benefits to a claimant when the "physical facts, circumstances[,] and contradictions" were sufficient to rebut her testimony of an on-the-job injury) (citation omitted).
¶ 14. In the present case, the Commission pointed out numerous contradictions and inconsistencies in Odom's account. Among those were the following: (1) Odom was unsure of the date of the injury; (2) Odom claimed to have gone home early and never returned to work after the injury, but his medical records showed that he visited Dr. Beamon on December 11, the day after the alleged injury, but his FedEx time sheets reflected that he worked his normal shifts on December 10, 11, and 12; (3) Dr. Beamon's reports mention no work injury; (4) upon checking in at Wesley, Odom first indicated that his injury was not work related but had occurred at home, but on his second visit, he said that the injury had occurred at work; and (5) despite Odom's assertion that he signed an accident report, there was no record of anyone ever filling out such a report.
¶ 15. According to Odom, his supervisor, Boone, admitted that Odom had suffered a back injury while at work. However, Boone's testimony reveals that she was informed that Odom went home early simply because his back "felt funny." Both Odom and Boone agreed that the night that Odom left work early was the last time he reported to work. Odom initially stated that the injury occurred on December 14, 2003, which he said was the day before he went to see Dr. Beamon. As it turned out, December 14 was a Sunday, and Dr. Beamon's records reveal that Odom came for a visit on December 11. *366 This would put the date of the alleged injury on December 10, the day before Odom visited Dr. Beamon. Contrary to Odom's claim that the injury occurred on his last day of work, his timesheet shows that he worked full shifts on December 10the date of the injuryand the following two days. If, as Odom and Boone agree, Odom went home early on his last day of work, then he had already visited Dr. Beamon for a back injury the previous day. These facts indicate that Odom would have actually sustained the injury to his back prior to his last day of work, when he claimed to have suffered a work-related injury and went home early. There was no evidence in the record that revealed any work-related injury prior to Odom's last day of work.
¶ 16. Not only was Odom's account contradictory regarding the date of the alleged injury, but also his medical records were contradictory regarding whether the injury even occurred at work. "When a patient gives a history to a physician which is inconsistent with allegations in a workers' compensation case, this is a significant factor in support of denial of a claim." Raytheon Aerospace Support Servs. v. Miller, 861 So.2d 330, 336(¶ 16) (Miss.2003) (citing Hudson v. Keystone Seneca Wire Cloth Co., 482 So.2d 226, 227-28 (Miss. 1986)). In the present case, Odom's various medical records reflect different accounts as to whether the injury occurred at home or at work and also as to when the injury occurred.
¶ 17. Ultimately, the Commission is the judge of the credibility of the witnesses. Barber Seafood, Inc. v. Smith, 911 So.2d 454, 461(¶ 27) (Miss.2005) (citation omitted). It was the Commission's finding in the present case that, in light of the inconsistencies and contradictions in the evidence and in Odom's account, Odom did not prove by a preponderance of the evidence that he suffered a compensable work-related injury. We find that the Commission's decision to deny benefits to Odom was not the product of an error of law and was not arbitrary and capricious. Further, Odom failed to prove that he suffered a compensable on-the-job injury.
¶ 18. Odom's testimony was that he suffered an injury on his last day of work with FedExDecember 12. However, he visited Dr. Beamon the day before for a back injury, at which time he apparently did not inform the doctor that his injury was work related. If we are to ignore the uncontradicted testimony that Odom's injury occurred on his last day of work and assume, as Odom also testified, that the injury occurred the day before he visited Dr. Beamon, we are then left with the fact that he worked full shifts on the date of the alleged injury and the following two days. Based on these facts, we agree with the Commission that Odom's claim was based on too much speculation and conjecture. We find there was substantial evidence to support the Commission's finding that Odom did not prove his claim by a preponderance of the evidence. Accordingly, this issue is without merit.
¶ 19. THE JUDGMENT OF THE CIRCUIT COURT OF FORREST COUNTY IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, GRIFFIS, BARNES, ROBERTS AND CARLTON, JJ., CONCUR. MAXWELL, J., NOT PARTICIPATING.
NOTES
[1] Dr. Patterson's first name is not given. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558979/ | 22 So.3d 1194 (2009)
Stacy MARSHALL, Appellant
v.
STATE of Mississippi, Appellee.
No. 2006-KA-00113-COA.
Court of Appeals of Mississippi.
January 27, 2009.
Rehearing Denied June 2, 2009.
Certiorari Denied August 27, 2009.
Certiorari Dismissed as Improvidently Granted December 3, 2009.
*1195 W. Daniel Hinchcliff, attorney for appellant.
Office of the Attorney General by W. Glenn Watts, Jackson, attorney for appellee.
Before KING, C.J., GRIFFIS and CARLTON, JJ.
GRIFFIS, J., for the Court.
¶ 1. Following a trial by jury, Stacy Marshall was found guilty of possession of cocaine and sentenced to a term of thirty years in the custody of the Mississippi Department of Corrections, with twenty-five years to serve and the remaining five years conditionally suspended on his successful completion of the community service program of the Jones County Circuit Court. Marshall now appeals and argues that: (1) the circuit court permitted plain error by allowing the State to make multiple references to Marshall's right to remain silent and his right not to testify against himself; (2) the circuit court permitted plain error by allowing the State to make comments attacking the truthfulness of defense counsel; and (3) the cumulative effect of all errors requires reversal. Finding no error, we affirm.
FACTS
¶ 2. After conducting surveillance, the Laurel Police Department obtained a search warrant for the home of Marshall's relatives. When the search warrant was executed, Marshall ran out the back door and was apprehended by the police. A lockbox was found in one of the bedrooms of the house, and the only key found during the search that would open the box was in Marshall's pocket. The key was used to open the box, and over two pounds of cocaine were found inside. A scale used to measure the cocaine was also found near the box.
¶ 3. Marshall was charged with possession of cocaine within 1,500 feet of a church; however, the State failed to put forth any evidence of the distance between the house and the church, so the enhancement was dropped. The jury found Marshall guilty of possession of more than thirty grams of cocaine.
STANDARD OF REVIEW
¶ 4. There were no contemporaneous objections made at trial regarding any of Marshall's assignments of error on appeal. As such, he asks this Court to review his claims under the plain-error doctrine. "The plain[-]error doctrine requires that there be an error and that the error must have resulted in a manifest miscarriage of justice." Williams v. State, 794 So.2d 181, 187(¶ 23) (Miss.2001) (citing Gray v. State, 549 So.2d 1316, 1321 (Miss.1989)). "Further, [the appellate court] applies the plain[-]error rule only when it affects a defendant's substantive/fundamental rights." Id. (citing Grubb v. State, 584 So.2d 786, 789 (Miss.1991)).
ANALYSIS
1. Whether the circuit court permitted plain error by allowing the State to make multiple references to Marshall's right to remain silent and his right not to testify against himself.
*1196 a. The Prosecutor's Direct Examination of the Narcotics Agents
¶ 5. Marshall first argues that his conviction should be reversed because the State was allowed to comment on his right to remain silent and his right not to testify against himself. The State responds that this issue was waived as there was no contemporaneous objection made. Even so, the State claims the issue has no merit because the prosecutor was merely responding to arguments made by defense counsel.
¶ 6. Marshall points to several instances in the transcript of the trial where he alleges that the State commented on his right to remain silent. The first instance is the testimony of Robert Strickland, a narcotics agent with the Laurel Police Department. On redirect, the State asked Strickland the following questions:
Q: Did you ever hear Mr. Marshall or did Mr. Marshall ever state to you that that was not his key on his key chain?
A: No.
Q: Did you ever hear Mr. Marshall make any comments about how the key got on his key chain?
A: No, I didn't. I didn't hear it.
Q: To your knowledge did he make any such statement?
A: Later on he made a statement that it was his.
¶ 7. The State also called Mitch Van Syckel, a narcotics officer with the Laurel Police Department. He testified that the key found on Marshall opened the lockbox. The prosecutor asked this witness:
Q: When Mr. Bounds opened that safe up and started pulling out this cocaine, did Mr. Marshall over there say anything?
A: I don't recall, sir.
¶ 8. Marshall made no objections on the grounds of a violation of his Fifth Amendment right to remain silent. He thus relies on plain error; however, we do not find that this issue resulted in a manifest miscarriage of justice. Finding no plain error, this issue is procedurally barred.
¶ 9. Despite the procedural bar, the error, if any, was harmless and "unimportant in relation to everything else the jury considered on the issue in question, as revealed in the record." Williams v. State, 761 So.2d 149, 154(¶ 18) (Miss.2000) (citations omitted). The silence alluded to by the prosecutor's questioning in no way prejudiced Marshall's case presented to the jury. As to ownership of the key, the testimony showed that Marshall later admitted that the key was his. Regarding his silence as the lockbox was opened, the officer's testimony was that he could not recall whether Marshall made a statement or not. Accordingly, this issue has no merit.
b. The Prosecutor's Comments During Closing Argument
¶ 10. Additionally, Marshall claims that the State improperly commented on his right not to incriminate himself when the prosecutor stated during closing argument, "There ain't no [sic] evidence. Ain't no [sic] evidence he's not guilty." He argues that this statement by the prosecutor placed the burden on Marshall to take the stand and put on evidence of his innocence.
¶ 11. Again, we find that this statement does not constitute plain error. It did not "seriously affect[] the fairness, integrity or public reputation of [the] judicial proceedings." Porter v. State, 749 So.2d 250, 261(¶ 36) (Miss.Ct.App.1999) (quoting United States v. Olano, 507 U.S. 725, 732-35, *1197 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993)). As such, this claim is procedurally barred.
¶ 12. Regardless of the procedural bar, we find no error in the prosecutor's comments. "Attorneys are allowed wide latitude in closing arguments." Howell v. State, 860 So.2d 704, 751(¶ 169) (Miss.2003) (citing Holly v. State, 716 So.2d 979, 988(¶ 33) (Miss.1998)). This Court must consider the allegedly improper statement in the context in which it was made. Id. at 752(¶ 169) (citing Ballenger v. State, 667 So.2d 1242, 1270 (Miss.1995)). The supreme court has held:
although a direct reference to the defendant's failure to testify is strictly prohibited, all other statements must necessarily be looked at on a case[-]by[-]case basis. There is a difference, however, between a comment on the defendant's failure to testify and a comment on the failure to put on a successful defense. Moreover, the State is entitled to comment on the lack of any defense, and such comment will not be construed as a reference to a defendant's failure to testify by innuendo and insinuation.
Strahan v. State, 729 So.2d 800, 807(¶ 27) (Miss.1998) (internal citations and quotations omitted).
¶ 13. When viewed in context, the prosecutor's comments in this case referred to Marshall's lack of defense and not to his failure to testify. In his opening statement, Marshall's attorney told the jury that the cocaine was not Marshall's. He further stated that he would show the jury to whom the drugs actually belonged. He implied numerous times that it was Marshall's relatives, and not Marshall, who owned the drugs. However, there was no evidence at trial that any of Marshall's relatives possessed the drugs. Marshall did not present any evidence whatsoever; thus, the prosecutor's comment that there was no evidence that Marshall was not guilty referred to the promise made by Marshall's counsel that he would prove that someone else, and not Marshall, was in possession of the cocaine.
¶ 14. Further, the prosecutor's comment did not specifically reference Marshall's right not to testify. He did not reference evidence that only Marshall could personally rebut. He merely made a general statement that there was no evidence presented evidence promised by Marshall's counsel proving that someone other than Marshall possessed the cocaine. Such a statement is permissible as it directly refers to Marshall's lack of a defense. Accordingly, this issue has no merit.
2. Whether the circuit court permitted plain error by allowing the State to make comments attacking the truthfulness of defense counsel.
¶ 15. Marshall also contends that the prosecutor's comments during closing argument attacked the truthfulness of the statements made by his counsel during closing argument. The State responds that this assignment of error was also waived as there was no objection made at trial. Further, the State claims that this issue is lacking in merit.
¶ 16. After Marshall's counsel delivered his closing argument to the jury, the prosecutor stated the following in rebuttal:
I just get a little bit outraged at some of the excuses that some of these lawyers can come up with. You know, this is supposed to be about a search. But what is the truth? Ain't that all we need to worry about today? What is the truth about this today? That's all we need to be concerned about.
You know, I've heard this gentlemen get up here that's a lawyer, this gentleman from Jackson come up here with Stacy *1198 Marshall, and say to you this morning, you know, I try to you know, you've got a right to be told the truth by the lawyers too. Let me say this, what I say is not evidence in this case. What he says is not evidence. When you took an oath this morning and you swore before God that you would go by the evidence. That's the evidence, what the people said from the witness stand. That's the evidence. Not what I say or what he says or he says or anybody else says.
(Emphasis added).
¶ 17. Marshall claims that the emphasized portion of this statement impugned the honesty of his counsel. However, Marshall's counsel failed to object at trial. We do not find that this statement, when read in context, called into question the fairness of Marshall's trial; thus, no plain error exists, and Marshall is procedurally barred from raising this issue on appeal.
¶ 18. The procedural bar notwithstanding, this issue has no merit. It is true, as Marshall argues, that this Court condemns any unwarranted personal attacks upon defense counsel. See Edwards v. State, 737 So.2d 275, 300-01(¶ 56) (Miss. 1999). However, as we review the prosecutor's comments in the context of the comments made by defense counsel, it becomes clear that the prosecutor was responding to Marshall's theory of the case and was in no way personally attacking the truthfulness of Marshall's counsel.
¶ 19. Throughout the trial, Marshall's theory was that the cocaine belonged to his relatives and not to him. In his opening statement, Marshall's counsel made it clear that Marshall did not own the home in which the cocaine was found; instead, he was just visiting his family. He promised repeatedly that the jury would be shown exactly who possessed the cocaine, and he concluded by warning the jury to "listen to the evidence and the investigation and it will reveal clearly whose cocaine this was."
¶ 20. However, Marshall presented no evidence at trial. Instead, the entirety of the evidence proved that Marshall ran from the police; Marshall possessed the only key that would open the lockbox containing the cocaine; and Marshall's picture identification card was found in a Walmart bag containing the receipt for the lockbox.
¶ 21. Marshall continued the same defense throughout the closing arguments, even though there was no evidence that the cocaine belonged to his relatives. His counsel stated the following:
This cocaine was found in his relative's home in Laurel at this particular residence in the children's bedroom. [Marshall] doesn't have any children that live at that residence. Those people who own that house, who are [nowhere] to be found in here, they're just leaving him to be charged with this, they're just leaving him and hoping that they don't get caught because they thought that leaving it in the children's bedroom they wouldn't be responsible for this. And they don't care that he's been charged. They just don't want to be charged with this. That is very, very unfair.
. . . .
[His family is] going to stay as far away as they can from this courtroom because they do not want to be found responsible for what they had in their home and having activities going on. And now that he's been arrested, they want you [] to convict him for it.
Defense counsel concluded by saying that the defense had clearly shown the jury who owned the cocaine. Thereafter, the prosecutor made the comments in question regarding the excuses some lawyers come *1199 up with and the jury's right to be told the truth by the lawyers.
¶ 22. The prosecutor's comments were merely references to the fact that there was no evidence to support these arguments made by defense counsel. It does not constitute error for the prosecutor to comment on "the paucity of evidence before the jury to support the defendant's defense." Moss v. State, 727 So.2d 720, 727(¶ 31) (Miss.Ct.App.1998) (citations omitted). The prosecutor stated that the jury was not being told the truth because Marshall's counsel repeatedly blamed Marshall's relatives despite the overwhelming evidence that Marshall constructively possessed the cocaine and the lack of evidence that the relates possessed the cocaine. We find no reversible error in the prosecutor's statements during closing argument. Accordingly, this issue has no merit.
3. Whether Marshall is entitled to relief based on the cumulative errors committed at trial.
¶ 23. Finally, Marshall argues that this Court should grant his requested relief based on the cumulative errors committed at trial. However, we have found that each of Marshall's assignments of error is without merit. "As there was no reversible error in any part, so there is no reversible error to the whole." McFee v. State, 511 So.2d 130, 136 (Miss.1987). Accordingly, this issue is also without merit.
¶ 24. THE JUDGMENT OF THE CIRCUIT COURT OF JONES COUNTY OF CONVICTION OF POSSESSION OF COCAINE AND SENTENCE OF THIRTY YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS, WITH TWENTY-FIVE YEARS TO SERVE AND FIVE YEARS SUSPENDED, IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, BARNES, ISHEE, ROBERTS AND CARLTON, JJ., CONCUR. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1299179/ | 616 S.E.2d 844 (2005)
274 Ga. App. 73
ELLIOT
v.
The STATE.
No. A05A0630.
Court of Appeals of Georgia.
June 28, 2005.
*845 Brian M. House, Ringgold, for appellant.
Herbert E. Franklin, Jr., District Attorney, John L. O'Dell, Assistant District Attorney, for appellee.
SMITH, Presiding Judge.
Kendrick Elliot was convicted of the offense of criminal attempt to manufacture methamphetamine and sentenced as a recidivist. He appeals, raising three enumerations of error. He raises the general grounds, contends the trial court erred in denying his motion to suppress, and asserts that the trial court abused its discretion in failing to consider a lesser sentence. The State concedes that sentencing Elliot as a recidivist may have been improper, and we agree. We find *846 no merit in Elliot's other two contentions. We therefore affirm Elliot's conviction and remand this case to the trial court for resentencing.
1. We first consider whether the evidence presented at trial was sufficient to support Elliot's conviction for criminal attempt to manufacture methamphetamine.
Construed in favor of the jury's verdict, the evidence presented at trial showed that Elliot and his wife Susan both used methamphetamine, also called "meth" or "speed." A friend showed Elliot how to manufacture the drug, and the Elliots began making it regularly. Susan testified about the process used for making speed, the way they procured the ingredients for its manufacture, and how they avoided prosecution by using motel room bathrooms and friends' homes to perform the manufacturing process. She testified that they made it daily, and Elliot was much in demand for his work because he was known as a "good cook." Susan also testified that they used "a lot" of speed, injecting it intravenously.
When Elliot was high on speed he was "always angry" and became violent. After one such incident, Susan provided information to law enforcement authorities, who obtained a warrant for his arrest. Susan provided officers with possible locations for Elliot and descriptions of two vehicles he might be using. Elliot was discovered at a motel in Fort Oglethorpe and arrested. Officers found in Elliot's motel room materials that appeared to be either bomb components or laboratory items. Because officers were aware of the explosive nature of the materials used in manufacturing meth, they called in the Fort Oglethorpe Chief of Police and the fire department and evacuated the motel. A detective certified to investigate clandestine methamphetamine labs was called in, and he concluded that the materials were the components of such a lab.
The officers patted Elliot down and recovered a capped hypodermic needle from his pocket. The materials seized from the motel room were sent to the state crime laboratory, and a forensic chemist testified at trial that the items found in Elliot's motel room were those used in the manufacture of methamphetamine. This evidence was more than ample to support the jury's verdict finding Elliot guilty of attempted manufacture of methamphetamine under the standard set forth in Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979).
2. Elliot contends the trial court erred in denying his motion to suppress the items seized from his motel room, arguing that the room was searched unlawfully after his arrest. We do not agree.
When reviewing a trial court's ruling on a motion to suppress, evidence is construed in favor of upholding the trial court's findings and ruling, which will not be disturbed if any evidence supports them. State v. Williams, 220 Ga.App. 100, 102(2), 469 S.E.2d 261 (1996). So construing the evidence, the incident precipitating the charge for which Elliot was tried occurred when Elliot and Susan were staying with a friend in Tennessee, cooking methamphetamine. Elliot told Susan to extract more product from the residue in coffee filters previously used in the cooking process, and she refused because she "didn't feel like it." Elliot became "furious." He forced her into a van at gunpoint and drove to Chickamauga and Chattanooga National Military Park, still holding a handgun in his lap. On the ride, he struck her on her head with his gun. He told her that when they arrived at the park, he would shoot her, but before he did so, he would tie her to a tree and cut her with a knife, so that insects would "eat" her.
When they arrived and Elliot forced Susan out of the van, another van drove by and Elliot fired a shot toward Susan to force her into the woods. His mood then suddenly changed and he cried, apologized, and drove her back to their friends' home in Tennessee. While Elliot was on the telephone, Susan left the house and went to a supermarket in Fort Oglethorpe, where she telephoned her mother. Her mother called the police and took her to a hospital, where she was interviewed by law enforcement officers, including a U.S. Park Ranger. The ranger testified that Susan told him about the incident that occurred *847 in the park, and that he called in other law enforcement officers.
When Elliot was found and arrested at a motel in Fort Oglethorpe, officers deployed around the motel room door and announced their presence, calling to Elliot to come out. After about five minutes, Elliot exited the room and slammed or pulled the door shut behind him. He was immediately arrested and handcuffed. Officers asked Elliot if anyone else was present in the room, but he did not answer, saying only that he wanted the officers to telephone his family so they could retrieve his personal belongings from the motel room.
Elliot relies upon Brannon v. State, 231 Ga.App. 847, 500 S.E.2d 597 (1998), to support his contention that the search of the motel room was unlawful because he shut the door behind him and the room was therefore not within his immediate presence after he was arrested. "When a lawful arrest is effected a peace officer may reasonably search the person arrested and the area within the person's immediate presence." (Citation and punctuation omitted.) Id. at 848, 500 S.E.2d 597. Georgia courts have held that even "probable cause, however well founded, can provide no justification for a warrantless intrusion of a person's home absent a showing that the exigencies of the situation made that course imperative." (Citations and punctuation omitted.) Carranza v. State, 266 Ga. 263, 266, 467 S.E.2d 315 (1996). Occupied motel rooms are afforded the same considerations under the Fourth Amendment as private homes. Pickens v. State, 225 Ga.App. 792, 794(1) (b), 484 S.E.2d 731 (1997).
We have held, however, that
[p]olice officers are authorized to make a protective sweep in conjunction with an in-home arrest when they possess articulable facts which, taken together with the rational inferences from those facts, would warrant a reasonably prudent officer in believing that the area to be swept harbors an individual posing a danger to those on the arrest scene. [Cit.]
Inglett v. State, 239 Ga.App. 524, 525(1), 521 S.E.2d 241 (1999). Such a search is limited to a sweep to ensure officer safety by detecting the presence of other occupants. Id. The facts in this case are different from those in State v. Mixon, 251 Ga.App. 168, 170, 554 S.E.2d 196 (2001). We found in Mixon that the trial court's grant of the motion to suppress was not clearly erroneous. The trial court in Mixon was authorized to conclude from the evidence that officers did not have a reasonable belief that the house contained any other individual posing a danger. Id. at 170-171, 554 S.E.2d 196.
Here, even though the issue at the hearing on the motion to suppress was the same, the facts are very different. Based on the information given to the police by Susan about Elliot's violent nature, officers were justified in thinking that someone in the room might be hurt or held against his or her will. Elliot closed the door after him and would not respond when the officers asked him if anyone else was in the room. An officer testified that he did not know at the time that Susan was safe, and that he believed that Elliot was armed. The officers also did not know whether other people might still be in the motel room, possibly armed. When arrested outside the motel room, no weapon was found on Elliot's person, but a pistol was later recovered in the room.
Officers summoned the motel manager, who unlocked the door. The officers entered with guns drawn, looking for other persons who might be hiding there. No other persons were found and the officers were leaving when an officer observed the items that were seized and eventually identified as components and equipment used in manufacturing methamphetamine. Based on this evidence, the trial court was authorized to conclude that the officers were justified in conducting a "protective sweep" of the motel room. The trial court did not err in denying Elliot's motion to suppress.
3. In Elliot's last enumeration of error, he maintains that the trial court abused its discretion by failing to consider imposing a lesser sentence.
We have vacated and remanded sentences when the record shows that the trial court did not recognize its discretion to probate or suspend a sentence under the provisions of *848 OCGA § 17-10-7(a). See, e.g., Minter v. State, 245 Ga.App. 327, 330(5), 537 S.E.2d 769 (2000) (full concurrence in majority opinion). Bradshaw v. State, 237 Ga.App. 627, 629-630(2), 516 S.E.2d 333 (1999). But here, the prosecutor reminded the trial court of its discretion to probate or suspend part of the sentence under OCGA § 17-10-7(a).
Elliot was sentenced under the recidivist statute, OCGA § 17-10-7, to 40 years without parole. He has two prior drug convictions for sale of methamphetamine. The maximum sentence permitted under OCGA § 16-13-30(d) is therefore life without parole, and the State requested the imposition of that sentence. By sentencing Elliot to a 40-year term of confinement, the judge showed that he not only considered, but imposed, a sentence less than the maximum. Moreover, the trial court placed on the record his concerns about the "rampant" nature of the methamphetamine problem and the fact that Elliot's participation in it was "extreme and often."
Elliot points out that, over objection, the trial court considered an uncertified Arkansas docket sheet in aggravation of sentence. The State represented and the trial court may have believed that the document in issue had been certified. More important, perhaps, is the State's apparent concession that the trial court improperly considered State's Exhibit 56, a certified copy of Elliot's Tennessee conviction and sentence for felony receiving/concealing stolen property. The State points out that the face amount in the Tennessee indictment is $200, but the minimum amount required for such an offense to constitute a felony in Georgia is $500. It is therefore possible that the Tennessee conviction does not qualify as a prior felony in Georgia for purposes of the recidivist statute. See Lewis v. State, 263 Ga.App. 98, 99-100(2), 587 S.E.2d 245 (2003). Even though Elliot did not object or raise this on appeal, the State also concedes that from its reading of Lewis, supra, and Woodson v. State, 242 Ga.App. 67, 530 S.E.2d 2 (2000), "it appears ... that this constitutes a failure of proof that need not be urged at any time by an appellant." Id. at 70(4), 530 S.E.2d 2. We agree with the State, and we therefore remand this case to the trial court for resentencing.
Judgment of conviction affirmed and case remanded for resentencing.
ELLINGTON and ADAMS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1557854/ | 22 So. 3d 76 (2009)
WILSON
v.
STATE.
No. 1D09-2128.
District Court of Appeal of Florida, First District.
November 18, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919650/ | 660 So. 2d 220 (1995)
Len HENDERSON
v.
STATE of Mississippi.
No. 92-KA-00121-SCT.
Supreme Court of Mississippi.
August 17, 1995.
*221 Stella L. Terrell, Yazoo City, for appellant.
Michael C. Moore, Attorney General, Pat S. Flynn, Ass't Attorney General, Jackson, for appellee.
En Banc.
PRATHER, Presiding Justice, for the Court:
I. INTRODUCTION AND PROCEDURAL HISTORY
This appeal arises from Len Henderson's conviction, in the Circuit Court of Humphreys County, on a charge of attempted capital rape. The grand jury originally indicted Henderson on two counts of capital rape and one count of attempted capital rape. At trial, after the State rested, the trial court dismissed one charge of capital rape. The jury subsequently acquitted Henderson of one charge of capital rape and convicted him on the remaining attempted capital rape charge. From this conviction, Henderson now appeals to this Court seeking review of the following issues:
A. Whether the trial court erred in instructing the jury on the elements of attempted capital rape;
B. Whether the trial court erred in failing to grant a directed verdict, peremptory instruction, or JNOV;
C. Whether the trial court erred by failing to grant a mistrial;
D. Whether the trial court erred by failing to grant a cautionary instruction;
E. Whether the trial court erred by admitting a note written by Appellant's brother; and
F. Whether the trial court erred by allowing testimony from Appellant's brother regarding his statement to the Sheriff's Department.
The trial court's failure to properly instruct the jury on the elements of attempted capital rape requires reversal and remand. Finding no other error, this Court does not address the remaining issues in this opinion.
II. THE LAW
A. Whether the trial court erred in instructing the jury on the elements of attempted capital rape.
1. The Parties' Contentions
Henderson claims that the trial court did not instruct the jury regarding the necessary elements of the offense of attempted capital rape. The State responds that the instructions granted gave sufficient legal instruction on the elements of attempted capital rape.
*222 2. Additional Relevant Facts and Discussion
Regarding the attempted capital rape charge, the trial court gave the following jury instruction:
As to the charge of attempted capital rape, if you believe from the evidence in this case beyond a reasonable doubt that LEN HENDERSON was over the age of eighteen years and attempted to insert his penis in the vagina of LAURA MAY[1], a female child under the age of fourteen years, then it is your sworn duty to return a verdict of guilty as to Count III of the indictment.
Instruction S-1. Henderson lodged a timely objection to this instruction on the ground that it does not provide the elements of attempted rape. He is correct.
The elements required to prove attempted capital rape are: a design and endeavor to rape one less than fourteen years old by one at least eighteen years old, an overt act toward the commission of rape, and failure to complete the rape or prevention of completion. See Harden v. State, 465 So. 2d 321, 323 (Miss. 1983) (citing West v. State, 437 So. 2d 1212, 1214 (Miss. 1983) and Miss. Code Ann. § 97-1-7 (1972)).
Instruction S-1 does not mention failure or prevention of completion. The State argues that the jury "obviously ... found from the evidence that [Henderson] failed in his attempt to penetrate Laura," therefore there is no error. However, the jury could have believed that the rape was not completed because Henderson abandoned his attempt, rather than believing Laura's testimony that she slid from beneath Henderson each time he climbed on top of her. A jury finding of abandonment would have precluded a conviction if the trial court had given a proper instruction. In Ross v. State, 601 So. 2d 872, 874 (Miss. 1992), this Court held:
The crime of attempt to commit an offense occurs when a person
shall design and endeavor to commit an offense, and shall do any overt act toward the commission thereof, but shall fail therein, or shall be prevented from committing the same... .
Miss Code Ann. § 97-1-7 (1974). Put otherwise, attempt consists of "1) an intent to commit a particular crime; 2) a direct ineffectual act done toward its commission, and 3) failure to consummate its commission." Pruitt v. State, 528 So. 2d 828, 830 (Miss. 1988) (attempted rape was voluntarily abandoned by defendant when he told victim she was free to leave); accord Edwards v. State, 500 So. 2d 967, 969 (Miss. 1986); Bucklew v. State, 206 So. 2d 200, 202 (Miss. 1968).
Id. at 874.
"It is axiomatic that a jury's verdict may not stand upon uncontradicted fact alone. The fact must be found via jury instructions correctly identifying the elements of the offense under the proper standards." Turner v. State, 573 So. 2d 1340, 1343 (Miss. 1990). "Where the jury had incorrect or incomplete instructions regarding the law, our review task is nigh unto impossible and reversal is generally required." Neal v. State, 451 So. 2d 743, 757 n. 9 (Miss. 1984), cert. denied, 469 U.S. 1098, 105 S. Ct. 607, 83 L. Ed. 2d 716 (1989).
The jury could have concluded from the evidence presented that: Henderson could have overpowered the child, had he so intended, given his physical superiority; or the Mays fabricated the allegations against Henderson in retaliation for his ending his relationship with the child's mother, as the record indicates; or Henderson offered the child money in exchange for sex, but did not force the issue after she declined. The State provided the jury with sufficient evidence to find Henderson guilty of attempted capital rape. However, the lack of any instruction setting forth all elements of attempted capital rape requires this Court to reverse and remand.
This Court has held that the jury instructions, taken as a whole, are to be considered together when deciding the sufficiency of the court's instructions on the law. As long as any one instruction set forth the necessary elements of an attempted capital rape according *223 to the statute, this Court could affirm on this assignment. However, no instruction set forth the three elements stated in the statute of (1) a design or endeavor to commit an offense, (2) an overt act toward commission thereof, and (3) a failure to consummate the act. Neither the trial court's instruction S-1 nor the defense instruction D-12, which is a burden of proof instruction, meet this statutory requirement.
III. CONCLUSION
The trial court erred in failing to instruct the jury on the elements of attempted capital rape. The only instruction attempting to set forth these elements, which the trial judge found sufficient, does not mention failure or prevention of completion. The jury may have found abandonment by Henderson, yet they would still have convicted Henderson based on the incomplete instruction. Although the State provided the jury with sufficient evidence to find Henderson guilty of attempted capital rape, the lack of any instruction setting forth all elements of the crime requires that this Court reverse and remand.
REVERSED AND REMANDED.
HAWKINS, C.J., DAN M. LEE, P.J., and SULLIVAN and McRAE, JJ., concur.
SMITH, J., dissents with separate written opinion joined by BANKS and JAMES L. ROBERTS, Jr., JJ.
PITTMAN, J., not participating.
SMITH, Justice, dissenting:
This case had its origin in a multi-count indictment charging Len Henderson, age twenty-three, with two counts of capital rape and one count of attempted capital rape of nine year old Laura May. The trial court dismissed one of the counts of capital rape at the conclusion of the State's case in chief. The jury found Henderson not guilty of the remaining capital rape charge and guilty of the attempted capital rape.
The majority writes that the jury was not properly instructed regarding the elements of attempted rape as the instructions fail to mention the necessity of an overt act and failure or prevention of completion. The majority questions whether the jury found that Henderson performed an overt act toward the commission of rape. Majority at 222. Then, the majority proclaims that the jury could have believed that the rape was not completed because Henderson abandoned his attempt. Majority at 222.
Instruction S-1 states that Henderson, over the age of eighteen years, attempted to insert his penis into the vagina of Laura May, a female child under the age of fourteen years. However, in addition thereto, Instruction D-12 stated:
The Court instructs the jury that if you find that the State has failed to prove beyond a reasonable doubt that Len Henderson actually penetrated the private parts of Laura May or attempted penetration of her private parts, then it is your sworn duty to find Len Henderson, Not guilty.
Did the State prove an overt act by Henderson? The testimony of Laura established that Henderson offered her $10.00 to allow him to lay on top of her, but that even when he gave her some change, she refused his request and returned the change to him. Laura testified that Henderson picked her up and carried her to another room, pulled down her pants, tried to get on top of her, tried to hunch her, tried to put his "privacy up in mine" and that he did insert it "a little." Subsequently, Laura claimed that Henderson followed her into the bedroom, tried to get on top of her and had his hand over her mouth. She stated, "[A]nd then he had put me back on the bed and tried to do it again but I kept sliding from under him." Laura testified that she told her brother Eric to write down what Henderson had done on a note that she subsequently gave to her mother. Laura also told Eric to go get their aunt.
Laura's younger brother, Eric testified that he was awakened and observed that Henderson "put his hand over her mouth and pulled her pants down and was hunching on her." Eric testified, "I got up and Len kept telling [me] to go back to bed, but I did not." Eric confirmed the writing of the note to their mother as explained and directed by *224 Laura. He also agreed that he was able to summon their aunt to the scene. Henderson left as the aunt arrived.
The State's proof adequately covered the three required elements and was sufficient to establish the offense of Attempted Capital Rape beyond any reasonable doubt. The overt act by Henderson of attempting to insert his penis in the vagina of Laura May was alleged in the indictment and clearly established by the proof.
Attempt is defined in Black's Law Dictionary, Revised Fourth Edition as: "An effort or endeavor to accomplish a crime, amounting to more than mere preparation or planning for it, which, if not prevented, would have resulted in the full consummation of the act attempted, but which, in fact, does not bring to pass the party's ultimate design." Id. at 162.
Neither S-1, nor any other instruction included language that Henderson failed or was prevented from completing his attempted rape. Obviously, the jury found that he failed or was prevented by Laura's actions because the jury acquitted Henderson of the capital rape and consistent with Instructions S-1 and D-12, found Henderson guilty of attempted rape. It goes without saying that the very word "attempted" implies failure or prevention of completion of an act.
Regardless, after the trial court stated that S-1 contained all elements, Henderson's counsel made no further objection and totally failed to ever advise the trial court which element, if any, was missing. Objections to jury instructions must be specific or they are waived. Collins v. State, 368 So. 2d 212 (Miss. 1979); See also Barnett v. State, 563 So. 2d 1377 (Miss. 1990). Henderson's failure to specifically advise the trial judge as to which element was missing, coupled with his failure to offer an instruction containing the supposed missing element effectively waived this issue.
This Court, in Edwards v. State, 500 So. 2d 967 (Miss. 1986), has held that the crime of attempt consists of three elements: (1) an intent to commit a particular crime; (2) a direct ineffectual act done toward its commission, and (3) failure to consummate its commission. Id. at 969. In Thompson v. Krutzer, 103 Miss. 388, 60 So. 334 (Miss. 1912), this Court held that generally "attempt" means an intent to do a certain thing, and some actual, overt effort to put the intent into effect must take place. Id., 60 So. at 335. In Harden v. State, 465 So. 2d 321 (Miss. 1985), the Court held that a lewd suggestion to the victim coupled with his physically grabbing her and attempting to carry her away constituted a sufficient overt act. Id. at 322-23.
Although the State's proof must show an overt act, it is sufficient that the indictment alleged that Henderson "attempted to insert his penis in the vagina" to comply with the overt act requirement of the elements of attempted rape. This Court has approved and held as sufficient general language alledging the necessary elements in a rape case. In Allman v. State, 571 So. 2d 244 (Miss. 1990), this Court approved the following general language in Jury Instructions S-2A:
The Court instructs the Jury that if you believe from all of the evidence presented in this case beyond a reasonable doubt that the Defendant, Ernest Lee Allman, a male person above the age of eighteen (18) years, did on or about the 1st day of February, 1986, in George County, Mississippi, unlawfully, wilfully and feloniously rape, ravish and carnally know one C.A. [sic], a female person under the age of fourteen (14) years, then in that event, it is your sworn duty to find the defendant guilty of Capital Rape, Count 1.
Id. at 251.
The same language was approved for Jury Instruction S-2B. Surely the majority would require no more additional language in a jury instruction in an attempted rape case than was required and held sufficient by this Court in a rape case. The jury in the case at bar certainly could have concluded from the proof offered and the instructions given that Henderson performed an overt act towards the commission of rape.
Next, we address the issue of why the commission of the rape failed. The majority suggests that the jury could have believed that the rape was not completed because *225 Henderson abandoned his attempt. There simply is no proof of abandonment as Henderson himself recognized. He only casually mentions abandonment in his brief, did not argue it at trial and failed to ask for a jury instruction claiming abandonment as a defense. Henderson suggested alibi instead; claiming that he was across the street at the time of the alleged attempted rape. He even asked to be allowed to draft and submit an alibi instruction to the jury, but failed to offer such an instruction. It should therefore not surprise anyone that Henderson failed to offer any jury instruction containing his theory of defense.
The sole proof offered to the jury on this issue was that Laura "slid out from under him" on each occasion. This Court held in Alexander v. State, 520 So. 2d 127 (Miss. 1988) (Prather, J.), that where the appellant's rape attempt failed because of the victim's resistance and ability to sound the alarm, the appellant cannot establish an abandonment defense. Id. at 130. Laura's resistance of sliding out from under Henderson was effective for a nine year old, added to the fact that she sounded the alarm by finally awakening her younger brother, after several unsuccessful attempts and sending him to get their aunt.
Ross v. State, 601 So. 2d 872 (Miss. 1992), is of no help to Henderson or the majority. In Ross, an abandonment did take place, accomplished through the verbal urgings of the victim, but with no physical resistance or external intervention which caused the perpetrator to change his mind. Id. at 875.
West v. State, 437 So. 2d 1212 (Miss. 1983), also relied upon by the majority, is of little value to Henderson. In West, although West exposed and fondled himself in front of the victim, he made no attempt at penetration, a factor totally contrary to the situation in the case sub judice. Henderson actively and repeatedly attempted to insert his penis into Laura's vagina. His lack of success was certainly not for lack of trying. The sole proof of his failure of prevention was to Laura's actions of "sliding out from under him."
The evidence was more than sufficient to convict Henderson of attempted rape. The instructions, when read and considered as a whole, fully informed the jury of the applicable law and all elements of the offense. This is especially so considering Instructions C-1, S-1 and D-12. This Court has recently reaffirmed this long standing rule in Chase v. State, 645 So. 2d 829, 852 (Miss. 1994), wherein the Court stated, "Looking at the instructions as a whole, it cannot be said that there was reversible error in spite of the procedural bar." See also, Thompson v. State, 602 So. 2d 1185 (Miss. 1992), wherein the Court stated:
We do not forget the rule that if instructions correctly state the law when read together as a whole, there is no reversible error. Roberts v. State, 458 So. 2d 719, 721 (Miss. 1984); Hickombottom v. State, 409 So. 2d 1337 (Miss. 1982); Anderson v. State, 397 So. 2d 81 (Miss. 1981); Norman v. State, 385 So. 2d 1298 (Miss. 1980). Also, if an error in one instruction is cured by another when the instructions are considered as a whole, the error will not be reversible. Roberts, at 721; Church v. State, 288 So. 2d 855 (Miss. 1974) (Appeal after remand), 317 So. 2d 386 (Miss. 1975), cert. den., 423 U.S. 1016, 96 S. Ct. 450, 46 L. Ed. 2d 388 (1975).
Id. at 1190. It would certainly have been a better practice for the State to have included the language of failure or prevention from accomplishing the act in Jury Instruction S-1. However, under the facts of this case, with its combination of a capital rape for which Henderson was acquitted, together with the attempted rape for which Henderson was found guilty, the jury obviously understood the facts of the case as well as the instructions on the law. This Court should affirm the verdict of the jury and the sentence of the lower court.
I respectfully dissent.
BANKS and ROBERTS, JJ., Join this opinion.
NOTES
[1] The name of the minor child has been changed to protect her anonymity. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1557873/ | 22 So. 3d 75 (2009)
THOMAS
v.
STATE.
No. 1D09-0405.
District Court of Appeal of Florida, First District.
November 2, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1557882/ | 22 So. 3d 1173 (2009)
Olivia M. SLIMAN
v.
Mary Thi NGUYEN.
No. 2008-CA-00957-SCT.
Supreme Court of Mississippi.
November 19, 2009.
Myles Ethan Sharp, attorney for appellant.
Edmund J. Walker, Biloxi, attorney for appellee.
EN BANC.
CHANDLER, Justice, for the Court.
¶ 1. This appeal stems from a car accident which occurred on November 12, 1999, in Ocean Springs, Mississippi. Mary Nguyen filed a complaint in the County Court of Jackson County against Olivia Sliman in an attempt to recover compensation for injuries she had received as a result of the accident. A trial was held, and the jury found that Sliman was not liable for Nguyen's injuries. Nguyen then filed a motion for a new trial pursuant to Rule 59 of the Mississippi Rules of Civil Procedure, which was granted by the county court. Sliman appealed the grant of a new trial to the Jackson County Circuit Court, which affirmed the county court's decision. From these proceedings, Sliman appeals.
FACTS
¶ 2. On November 12, 1999, Sliman pulled out of the Taco Bell parking lot, drove between two cars in a line of southbound traffic, and turned left into the northbound lane of Vermont Avenue. At approximately the same time, Nguyen turned left off Highway 90 onto Vermont Avenue and began traveling north. A collision ensued when the front of Nguyen's car hit the front passenger side of Sliman's car. Both parties agreed that part of Nguyen's thumbnail had been ripped off during the accident. All other claims of damages were disputed at trial.
¶ 3. Following a trial, the jury found Sliman not liable. Nguyen filed a Rule 59 motion for a new trial, arguing that the verdict was against the overwhelming weight of the evidence. The county court granted the motion and ordered a new trial. The county court's order did not provide any additional legal analysis or reasoning for the new trial. Sliman appealed the county court decision to the Circuit Court of Jackson County.
*1174 ¶ 4. The Circuit Court of Jackson County affirmed the county court's ruling, which granted a new trial to Nguyen pursuant to Rule 59. The circuit court affirmed the grant of new trial based on its assessment that the jury's verdict was against the overwhelming weight of the evidence. Sliman now appeals to this Court, alleging the county court erred in granting the motion for a new trial, and if the grant of a new trial was not error, the circuit court erred in not retaining jurisdiction over the case. As a preliminary matter, this Court must determine whether the circuit court had appellate jurisdiction to review the county court's order granting a new trial.
ANALYSIS
¶ 5. Sliman argues that, should this Court determine that the county court properly granted the motion for new trial, then, the circuit court should have retained jurisdiction of the case. Citing Mississippi Code Section 11-51-79 (Rev.2004) as authority, Sliman argues that any new trial must occur in the circuit court, because once appealed there, it belongs on the docket of the circuit court. Prior to addressing Sliman's issue on appeal, this Court must determine whether the county court's grant of a new trial was interlocutory in nature in order to determine whether the circuit court had jurisdiction in this appeal.
¶ 6. In Banks v. City Finance Co., 825 So. 2d 642 (Miss.2002), the Court stated that a final judgment constitutes "a judgment adjudicating the merits of the controversy which settles all the issues as to all the parties." Banks, 825 So.2d at 645 (citing Hindman v. Bridges, 185 So. 2d 922 (Miss.1966)). See also Cotton v. Veterans Cab Co., 344 So. 2d 730, 731 (Miss.1977) ("In sum, the judgment is final only when it settles all issues as to all parties.").
¶ 7. Additionally, Mississippi Rule of Civil Procedure 54(a) defines a judgment as including "a final decree and any order from which an appeal lies." The comments to Rule 54 state: "A judgment is the final determination of an action and thus has the effect of terminating the litigation." See M.R.C.P. 54 cmt.
¶ 8. A brief review of Mississippi cases establishes that a trial court's grant of a new trial is interlocutory in nature and generally not appealable, since it is not a final disposition or a final judgment of the case. Indeed, in Allstate Insurance Co. v. McGory, this Court stated "[u]nder the authority of a long line of cases, it is a general rule of this Court to respect and follow the holding of the trial judge with reference to his order in granting a new trial since such an order is not a final disposition of the case." Allstate Ins. Co. v. McGory, 697 So. 2d 1171, 1174 (Miss. 1997) (quoting Standard Prods., Inc. v. Patterson, 317 So. 2d 376, 379 (Miss.1975)). See also Franklin v. Franklin, 864 So. 2d 970, 975 (Miss.Ct.App.2003) (where the court determined that "[a]n order granting a motion for new trial is not a final judgment which can be appealed as of right" and "[t]he only avenue for review of a decision on a motion for new trial alone is via an interlocutory appeal" or it may be appealed "as an assignment of error following the entry of a final judgment from the new trial").
¶ 9. Here, Sliman appealed the Rule 59 grant of new trial from the county court to the circuit court. Once the circuit court affirmed the county court's grant of new trial, Sliman appealed to this Court.
¶ 10. Though neither party raised the issue of jurisdiction in the context of Sliman's initial appeal from the county court's grant of new trial to the circuit court, this Court is compelled to analyze the issue. This Court has determined generally that *1175 an order granting a new trial is interlocutory in nature, meaning it is not a final judgment and not yet ripe for appeal. Consequently, Sliman's initial appeal from the county court to the circuit court on a matter that was interlocutory in nature was impermissible pursuant to Mississippi caselaw. Therefore, Sliman never had authority to file her appeal with the circuit court, and she never filed a petition for an interlocutory appeal to the Supreme Court. This Court has authorized interlocutory appeals from the county court to the Supreme Court. In fact, this Court notes the implementation of Uniform Circuit and County Court Rule 4.06, which states:
Interlocutory Appeal. An appeal from an interlocutory order in county court may be sought in the Supreme Court as provided in Rule 5 of the Mississippi Rules of Appellate Procedure.
Rule 4.06 was adopted effective July 1, 2008. While the Legislature has enacted Mississippi Code Section 11-51-79, which pertains to appeals from county court to circuit court, statutes do not provide authority for matters of procedure. This Court always has analyzed jurisdiction in matters pending before it via the Mississippi Constitution and the various Mississippi Rules of Court. See Miss. Const. art. 6. Again, the only issue raised in the appeal from county court to circuit court was whether the county court had erred by granting Nguyen's Rule 59 motion for new trial.
¶ 11. The circuit court had no authority under the Rules to review the initial appeal from county court to circuit court. The grant of a new trial was interlocutory in nature and not appealable to the circuit court. Therefore, the county court retains jurisdiction for a new trial. Accordingly, the circuit court's judgment is vacated, and this case is remanded to the county court.
CONCLUSION
¶ 12. Because of the interlocutory nature of the order granting a new trial, it was error for the circuit court to review this case on appeal from the county court. We vacate the circuit court's judgment and remand this case to the County Court of Jackson County for a new trial.
¶ 13. VACATED AND REMANDED.
WALLER, C.J., CARLSON AND GRAVES, P.JJ., DICKINSON, RANDOLPH, LAMAR, KITCHENS AND PIERCE, JJ., CONCUR. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1557890/ | 22 So. 3d 793 (2009)
Lonzo Thomas CARTER, Appellant,
v.
STATE of Florida, Appellee.
No. 1D08-3878.
District Court of Appeal of Florida, First District.
November 20, 2009.
*794 Nancy A. Daniels, Public Defender, and Archie F. Gardner, Jr., Assistant Public Defender, Tallahassee, for Appellant.
Bill McCollum, Attorney General, and Jennifer J. Moore, Assistant Attorney General, Tallahassee, for Appellee.
HANKINSON, J., Associate Judge.
Defendant Lonzo Thomas Carter challenges the denial of his oral motion to withdraw his plea pursuant to Florida Rule of Criminal Procedure 3.170(l) (2008). The defendant argues that since the motion was based on a conflict of interest with his court-appointed attorney, the trial court reversibly erred by failing to appoint conflict-free counsel. We agree and reverse for the trial court to appoint substitute counsel to represent the defendant on his motion.
The defendant moved to withdraw his plea immediately after sentencing. He argued that his counsel had coerced him into pleading guilty by refusing to provide him with a transcript of his co-defendant's deposition, which the defendant claimed contained exonerating information. The defendant's counsel denied that such inducement had occurred. The defendant's counsel claimed he had simply explained to the defendant that the co-defendant's deposition contained no "useful" information, and that the defendant had chosen to plead on his own accord. The trial court denied the motion to withdraw the plea without comment.
In Sheppard v. State, 17 So. 3d 275 (Fla.2009), the Supreme Court detailed the procedure to be followed when a represented defendant brings a pro se rule 3.170(l) motion based on conflict with counsel:
[W]hen a represented defendant files a pro se rule 3.170(l) motion based on allegations giving rise to an adversarial relationship such as counsel's misadvice, misrepresentation, or coercion that led to the entry of the plea ... the trial court should hold a limited hearing at which the defendant, defense counsel, and the State are present. If it appears to the trial court that an adversarial relationship between counsel and the defendant has arisen and the defendant's allegations are not conclusively refuted by the record, the court should either permit counsel to withdraw or discharge counsel and appoint conflict-free counsel to represent the defendant.
This language sets out a two-step process by which a defendant may obtain substitute counsel for his/her rule 3.170(l) motion: (1) a hearing must be held to determine whether the conflict alleged in the motion has arisen; and (2) the trial court must ensure the defendant's allegations are not "conclusively refuted" by the record.
Sheppard's two-part process clarifies at least two misimpressions concerning when conflict-free counsel should be appointed.
First, it corrected any misimpression, drawn from broad language in our caselaw, that the substitution of counsel should be automatic whenever a rule 3.170(l) motion is filed. See Grier v. State, 14 So. 3d 252, 253 (Fla. 1st DCA 2009) (stating "[t]his Court has consistently held that trial courts must appoint conflict-free counsel once a defendant indicates his desire to avail himself to the rule 3.170(l) procedure"); Lester v. State, 820 So. 2d 1078 (Fla. 1st DCA 2002).
*795 Second, Sheppard corrected the misimpression, also conveyed in our caselaw, that a defendant can receive conflict-free representation without first justifying his/ her request in a hearing. See Holifield v. State, 717 So. 2d 69 (Fla. 1st DCA 1998) (stating substitute counsel must be appointed following the mere filing of a motion to withdraw a plea alleging "misrepresentation, coercion or duress by defense counsel").
Sheppard also clearly states that a general allegation of a conflict of interest with counsel is not sufficient to warrant a hearing. The motion must contain specific allegations showing an adversarial relationship "such as counsel's misadvice, misrepresentation, or coercion that led to the entry of the plea." Sheppard, 17 So.3d at 275.
It is clear from the record in the instant case that an adversarial relationship had developed between the defendant and his counsel. At the conclusion of the sentencing hearing, the defendant moved to withdraw his no-contest plea, claiming he had entered the plea only because his counsel had refused to provide him with a transcript of his co-defendant's deposition. When given the chance to respond, the defendant's counsel denied any wrongdoing and claimed the deposition would have been useless to the defense. Since the defendant and his counsel were each given the opportunity to discuss the rule 3.170(l) motion, and considering that the defendant's allegations were not conclusively refuted by the record, the trial court should have appointed conflict-free counsel on the defendant's motion to withdraw his plea. See Nelson v. State, 18 So. 3d 1190, 1191-92 (Fla. 1st DCA 2009).
Given the foregoing, we reverse the open-court denial of the oral motion to withdraw the plea and remand for the trial court to effectuate the defendant's right to conflict-free representation.
REVERSED and REMANDED.
HAWKES, C.J., and CLARK, J., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1560362/ | 945 A.2d 841 (2007)
2007 VT 140
Lauren McCLEERY and James McCleery
v.
WALLY'S WORLD, INC., Walter Radicioni, Jr., Two Radicioni Brothers, Walter Radicioni and Elizabeth Radicioni.
No. 06-491.
Supreme Court of Vermont.
December 31, 2007.
Present: REIBER, C.J., and DOOLEY, JOHNSON, SKOGLUND and BURGESS, Associate Justices.
ENTRY ORDER
¶ 1. Defendants appeal from the trial court's order granting plaintiffs' request for relief from judgment under Vermont Rule of Civil Procedure 60(b). We reverse the court's decision.
¶ 2. The record indicates the following. In February 2004, plaintiffs filed a pro se complaint against defendants, raising claims of negligence and loss of consortium. The claims were based on injuries allegedly sustained by Mrs. McCleery in February 2001 when she slipped and fell on ice in defendants' parking lot. The parties, represented by counsel, mediated their dispute and reached an oral settlement agreement in November 2004. They agreed that defendants would pay plaintiffs $14,000 and, in exchange, plaintiffs would execute general release forms. Plaintiffs subsequently refused to sign the release forms, and in January 2005, defendants moved to enforce the settlement agreement. At the enforcement hearing, plaintiffs, who were then proceeding pro se, argued that they had agreed to the settlement offer on the *843 condition that defendants pay them within ten days of the mediation session. They asserted that they did not sign the release forms because this condition was not met and because they now believed that the settlement offer was inadequate. Plaintiffs indicated that they wanted to try the case and "take their chances" in court.
¶ 3. The court rejected these arguments in a March 2005 order. It found no support whatsoever for plaintiffs' assertion that the parties had agreed that payment would be made within ten days, and it found no grounds to invalidate the agreement. As the court explained, the evidence showed that plaintiffs had engaged in mediation while represented by experienced counsel; they had the opportunity to discuss the merits of their case; their positions were conveyed by the mediator to defendants; they made compromises in order to settle all matters between them; and they freely agreed to the essential terms of the settlement. The court therefore granted defendants' motion to enforce.
¶ 4. In April 2005, Mr. McCleery filed a motion for reconsideration, alleging that his wife had been "functioning in a diminished capacity" during the mediation process, which had given defendants "an unconscionable advantage." The court denied the motion, concluding that Mr. McCleery failed to identify any errors of fact or law based on evidence presented at the hearing. It noted that both plaintiffs had been given the opportunity at the enforcement hearing to raise any arguments as to why the agreement should not be enforced, and Mr. McCleery was raising his wife's alleged incapacity for the first time. Plaintiffs then filed a second motion for reconsideration, in which Mr. McCleery asserted that he had learned only recently that his wife had been functioning in a diminished capacity during the mediation session, and that if he had been aware of her condition, he would not have been so passive in accepting the settlement offer. The court denied the motion in June 2005.
¶ 5. In August 2005, defendants moved to dismiss the action explaining that plaintiffs continued to refuse to comply with the settlement agreement and the court's order enforcing that agreement. Defendants argued that they had done all that they reasonably could under the circumstances to resolve the case, and in light of plaintiffs' actions, the only remaining recourse was to dismiss the action with prejudice under V.R.C.P. 41(b)(2). In late September 2005, the court issued an order dismissing the action "without prejudice" based on defendants' motion to dismiss.
¶ 6. In October 2005, Mr. McCleery filed a motion to reconsider, reiterating many of the same arguments raised in his earlier motions. While this motion was pending, Mr. McCleery also filed a notice of appeal, as well as a second motion to reconsider. The trial court did not rule on the motions to reconsider in light of the notice of appeal. On December 13, 2005, Mr. McCleery's appeal was dismissed due to his failure to comply with an order of this Court.
¶ 7. Shortly thereafter, on December 23, 2005, plaintiffs filed a motion to reopen in the trial court. Plaintiffs explained that they had contacted defendants' attorney on December 16, and informed him that they were now willing to abide by the mediation agreement, and they would sign the release forms in exchange for $14,000. Defendants' attorney refused to provide them with a check, noting plaintiffs' repeated refusal to abide by the terms of the agreement and the subsequent dismissal of their case. Defendants' attorney indicated that due to plaintiffs' behavior, defendants had *844 not received the benefit of their bargain, and it was defendants' position that plaintiffs breached the agreement and defendants were no longer bound by it. In light of this exchange, plaintiffs asked the trial court to reopen the case and set the matter for trial. In February 2006, Mr. McCleery filed another motion to reconsider the dismissal order, enclosing a letter from his doctor who indicated that Mr. McCleery had been taking medication that could have impaired his ability to participate fully in court proceedings. Several weeks later, plaintiffs filed a motion to enforce the settlement agreement. They reiterated their belief that defendants had breached the agreement by failing to tender payment within ten days of the mediation session, and they stated that defendants had also breached the agreement by refusing to pay them the agreed-upon sum.
¶ 8. In an April 2006 entry order, the trial court granted plaintiffs' motion to reopen under V.R.C.P. 60(b). Although it found plaintiffs' motion unclear, it concluded that the case should be reopened to determine the precise effect of the September 2005 dismissal order. The court explained that in moving to dismiss, defendants had not argued that plaintiffs breached the settlement agreement or that they would no longer be bound by the agreement if the case were dismissed, and the dismissal order did not contain any language to this effect. Refusing to reopen the case, the court reasoned, would unfairly allow defendants to impose their interpretation of the dismissal order on plaintiffs, even though the effects that defendants sought had not been specifically stated in the order. The court thus reinstated the case at its status prior to the dismissal, subject to any arguments that defendants might have that they were deprived of the benefit of their bargain. This interlocutory appeal followed.
¶ 9. As an initial matter, we reject defendants' assertion that the trial court lacked jurisdiction to consider plaintiffs' post-appeal Rule 60(b) motion. Plaintiffs filed their motion to reopen after Mr. McCleery's appeal was dismissed, and it is well-settled that trial courts have jurisdiction to consider such motions without first seeking leave from appellate courts. See 12 J. Moore, et al., Moore's Federal Practice § 60.61, at 60-215 (3d ed.2007) (discussing identical federal rule and explaining that Rule 60(b) motions are considered a continuation of original proceedings, and if trial court had jurisdiction when suit was filed, it has jurisdiction to entertain a Rule 60(b) motion); Standard Oil Co. of Cal. v. United States, 429 U.S. 17, 18-19, 97 S.Ct. 31, 50 L.Ed.2d 21 (1976) (trial court has authority to consider post-appeal motions to set aside judgment without first obtaining leave from appellate court); 11 C. Wright, et al., Federal Practice & Procedure § 2873 (2d ed.1995) (explaining that Standard Oil decision resolved question of trial court's power to dispose of Rule 60(b) motion after appellate court has finished with case); cf. Kotz v. Kotz, 134 Vt. 36, 38, 349 A.2d 882, 884 (1975) (trial court lacks authority to consider motions for relief from final judgment while an appeal of that same judgment is pending in this Court). As the United States Supreme Court has explained, the original trial court judgment, like the appellate mandate, "relates to the record and issues then before the court, and does not purport to deal with possible later events." Standard Oil, 429 U.S. at 18, 97 S.Ct. 31. Thus, by acting on a post-appeal Rule 60(b) motion, the trial court "is not flouting the mandate" of the appellate court. Id. Of course, a Rule 60(b) motion can be denied as barred by the doctrine of the "law of the case" if it attempts "to argue over exactly what was finally determined in an appeal." 12 J. Moore, et al., Moore's Federal *845 Practice § 60.67[3], at 60-236. But there is no question that the trial court has the authority to consider such motions and grant them if appropriate.
¶ 10. Nonetheless, we conclude that the trial court erred in granting plaintiffs' motion here because plaintiffs failed to demonstrate that they were entitled to relief under Rule 60(b). See Kotz, 134 Vt. at 40, 349 A.2d at 885 (Supreme Court reviews ruling on Rule 60(b) motion for abuse of discretion, and trial court's decision will not be disturbed unless it "clearly and affirmatively appears" that court abused or withheld its discretion). While the court did not specify which portion of the rule it applied, it appears to have granted relief pursuant to Rule 60(b)(6). That rule allows the trial court to relieve a party from a final judgment, upon such terms as are just, for any reason other than those set forth in the other sections of the rule, as long as the request for relief is made within a reasonable time. V.R.C.P. 60(b)(6). Despite this broad language, and the liberal interpretation given to the rule to prevent hardship or injustice, "interests of finality necessarily limit when relief is available." Riehle v. Tudhope, 171 Vt. 626, 627, 765 A.2d 885, 887 (2000) (mem.). The rule "may not substitute for a timely appeal or provide relief from an ill-advised tactical decision or from some other free, calculated, and deliberate choice of action." Id. Rather, it "is intended to accomplish justice in extraordinary situations that warrant the reopening of final judgments after a substantial period of time." Id.
¶ 11. No such extraordinary circumstances were demonstrated here. As recounted above, plaintiffs' case was dismissed in September 2005 due to their repeated and ongoing refusal to abide by the terms of the November 2004 settlement agreement as well as the court's March 2005 order enforcing that agreement. See V.R.C.P. 41(b)(2) (trial court may dismiss action due to plaintiff's failure "to prosecute or to comply with [the Vermont Rules of Civil Procedure] or any order of court"). Although Mr. McCleery filed a notice of appeal, his appeal was dismissed after he failed to comply with an order of this Court. Now, after repeatedly refusing to abide by the settlement agreement, and failing to challenge the merits of the dismissal order in a direct appeal, plaintiffs argue that they are entitled to have their case reopened and their settlement agreement enforced.
¶ 12. We cannot agree. In this case, plaintiffs are wholly responsible for their own predicament. See 12 J. Moore, et al., Moore's Federal Practice § 60.48[3][b], at 60-188 (explaining that in vast majority of cases finding that extraordinary circumstances exist so as to justify relief under Rule 60(b)(6), "the movant is completely without fault for his or her predicament; that is, the movant was almost unable to have taken any steps that would have resulted in preventing the judgment from which relief is sought"); id. § 60.48[3][c], at 60-122 (stating that a party who violates court rules or orders is not entitled to relief from the resulting judgment) (citing Griffin v. Swim-Tech Corp., 722 F.2d 677, 681 (11th Cir.1984) (upholding trial court's denial of relief under Rule 60(b) where case was "replete with inexcusable delay and numerous unjustified violations of the court's orders")). Contrary to the trial court's decision, this case is not about defendants trying to unfairly force their interpretation of the dismissal order on plaintiffs; rather, it is about plaintiffs trying to escape from the consequences of their own actions.
¶ 13. Plaintiffs had innumerable opportunities during the pendency of this litigation to comply with the settlement agreement *846 and collect the agreed-upon sum. Their refusal to do so resulted in the dismissal of their case. Surely, plaintiffs could not reasonably believe that under these circumstances the settlement agreement survived the dismissal of the underlying action, leaving it enforceable at plaintiffs' election. See also 8 J. Moore, et al., Moore's Federal Practice § 41.50[7][b], at 41-198 (3d ed. 2007) ("When the district court elects to dismiss an action without prejudice under Rule 41(b), the dismissal leaves the parties in the same legal position as if no suit had been filed."). Even if plaintiffs were somehow confused about the effects of the order or believed that their case had been improperly dismissed, whether because of Mr. McCleery's alleged medical incapacity or some other reason, they could have raised these issues on direct appeal. They failed to do so. See 12 J. Moore, supra, § 60.65[1], at 60-222 ("Issues that could and should have been fully settled at trial or on appeal may not be raised for the first time on a Rule 60(b) motion."). Plaintiffs' apparent change of heart comes far too late to revive their action. As the United States Supreme Court explained, "[t]here must be an end to litigation someday, and free, calculated, deliberate choices are not to be relieved from." Ackermann v. United States, 340 U.S. 193, 198, 71 S.Ct. 209, 95 L.Ed. 207 (1950). There are no extraordinary circumstances in this case that warrant relief from final judgment, and plaintiffs' Rule 60(b) motion must therefore be denied.
Reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1560365/ | 945 A.2d 1241 (2008)
2008 ME 61
Kelly WALTON
v.
MAINE SCHOOL ADMINISTRATIVE DISTRICT 52 et al.
Docket: And-07-153.
Supreme Judicial Court of Maine.
Argued: January 18, 2008.
Decided: March 27, 2008.
Donald F. Fontaine, Esq. (orally), Law Offices of Donald F. Fontaine, Portland, ME, for Kelly Walton.
Kaighn Smith, Jr., Esq. (orally), Melissa H. Hewey, Esq., Drummond Woodsom & MacMahon, Portland, ME, for SAD 52.
*1242 Panel: SAUFLEY, C.J., and CLIFFORD, ALEXANDER, LEVY, SILVER, and MEAD, JJ.
SILVER, J.
[¶ 1] Kelly Walton appeals from a summary judgment entered by the Superior Court (Androscoggin County, Gorman, J.) in favor of Maine School Administrative District 52 (SAD 52) on Walton's claim of breach of contract and violation of due process of law as a result of SAD 52's termination of her employment. Walton argues that (1) the arbitration decision that considered Walton's grievance under her Collective Bargaining Agreement does not preclude her claim of breach of her individual contract in state court, and (2) SAD 52 breached the individual employment contract it had with her when it terminated her employment. We affirm the judgment.
I. FACTS
[¶ 2] Walton is a licensed social worker in Maine with a bachelor's degree. She had been practicing social work in her employment for SAD 52 for seventeen years and, before this dispute, had never been required to have or requested to obtain a master's degree. Until this dispute, her job description for school social worker required only a bachelor's degree.
[¶ 3] Walton and SAD 52 agreed to a continuing contract in 1988, under which Walton worked for SAD 52 as a school social worker. She did not teach. Under this contract, Walton could be terminated only "for cause as provided by statute." SAD 52 renewed this contract annually knowing that Walton had only a bachelor's degree. The contract was last renewed on September 1, 2005.
[¶ 4] Walton was also covered under the Collective Bargaining Agreement between SAD 52 and the Tri-Town Teachers' Association. Under the Agreement, "[c]ontinuing contract teachers shall not be dismissed or suffer non-renewal of contract without just cause." Under the Agreement, a grievance can be filed by a teacher whenever "a violation of this contract is claimed to have occurred." A "grievance" refers to a complaint by an employee or by the Association that "a violation of the contract has occurred."
[¶ 5] In 1998, the Maine Medical Assistance Manual, which regulates the provision of school-based rehabilitative services, was amended to require school social workers to possess master's degrees as a condition of that school's receiving Medicaid funds. SAD 52 learned of this requirement in November 2005 and immediately gave Walton a ninety-day notice of termination of her contract. Ninety days later, Walton was terminated. This termination took place five months into her 2005-2006 contract.
[¶ 6] Walton invoked the grievance provisions of the Agreement. At arbitration, the arbitrator found that SAD 52 had the right to terminate Walton's individual contract. While pursuing her grievance pursuant to the Agreement, Walton also filed a complaint in Superior Court, claiming breach of her individual contract and violation of due process of law. Following the arbitrator's decision, the Superior Court found that the arbitration decision had a preclusive effect on Walton's claim of breach of contract. The court also granted SAD 52's motion for summary judgment on the same claim. Walton's appeal followed.
II. DISCUSSION
[¶ 7] We have held that "[a] binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them." Me. Mortgage Co. v. *1243 Tonge, 448 A.2d 899, 902 (Me.1982); see Aguilera v. Pirelli Armstrong Tire Corp., 223 F.3d 1010, 1015 (9th Cir.2000) (stating that "where [a] position in dispute is covered by the CBA, the CBA controls and any claims seeking to enforce the terms of [an agreement] are preempted") (quotation marks omitted) (second alteration in original); see also Fox v. Parker Hannifin Corp., 914 F.2d 795, 801 (6th Cir.1990) (stating that "employees covered by a CBA cannot rely upon the existence of a separate, individual employment contract giving rise to state law claims").[1] The Agreement was executed after Walton's individual contract, and it contains provisions for the termination of employees such as Walton. The Agreement granted arbitration rights to Walton for her termination. Thus, any ability Walton may have had under her individual contract to seek redress in state court for her termination was discharged as a result of the Agreement's execution.[2] The Superior Court therefore did not err as a matter of law in finding that the arbitrator's decision had preclusive effect over Walton's claim of breach of contract or in granting summary judgment in SAD 52's favor. See Cloutier, Barrett, Cloutier & Conley, P.A. v. Wax, 604 A.2d 42, 43-44 (Me.1992).
The entry is:
Judgment affirmed.
NOTES
[1] Although it was not an argument presented to us or, apparently, to the Superior Court, Article 28(C) of the Agreement reads: "When individual contracts with unit employees contain language inconsistent with express language contained in this agreement, the controlling instrument will be this agreement." Both the Agreement and Walton's individual contract provided inconsistent language concerning the proper method for terminating Walton. The Agreement therefore explicitly controls the issue.
[2] Because Walton elected to have her termination arbitrated, she does not now get a second bite at the apple in state court. We do not hold today, however, that Walton would not have had the right to forego arbitration and proceed initially to state court. This issue is not before us, and we do not address it. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/529971/ | 886 F.2d 721
Judson Warren WHITE, Plaintiff-Appellant,v.C.M. WHITE, Warden; A.V. Dodrill, Commissioner ofCorrections, Defendants-Appellees.
No. 88-7141.
United States Court of Appeals,Fourth Circuit.
Argued April 14, 1989.Decided Oct. 3, 1989.
Richard D. Horn, Student Atty. (Nancy Louise Cook, Washington, D.C., American University Washington College of Law, Appellate Advocacy Law Clinic, on brief), for plaintiff-appellant.
Edward Lee Bullman (Charles G. Brown, Atty. Gen., Dana D. Davis, Sr. Asst. Atty. Gen., Charleston, W.Va., on brief), for defendants-appellees.
Before MURNAGHAN, CHAPMAN, and WILKINSON, Circuit Judges.
WILKINSON, Circuit Judge:
1
In this case we must determine if the district court abused its discretion in dismissing without prejudice plaintiff's pro se complaint as frivolous within the meaning of 28 U.S.C. Sec. 1915(d). We find that such dismissal was proper and affirm.
I.
2
Plaintiff Judson Warren White is an inmate at the Huttonsville Correctional Center. On March 25, 1988, plaintiff tried to mail legal correspondence to his attorney. Under prison directives, plaintiff was classified as a non-indigent inmate since he had had $5.00 or more in his prison account on the fifteenth of the month. As a non-indigent inmate, plaintiff was not entitled to free postage during the course of the month. Since plaintiff had no funds remaining in his account on March 25, he was unable to pay the postage on his letters and thus was not permitted to mail his correspondence.
3
On April 21, 1988, plaintiff filed a complaint pursuant to 42 U.S.C. Sec. 1983 in the United States District Court for the Southern District of West Virginia against defendants C.M. Bud White, Warden, Huttonsville Correctional Center, and A.V. Dodrill, Commissioner of Corrections. He alleged, inter alia, that he was deprived of meaningful access to the courts as a result of defendants' policy requiring inmates to pay cash for postage. Plaintiff sought injunctive and declaratory relief. The district court granted plaintiff's request to proceed in forma pauperis but dismissed his complaint without prejudice, sua sponte, as frivolous within the meaning of 28 U.S.C. Sec. 1915(d). Plaintiff appeals.
II.
4
Pursuant to 28 U.S.C. Sec. 1915(d), a trial court may dismiss an in forma pauperis action "if the allegation of poverty is untrue, or if satisfied that the action is frivolous or malicious." See Boyce v. Alizaduh, 595 F.2d 948, 950 (4th Cir.1979). The district court need not look beyond the complaint's allegations in making such a determination. It must, however, hold the pro se complaint to less stringent standards than pleadings drafted by attorneys and must read the complaint liberally. Trial courts, however, are granted broad discretion in determining whether a suit is frivolous or malicious. See, e.g., Flint v. Haynes, 651 F.2d 970, 974 (4th Cir.1981); Boyce, 595 F.2d at 951; Anderson v. Coughlin, 700 F.2d 37, 42 (2d Cir.1983); Holloway v. Gunnell, 685 F.2d 150, 155 (5th Cir.1982); Milton v. Nelson, 527 F.2d 1158, 1160 (9th Cir.1976). Our inquiry is thus limited to whether dismissal was an abuse of discretion. See Camp v. Oliver, 798 F.2d 434, 437 (11th Cir.1986).
5
The Supreme Court recently addressed the Sec. 1915(d) standard for dismissal of frivolous claims in Neitzke v. Williams, --- U.S. ----, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989). The question before the Court was whether a complaint filed in forma pauperis which fails to state a claim under Federal Rule of Civil Procedure 12(b)(6) is automatically frivolous under Sec. 1915(d). While noting that there is "considerable common ground" between the standards, id., 109 S.Ct. at 1833, the Court ruled that failure to comply with 12(b)(6) does not necessarily dictate dismissal under Sec. 1915(d).
6
In reaching its decision, the Neitzke Court recognized that the purpose of Sec. 1915(d) is "to discourage the filing of, and waste of judicial and private resources upon, baseless lawsuits that paying litigants generally do not initiate because of the costs of bringing suit and because of the threat of sanctions for bringing vexatious suits under Federal Rule of Civil Procedure 11." Id. 109 S.Ct. at 1832-33. In order to further this goal while still protecting the rights of indigent litigants under the in forma pauperis statute, the Court announced that a complaint should be dismissed as frivolous "where it lacks an arguable basis either in law or in fact." Id. at 1831.
7
Applying this standard to the facts of its case, the Court affirmed the circuit court's refusal to permit the dismissal of a prisoner's Sec. 1983 claim alleging that he had failed to receive proper medical treatment in violation of his Eighth Amendment rights. The prisoner's complaint alleged that he had notified prison officials that he suffered from a brain tumor, and that they had refused to treat him. It failed, however, to state a claim of "deliberate indifference to [his] serious medical needs," as required in Eighth Amendment suits. The circuit court ruled that given the complaint's factual allegations, it could not determine with certainty that the prisoner was "unable to make any rational argument in law or fact to support his claim for relief," and the complaint therefore could not be considered frivolous. Id. at 1830; Williams v. Faulkner, 837 F.2d 304, 308 (7th Cir.1988).
8
In the case before us, the district court did not abuse its discretion in dismissing the complaint. Unlike the complaint at issue in Neitzke, plaintiff's complaint failed to contain any factual allegations tending to support his bare assertion that he was deprived by prison policy of meaningful access to the courts. Plaintiff's complaint speculated that the papers "might have helped his attorney." Plaintiff did not allege, however, any detriment to his state appeal as the result of his inability to mail the letter in question. Likewise, he does not dispute that he had eight months to appeal his conviction, during which time he could have informed his attorney of the information in the letter in question at a time when he concededly had funds in his prison account. Nor does he dispute that he had access to a telephone, with which he could have communicated the relevant information to his attorney.
9
It is well settled that "[p]risoners do not have an unlimited right to free postage in connection with the right of access to the courts. Reasonable regulations are necessary to balance the rights of prisoners with budgetary considerations." Twyman v. Crisp, 584 F.2d 352, 359 (10th Cir.1978). To state a claim such as this, a prisoner must provide some basis for his allegation that the delay or failure in delivering his legal mail deprived him of meaningful access to the courts. See King v. Atiyeh, 814 F.2d 565, 568 (9th Cir.1987); Hoppins v. Wallace, 751 F.2d 1161, 1162 (11th Cir.1985); Twyman, 584 F.2d at 359. Plaintiff's complaint contained no such allegation.
10
Pro se complaints are to be read liberally, but Sec. 1915(d) does not demand that we conclude "White had alleged that he was appealing a criminal conviction returned on the planet Saturn," before such a complaint would warrant dismissal sua sponte as frivolous. See dis. op. infra, at 732 n. 13. While we do not require that a plaintiff always allege some actual injury in order to avoid dismissal on grounds of frivolousness, we do think it was within the statutory discretion of the district court to dismiss this speculative a complaint, which even appointed counsel on appeal concedes to be "discursive." Although the plaintiff in Neitzke prayed for relief at law, and claims of denial of meaningful access will generally seek relief which is prospective, we do not think such differences are dispositive. The district court's view that this complaint should have contained some allegation of adverse consequences allows a federal court to avoid becoming embroiled in the endless litigation of abstract dissatisfactions with prison policies.
11
Analogous is the rule adopted in some form by every circuit that civil rights plaintiffs must allege with specificity facts to support their claims. See Hobson v. Wilson, 737 F.2d 1, 29-30 & n. 87 (D.C.Cir.1984) (reviewing cases from each circuit). Federal courts have insisted that such plaintiffs allege with specificity some minimum level of factual support in part "to weed out at an early stage frivolous claims." Hynson v. City of Chester Legal Dept., 864 F.2d 1026, 1031 n. 13 (3d Cir.1988); see also Slotnick v. Staviskey, 560 F.2d 31, 33 (1st Cir.1977) (requiring that facts be pled with specificity "[i]n an effort to control frivolous conspiracy suits under Sec. 1983"). Similarly, Sec. 1915(d) seeks to forestall frivolous pro se lawsuits that would not be brought by paying litigants. It is commonsensical that Sec. 1915(d) would require that pro se complaints likewise contain some minimum level of factual support for their claims.
12
In Neitzke, the Court noted that "[t]he brevity of Sec. 1915(d) and the generality of its terms have left the judiciary with the not inconsiderable task[ ] ... of giving content to Sec. 1915(d)'s indefinite adjectives." Neitzke, 109 S.Ct. at 1831. Although the Court provided some guidance by defining frivolousness as lacking "an arguable basis either in law or in fact," id., district courts which must apply Sec. 1915(d) on a day-to-day basis and in a myriad of contexts obviously will play a major role in fleshing out the standard. We do not intend to overturn lightly their judgments in this regard. We need not now attempt to provide an exhaustive definition of frivolousness. It is sufficient to hold that the district court did not abuse its discretion in dismissing this complaint. The dismissal, moreover, was without prejudice, and plaintiff will have ample opportunity to cure any deficiencies in his pleading.
The judgment of the district court is
13
AFFIRMED.
MURNAGHAN, Circuit Judge, dissenting:
14
By affirming the district court's sua sponte dismissal of White's complaint, the majority acts swiftly to slam tight the federal courthouse doors to pro se prisoners who come to us with arguably meritorious complaints. It does this despite recent pronouncements by the Supreme Court that the doors should remain open, at least at the initial pleading stage, as long as the complaint is not frivolous. I believe it is clear, upon the mandated liberal reading of the complaint, that White has raised an arguable basis in both law and fact that the state deprived him of meaningful access to the courts. Moreover, the district court abused its discretion in dismissing sua sponte White's complaint before White had an opportunity to discover and to attempt to correct any perceived deficiencies in his pleading. Finally, the majority has erected an insurmountable fence around the same courthouse by adopting a definition of actual injury inappropriate to the facts in the case before the Court. Because of these concerns, more fully developed below, I dissent.I. In Forma Pauperis Complaints
15
The trial court dismissed White's in forma pauperis complaint as frivolous under 28 U.S.C. Sec. 1915(d). It was authorized to do so only if White's complaint lacked "an arguable basis either in law or in fact." Neitzke v. Williams, --- U.S. ----, 109 S.Ct. 1827, 1831, 104 L.Ed.2d 338 (1989). See Boyce v. Alizaduh, 595 F.2d 948, 950 (4th Cir.1979). In making that determination, the district court is obligated to construe the complaint liberally. See Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972) (inartfully pleaded allegations of the pro se complaint are held to less stringent standards than formal pleadings drafted by lawyers); Boyce, supra, at 957 (district court may not arbitrarily exercise its discretion under 28 U.S.C. Sec. 1915(d) in evaluating the frivolity of a pro se complaint; it is an abuse of discretion to dismiss an inartfully pleaded complaint where a sympathetic reading of the complaint indicates that it is not beyond doubt that the plaintiff could prove a set of facts in support of his claim which would entitle him to relief).
16
I emphatically disagree with the majority's (and the district court's) conclusion that White was not "arguably" entitled to relief and that his complaint failed to state a claim because he did not allege actual injury.1 Moreover, by merely citing the case for its general definition of frivolity, the majority's opinion pays simple lip service to the recent Supreme Court decision in Neitzke. The majority appears to ignore what the Supreme Court had to say about the differences between dismissal under Rule 12(b)(6) and dismissal under Sec. 1915(d) and the trial court's proper role with respect to both inquiries.
17
In Neitzke v. Williams, --- U.S. ----, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989), plaintiff brought a Sec. 1983 action claiming that he was deprived of liberty and property without due process of law when the penal institution transferred him to another cellhouse. Williams also claimed that he had been subjected to cruel and unusual punishment in violation of the eighth amendment as a result of certain prison doctors' refusal to treat a diagnosed brain tumor and his forced continuation of prison work. The district court dismissed the complaint sua sponte as frivolous under Sec. 1915(d) because it failed to state a claim under Rule 12(b)(6).
18
The Supreme Court addressed the question of whether a complaint filed in forma pauperis which fails to state a claim under Federal Rule of Civil Procedure 12(b)(6) is automatically frivolous within the meaning of 28 U.S.C. Sec. 1915(d). A unanimous Supreme Court emphatically held "no." To reach the issue, the Court had to define the term "frivolous" for the first time since the statute was enacted in 1892. The Court maintained that "a complaint, containing as it does both factual allegations and legal conclusions, is frivolous where it lacks an arguable basis either in law or in fact." Id. 109 S.Ct. at 1831. In carefully articulated reasoning, the Court explained that the essential difference between a Rule 12(b)(6) dismissal for failure to state a claim and a Sec. 1915(d) dismissal for frivolity is that the former only authorizes a judge to dismiss a claim based on an indisputably meritless legal theory while the latter authorizes a judge to "pierce the veil of the complaint's factual allegations and dismiss those claims whose factual contentions are clearly baseless." Id. at 1833. The additional screening purpose which Sec. 1915(d) provides is "designed largely to discourage the filing of, and waste of judicial and private resources upon, baseless lawsuits that paying litigants generally do not initiate because of the costs of bringing suit and because of the threat of sanctions for bringing vexatious suits under Federal Rule of Civil Procedure 11." Id. at 1832-33. Therefore, the Supreme Court held that a complaint is frivolous if it has no arguable basis in law or fact. Id. at 1831.
19
To aid in our understanding of the frivolity test, the Court stated:Examples of the former class [inarguable in law] are claims against which it is clear that the defendants are immune from suit ... and claims of infringement of a legal interest which clearly does not exist.... Examples of the latter class [inarguable in fact] are claims describing fantastic or delusional scenarios, claims with which federal district judges are all too familiar.
20
Id. at 1833. Applying the test, the Supreme Court held that there was no arguable legal basis to Williams' due process claim. On the eighth amendment claim, however, the Supreme Court held that dismissal had been improper despite the clearly omitted allegation in Williams' complaint that the defendants had acted with deliberate indifference to his medical needs.
21
The Supreme Court then explained that when there is an arguable legal basis, Rule 12(b)(6) and Sec. 1915(d) serve replicate functions in authorizing dismissal. However, it cautioned that dismissal in such a case while appropriate under Rule 12(b)(6), is inappropriate on frivolity grounds under Sec. 1915(d). Id. In reaching that conclusion, the Supreme Court pointed out that Congress' principal objective in enacting the in forma pauperis statute was " 'to assure equality of consideration for all litigants.' " Id. at 1834 (quoting Coppedge v. United States, 369 U.S. 438, 447, 82 S.Ct. 917, 922, 8 L.Ed.2d 21 (1962)); see also H.R.Rep. No. 1079, 52d Cong., 1st Sess., 1 (1892). It reasoned that because "a finding of a failure to state a claim does not invariably mean that the claim is without arguable [legal] merit ...," id., 109 S.Ct. at 1833, to permit dismissal on grounds of frivolity would deny indigent litigants the protections, afforded to paying litigants, of "the adversary proceedings contemplated by the Federal Rules." Id. at 1834. Thus, in those cases where the complaint, when construed liberally, has an arguable legal basis, notice of deficiencies in the complaint raised by motions to dismiss and an opportunity to amend, must be similarly afforded to pro se plaintiffs. As the Court explained:
22
These procedures alert him to the legal theory underlying the defendant's challenge, and enable him meaningfully to respond by opposing the motion to dismiss on legal grounds or by clarifying his factual allegations so as to conform with the requirements of a valid legal cause of action. This adversarial process also crystallizes the pertinent issues and facilitates appellate review of a trial court dismissal by creating a more complete record of the case.
23
Id. at 1834 (citation omitted).
24
With these principles in mind, we can now proceed to evaluate White's complaint and review the district court's sua sponte dismissal of it under Sec. 1915(d).
II. The Complaint
25
The district court dismissed White's complaint as frivolous pursuant to Sec. 1915(d) "[b]ecause the plaintiff has not and could not state a cause of action under this set of facts...." White v. White, 2:88-0555, Memorandum Opinion and Order dated April 21, 1988, at 2 ("Memorandum Opinion"). It determined that the "basic problem and fatal flaw ... in plaintiff's case is that he has failed to allege actionable injuries." Id.
26
The majority begins its opinion by mischaracterizing White's complaint as alleging that he was deprived of meaningful access to the courts only because the prison postal regulation required inmates to pay cash for postage. Maj. op. at 722, supra.2 However, a careful reading of White's complaint clearly reveals that White alleged that he was indigent, that he had legal mail to send to his attorney for his criminal appeal, that he requested the prison official to post his letter, that the prison official refused to do so, that White informed the prison official that she was limiting his right of access to the courts, that he had a deadline by which to send the legal mail, and that he would sign a voucher against his future earnings to pay for the stamp now.3 The issue is not only whether White had to pay in cash or could pay by voucher, it is primarily whether the state was obligated to provide postage for White's legal mail on March 25, 1988 because he was without funds to pay for it himself.4 Thus, White's complaint directly implicates his right to meaningful access to the courts as explained in Section III below. White's complaint presents an arguable legal and factual basis which is deserving of the procedural protections advanced by the Federal Rules of Civil Procedure.
III. Meaningful Access to the Courts
27
Due process mandates that prisoners must be afforded access to the courts "in order to challenge unlawful convictions and to seek redress for violations of their constitutional rights." Procunier v. Martinez, 416 U.S. 396, 419, 94 S.Ct. 1800, 1814, 40 L.Ed.2d 224 (1974); see Johnson v. Avery, 393 U.S. 483, 485-87, 89 S.Ct. 747, 748-50, 21 L.Ed.2d 718 (1969). "Regulations and practices that unjustifiably obstruct ... the right of access to the courts are invalid." Procunier, 416 U.S. at 419, 94 S.Ct. at 1814. More particularly, the Supreme Court recognized that the state had an affirmative duty to provide meaningful access to the courts for incarcerated individuals. Bounds v. Smith, 430 U.S. 817, 97 S.Ct. 1491, 52 L.Ed.2d 72 (1977). In clear language the Supreme Court pronounced that "[i]t is indisputable that indigent inmates must be provided at state expense with paper and pen to draft legal documents, with notarial services to authenticate them, and with stamps to mail them." Id. at 824-25, 97 S.Ct. at 1496 (emphasis added).
28
Bounds has not been interpreted to require that prisons provide unlimited free postage to inmates who wish to communicate their legal matters to the courts or their attorneys. See King v. Atiyeh, 814 F.2d 565 (9th Cir.1987); Chandler v. Coughlin, 763 F.2d 110, 114 (2d Cir.1985). Such a holding would work a hazard upon prison administrators who must be given the chance to adopt reasonable policies to regulate the receipt, distribution and delivery of incoming mail and the collection and posting of outgoing mail within their institutions. See cf. Bach v. Coughlin, 508 F.2d 303, 307-08 (7th Cir.1974) (reasonable regulations are necessary to balance the rights of prisoners with budgetary considerations). However, a prison postal regulation which is unreasonable and which results in denying an individual inmate meaningful access to the courts violates Bounds. Id. Here there is a grave question as to the reasonableness of the prison postal regulation.
29
As we learned in more detail on appeal,5 the prison directives operated to judge the plaintiff, Judson Warren White, on a non-individualized basis and that seems suspect to me. On the 15th of each month, a status of indigency or non-indigency was decided by prison officials. Prisoners who were determined to be non-indigent on the 15th of a month remained arbitrarily in that category until reassessment of their status on the 15th of the following month, no matter to what extent one's circumstances had changed in the interim. On March 15, under the applicable criteria, which we may assume were correctly applied, White was apparently determined to be non-indigent.6 He remained in non-indigent status on March 25, 1988, regardless of the change in affairs following the lapse of ten days. On that basis, as non-indigent on March 25, 1988 (though indigent in fact), he was not provided postage for a letter to his lawyer or permitted to sign a voucher insuring future payment of a stamp. As a consequence of the prison policies--determining indigent status only once a month and prohibiting the purchase of a stamp by credit--the letter which White attempted to have mailed was neither sent to nor received by his attorney in time to consider its contents in preparation of White's criminal appeal.
IV. Actual Injury
30
The majority depends, for the conclusion it has reached, to a great extent on the fact that "[t]o state a claim ..., a prisoner must provide some basis for his allegation that the delay or failure in delivering his legal mail deprived him of meaningful access to the courts." Majority op. at 723. The majority then determines that White's averment that the papers "might have helped his attorney" is mere speculation. Moreover, it finds nothing in the complaint to suggest that White suffered any actual injury. The majority errs first in its legal premise and secondly in its factual analysis.
31
First, the cases upon which the majority relies do not support its sweeping conclusion that White has failed to allege an actual injury. In two of those cases, the plaintiffs were not deprived of meaningful access to the courts, i.e. their access was not cut off completely but was merely delayed.7 The third case I read quite differently from the majority and find it extremely beneficial to White's appeal.
32
In the first case, Twyman v. Crisp, 584 F.2d 352 (10th Cir.1978), the plaintiff brought a Sec. 1983 suit challenging a prison postal policy which permitted two free stamps a week to inmates who have less than $5.00 in their accounts. The Tenth Circuit, observing that "[s]ome delays in access to the courts are inevitable[,]" held that Twyman "had not demonstrated denial of his right of access to the courts." Id. at 359 (emphasis in original). In reaching that conclusion, the Tenth Circuit explained that "Twyman has not had a case dismissed or any other court sanctions imposed simply because he has had to wait for awhile to mail something." Id.
33
Similarly, in Hoppins v. Wallace, 751 F.2d 1161 (11th Cir.1985), the plaintiff challenged the stamp policy permitting each indigent inmate two free 20-cent stamps a week and requiring them to pay for additional postage out of their own funds. The Eleventh Circuit adopted the reasoning of the Twyman decision and upheld the regulation as reasonable under the undisputed facts. The Eleventh Circuit noted that Hoppins was very litigious and would have used many more stamps than two a week. However, it upheld dismissal of the case because Hoppins could not present any evidence that any of his numerous cases had been dismissed or that any sanction had been imposed by the courts as a result of his having to wait a week to mail papers to the court.
34
Those cases stand for the proposition, which I believe is a correct one, that delay itself is not an injury which is actionable under Bounds and its progeny. Bounds is concerned with denial of access to the courts and in both Twyman and Hoppins the plaintiffs, while denied immediate access to the courts, eventually gained access to the courts without any repercussions. In other words, mere delay in access to the courts does not violate the constitution. It is only when that delay results in prejudice to the plaintiff's actual access to the courts and somehow interferes with, e.g. sanctions, or effectively denies altogether the right, e.g. statute of limitations expires, that a plaintiff has a cognizable complaint. There simply is no deprivation of the right of access to the courts where the plaintiff cannot file a lawsuit today as opposed to tomorrow, next week or next month, without some showing that the delay interfered with or prejudiced the actual access to the courts. But to equate unblemished delay in reaching the courts with an outright cutting off of that access is to spurn the constitutional right itself.8
35
More in point is the case of King v. Atiyeh, 814 F.2d 565, 568 (9th Cir.1987), in which the plaintiff challenged the postal policy which permitted three free letters a week. The Ninth Circuit recognized that although the case law holds that a plaintiff does not have a right to unlimited free postage, it had not established the minimal requirements by which the state could fulfill its obligation to provide indigent inmates with adequate access to the courts. Consequently, the Ninth Circuit explained that a reviewing court "should focus on whether the individual plaintiff before it has been denied meaningful access." Id. at 568. See also Twyman, 584 F.2d at 359. In King, the district court had dismissed the complaint for failure to state a claim because the complaint "failed to allege that the state's policy actually interfered with [the plaintiffs'] ... access to the courts." King, 814 F.2d at 568. The Ninth Circuit reversed and remanded, holding that "a close reading of the complaint indicates ... that 'plaintiffs have often found it necessary to communicate with the courts more than three (3) times per week and often the pleadings need more than twenty (20) cents postage.' " Id. at 568. Therefore, plaintiffs stated a claim when they alleged that the policy interfered with, i.e. denied them, access to the courts which they claimed to require weekly, regardless of the content of those communications.
36
With these principles in mind, we can now turn to evaluate White's complaint to determine whether he has alleged the requisite injury. Focussing, as we must, on the question of whether White has been denied access to the courts, it becomes clear that he has averred a sufficient injury. White attempted on March 25 to mail legal mail to his attorney so that his attorney could consider its contents in preparation of filing White's appeal of his criminal conviction due on April 8. On March 25, White was told that his account was overdrawn and because he was without the requisite $.25 to purchase his own stamp, his letter could not be mailed. Although indigent in fact, White's now-artificial classification as non-indigent prevented him from having his letter mailed. Apparently, under the operation of the pertinent postal policy, White would not be eligible for free stamps until April 15, 1988, seven days after his appeal had to be filed. Therefore, his access has not only been delayed, but delayed to the point that he has missed a filing deadline. That is precisely the kind of actual injury which effectively results in a denial to this individual of his right of access to the courts.
37
The majority focuses its attention on the statement made by White in his complaint that the information he wished to send "might have helped his attonrey [sic]." It holds that such speculation cannot amount to actual injury.9
38
Fundamentally, that ignores, in my mind, the fact that the communication White sought to activate through use of the post was to a lawyer by one incarcerated in prison. That was, presumptively at least, privileged as a client-lawyer communication and should be immune from disclosure at the initial pleading stage. The majority's approach would erode to a large extent the privilege attaching generally to legal correspondence.10 At the very least, it was premature to dismiss the complaint as frivolous, without requiring an answer, since an inquiry could have been and should have been made by the district court as to whether in the lawyer's view the information (without disclosure of what it was) was material to some legal effort or defense of the plaintiff.
39
Finally, the majority condemns White's complaint because White had "eight months to appeal his conviction, during which time he could have informed his attorney of the information ..." and "he had access to a telephone...." Majority Op. at 723. Notwithstanding the fact that these arguments, now made by the state on appeal, were not placed before the district court for obvious reasons, I find the points quite ironic given the majority's criticism of White's alleged injury as speculative. To conclude that White could phone his attorney when he had no money is pure conjecture. To presume that White could clarify the trial record in a short phone call or that he could even reach his attorney when he attempted to call fails to afford appropriate concern about the regulation of phone calls in a prison. Furthermore, to infer that everything White might have ever wished to communicate to his attorney about his appeal should have occurred to him eight months ago is entirely unrealistic and unreasonable. White may have just received a copy of the trial transcript which prompted his need to write his attorney. Finally, White's brief reveals a new and completely relevant fact, which appears to have escaped the majority's attention, i.e. that his appeal was indeed dismissed, perhaps rendering much, if not all, of the eight month period irrelevant.
40
Of course, all of that just goes to highlight how arguable the case is and what a waste of time it has been on appeal to attempt to understand what really occurred in the absence of any factual development in the district court. See Jones v. Morris, 777 F.2d 1277, 1281 (7th Cir.1985) ("responsive pleadings might produce a more secure ground for disposition at the trial level and render useless any appeal").
41
Lastly, I wish to emphasize that I dissent with the full awareness of the condemnation heard from both district and appellate court judges concerning the rising number of pro se prisoner complaints filed under Sec. 1983 over recent years. Despite the staggering number of cases filed, the percentage of claims which withstand motions to dismiss and eventually reach trial has remained absolutely low. See Hernandez v. Denton, 861 F.2d 1421, 1431 (9th Cir.1988) (Aldisert, J., concurring and dissenting).11
42
Indeed, the Second Circuit has eloquently expressed the commonly-held view about the merits (or demerits) of in forma pauperis complaints:
43
Persons proceeding in forma pauperis are immune from imposition of costs if they are unsuccessful; and because of their poverty, they are practically immune from later tort actions for "malicious prosecution" or abuse of process. Thus indigents, unlike other litigants, approach the courts in a context where they have nothing to lose and everything to gain. The temptation to file complaints that contain facts which cannot be proved is obviously stronger in such a situation. For convicted prisoners with much idle time and free paper, ink, law books, and mail privileges the temptation is especially strong. As Justice Rehnquist has noted, "Though [an inmate] may be denied legal relief, he will nonetheless have obtained a short sabbatical in the nearest federal courthouse." Cruz v. Beto, 405 U.S. 319, 327[, 92 S.Ct. 1079, 1084, 31 L.Ed.2d 263] (1972) ( [Rehnquist, J.,] dissenting).
44
....
45
It is plain to this Court that courts need an extra measure of authority when faced with actions proceeding in forma pauperis--particularly where the action is brought by a prisoner seeking damages. And it is this court's conclusion that Congress has granted that extra authority by enacting 28 U.S.C. Sec. 1915(d).
46
Anderson v. Coughlin, 700 F.2d 37, 43 (2d Cir.1983) (quoting Jones v. Bales, 58 F.R.D. at 463-64).
47
Such concerns, strenuously echoed at oral argument by the majority, while often-times legitimate and borne out by historical fact, must be addressed to Congress. In reviewing White's complaint for an arguable basis in law and fact, our role is "not to make policy, but to interpret [and apply] a statute." Neitzke, 109 S.Ct. at 1832. Furthermore, I am satisfied that the case before us differs in critical ways which operate to alleviate the concerns. First, and foremost, the criticisms rest on the explicit premise that the very well established requirement that prisoners be provided with, inter alia, mail privileges increases the temptation to file frivolous suits which clog up the federal courts. However, White's complaint contradicts the premise because his suit contests his right to those very mail privileges which were denied to him. If the goal is to reduce prisoner complaints in the federal courts, presumably in a constitutional manner, then the goal was not achieved here by denying White a stamp or alternative method of mailing his letter. The cost of a $.25 stamp has generated yet another Sec. 1983 piece of litigation--the proceeding in the district court and on appeal to this Court--which has been far more time consuming and costly.
48
Second, White did not want a "sabbatical to the nearest federal courthouse." He wanted a stamp to mail a letter to his attorney concerning his underlying state criminal appeal. It is only as a result of that denial that, at least in the case here, White has become a litigant in the federal system.
49
Finally, although I hesitate to suggest that an underlying criminal matter is presumptively less-often frivolous than an underlying civil suit, consideration must be given to other constitutional rights which are affected and potentially denied when the question of access to the courts (or to attorneys) involves a criminal defendant's prosecution or a prisoner's appeal of his or her conviction. Particularly as those relate to the right to counsel, a bedrock right which insures fair, reliable trials and the continuing credibility of the criminal justice system,12 the access pursued by White must be presumptively nonfrivolous and its confidentiality must be protected.
50
When read under the standard13 enunciated in Haines v. Kerner, White's complaint alleges an arguable basis in both law and fact under Bounds and its progeny. I, therefore, dissent.
1
Although the district court dismissed the complaint as frivolous under Sec. 1915(d), the reasons given suggest that the standard followed by the district court was more appropriate to a motion to dismiss under Rule 12(b)(6) for failure to state a claim
2
Indeed, the district court had similarly limited White's complaint. It stated that
From a reading of the complaint, it is apparent that plaintiff complains that the defendants have established a policy at Huttonsville Correctional Center which requires inmates to pay for the postage on their outgoing mail, even legal mail, that is, inmates cannot get credit for the postage and pay later.
Memorandum Opinion at 2. Given its narrow interpretation of the complaint, the district court not surprisingly held that the "policy requiring inmates to pay cash for postage is not arbitrary or unreasonable." Id.
The district court utterly fails to comprehend White's complaint. White does not only suggest that the denial of a voucher with which he could have purchased a stamp constituted a denial of his constitutional right to meaningful access to the courts. Rather, White contends that he was without funds to purchase a stamp for his legal mail and the prison official refused to post his letter free of charge. Consequently, he could not send his letter to his attorney for purposes of assisting his attorney in preparing and filing his criminal appeal due on April 8, 1988.
3
White averred the following in his complaint:
I went to the Post Office window on March 25, 1988, to mail out some legal mail to my lawyer about my appeal that he is filing in the State Supreme Court. The plaintiff is appealing the conviction from the Circuit Court of Kanawha County. The papers the plaintiff wanted to mail to his lawyer, might have helped his attroney [sic], because of the record in the Court's [sic] is confused. I was told that I can't mail anything out because I don't have any monies in my account, that I am 56c in the red. I told the postal clerk that its [sic] legal mail and that I needed to get it in the mail to my lawyer, before my appeal time runs out, on April 8, 1988. I also told her that its [sic] limiting my access to the Court's [sic]. She told me that I know the policy and that she can't do anything about it, that the policy come's [sic] from the Asst. Warden Frank Phares. I was told that I would have to wait intil [sic] I get money on my account. The plaintiff didn't ask for unlimited free postage. All the plaintiff asked, that he be able to sign a voucher and have it taken from his prison account, when he gets paid for working. The plaintiff asked for nothing free, only a [sic] advancement because of the low pay he gets. The plaintiff explained to the Asst. Warden that they would get the money because of the control they have over the plaintiff's account.
4
Two points are of interest to note here. First, White did not have to offer to pay for the postage some time in the future to make out a claim under Bounds. See infra, Section III. In fact, it was far less intrusive on the state for White, after being refused postage, to request credit rather than the free postage to which White may have been entitled
Second, "credit" must have been approved for the purchase of some items in the prison system since White's account was $.56 in the red. Although we do not address the issue, a policy which permitted credit for the purpose of purchasing candy bars or deodorant but not stamps for legal mail might state a claim under the equal protection clause.
5
Of course, if the district court had been interested in the facts alleged and alluded to in White's complaint, it would have required the state to file an answer. That responding paper should have revealed and explained in detail the objectionable policy, the reasonableness of which has been argued to us on appeal
6
The majority assumes that White was classified as indigent, was permitted the use of ten one-ounce stamped envelopes during the month of that determination and was reasonably denied any more despite his indigent status. However, we do not know that for certain from the briefs. I read White's brief to state that he was non-indigent, i.e. had $5.00 or more, on March 15, 1988 and, therefore, White was not provided ten free pre-paid envelopes for the month. Consequently, he had to pay for all postage of legal mail at least until April 15, 1988, when he might have been reclassified as indigent if he had less than $5.00 on his account. Despite his apparent "wealth" on March 15, 1988, he was without funds ten days later when he attempted to have his legal mail posted. He was indigent in fact, although he had been denominated non-indigent, a status which entitled him to nothing
7
Moreover, the district court's dismissal in both cases was not on frivolity grounds. One of the cases appears to have been a Rule 12(b)(6) dismissal; the other dismissal occurred only after a full trial
8
Of course, this the district court also achieved by truncating White's access to the courts in the case here
9
The district court similarly described White's allegation as conclusory, placing reliance on Ortega v. Ragen, 216 F.2d 561 (7th Cir.1954), cert. denied, 349 U.S. 940, 75 S.Ct. 786, 99 L.Ed. 1268 (1955). Reading that case proved quite illuminating. Ortega is a case which addressed the question, and answered it negatively, of whether there is a federal right to meaningful access to the courts. It held "no" 9 years before the Supreme Court recognized the right to counsel in Gideon v. Wainwright; 23 years before the Supreme Court acknowledged the due process right in Bounds; and 18 years before the Supreme Court unanimously professed the rule of Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 that pro se complaints must be construed liberally. Amazingly, Ortega also held that an equal protection claim could not be brought under Sec. 1983, an absolutely absurd concept today and one not supported by the cases cited by the Ortega court. See Collins v. Hardyman, 341 U.S. 651, 660-61, 71 S.Ct. 937, 941-42, 95 L.Ed. 1253 (1951) (plaintiffs could not bring a Sec. 1983 action alleging a conspiracy to deprive plaintiffs of their equal protection rights because plaintiffs failed to show state action). I can see no relevance whatsoever in Ortega to the case before us. Ortega 's only significance is as a milestone by which we can measure just how far the constitution has brought us today. To suggest, let alone cite, Ortega as controlling authority today indicates to me that the post-1954, not an insignificant year itself (it was in that year that Brown v. Board of Education, 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 873 (1954), was decided), volumes of the United States Reports should be given perhaps more attention
10
Redundantly, I must again point out that the majority fails to construe liberally the phrase "might have helped his attonrey [sic]." Written by someone not trained in the law and without a license, it is a bit much to expect White to know to what degree and in what way his lawyer would find the information helpful. It is, after all, the lawyer's job to evaluate all relevant material
Moreover, the majority overlooks what White did allege. White's complaint stated, "I need to get [the letter] in the mail to my lawyer before my appeal time runs out, on April 8, 1988." (emphasis added). Furthermore, White did identify the purpose to be served by the letter, i.e. to clear up a confusing record. It can hardly be disputed that such information is not only relevant to White's appeal of his criminal conviction, but that a clear record, since that is all that an appellate court has to review, is essential to a fair appeal. For all we know, White's attorney on appeal was not his trial counsel and White's case would be jeopardized when appellate counsel is unable to clarify the record in response to the court's concerns.
Finally, the value of whatever White had to say to his attorney may ultimately be found in the questions it prompts his attorney to pursue and in the cumulative effect of subsequent communications. That White's complaint should live or die on his choice of the word "might" rather than "would" is simply incredible to me.
11
In 1968, a total of 1,369 prisoner civil rights cases were filed; 2.3 percent of those reached trial. The number of prisoner civil rights cases filed in 1987 dramatically increased to 22,127, a 1600 percent increase over twenty years. Still, only 3.9 percent reached the trial stage. Hernandez, 861 F.2d at 1431
12
See cf. Murray v. Giarratano, --- U.S. ----, 109 S.Ct. 2765, 2771, 106 L.Ed.2d 1 (1989) (no right to counsel during postconviction proceedings in death penalty cases because direct appeal, rather than collateral attack, is the primary avenue for review of a conviction or sentence)
13
Although the majority agrees that the complaint must be construed liberally, I believe that it fails to do so. I take particular issue with the statement that "[p]laintiff did not allege, however, any detriment to his state appeal as the result of his inability to mail the letter in question." Majority op. at 723. In Neitzke, the plaintiff had failed to state that the doctors who denied him medical attention had done so "with deliberate indifference" to his needs. That omission did not prove fatal to his complaint, however, since it could not be said that it was inarguable on the facts alleged and the complaint could be amended
Similarly, in the case here, it cannot be said that any perceived deficiency in stating a claim related to White's actual injury could not be corrected by amendment to the complaint. It certainly is arguable in fact that the appeal of his criminal conviction in Kanawha County which did not have the benefit of his information concerning the record was prejudiced by that omission. If, on the other hand, White had alleged that he was appealing a criminal conviction returned on the planet Saturn, it certainly would be beyond dispute that his complaint was "delusional" and "baseless" and warranting dismissal sua sponte as frivolous. But he made no such contention, so we should not be saturnine. | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/721495/ | 89 F.3d 169
71 Fair Empl.Prac.Cas. (BNA) 520
Janice E. HETZEL, Plaintiff-Appellee,v.COUNTY OF PRINCE WILLIAM; Charlie T. Deane, Defendants-Appellants,andG.W. Jones; C.E. O'Shields, Defendants.Janice E. HETZEL, Plaintiff-Appellant,v.COUNTY OF PRINCE WILLIAM; Charlie T. Deane, Defendants-Appellees,andG.W. Jones; C.E. O'Shields, Defendants. (Two Cases).
Nos. 95-1935, 95-2004, 95-2010.
United States Court of Appeals,Fourth Circuit.
Argued June 5, 1996.Decided July 11, 1996.
ARGUED: Sharon Elizabeth Pandak, County Attorney, Prince William, Virginia, for Appellants. John Michael Bredehoft, Charlson & Bredehoft, P.C., Reston, Virginia, for Appellee. ON BRIEF: Angela M. Lemmon, Assistant County Attorney, Megan E. Kelly, Assistant County Attorney, Prince William, Virginia; Bernard J. DiMuro, DiMuro, Ginsberg & Lieberman, P.C., Alexandria, Virginia, for Appellants. Elaine C. Bredehoft, Charlson & Bredehoft, P.C., Reston, Virginia, for Appellee.
Before ERVIN, HAMILTON and LUTTIG, Circuit Judges.
Reversed and remanded by published opinion. Judge LUTTIG wrote the opinion, in which Judge ERVIN and Judge HAMILTON joined.
OPINION
LUTTIG, Circuit Judge:
1
Appellee, Janice E. Hetzel, an hispanic female who currently is a police officer in good standing in Prince William County, Virginia, brought the instant action against appellants, Prince William County and Police Chief Charlie T. Deane, as well as against other police officers not parties to this appeal, under Title VII and section 1983 alleging harassment and discrimination on the basis of sex and national origin. Hetzel also claimed that because of her attempts to enforce her right to be free of discrimination, the defendants took various retaliatory actions, including failing to promote her to the rank of sergeant, in violation of the First Amendment, the Equal Protection Clause and Title VII. She requested some $9.3 million in damages plus backpay, retroactive promotion to sergeant, and other injunctive relief.
2
After an 8-day trial, the jury rejected all of Hetzel's counts (seven in all) alleging sex and national origin discrimination and that she was denied a promotion because of such discrimination, finding that the defendants had not engaged in any invidious discrimination in violation of Title VII. The jury concluded, however, that Chief Deane retaliated against Hetzel "because of [her] engaging in protected speech," and awarded $750,000 in damages for Hetzel's emotional distress. Following the verdict, the district court granted appellants' motion as a matter of law on one of Hetzel's three retaliation claims, and thus reduced the damage award to $500,000. The court also awarded appellee in excess of $180,000 in attorney's fees and costs, but, because the court was concerned that "there is a likelihood that [Hetzel] would interpret any act of discipline as retaliation," it refused to grant Hetzel any injunctive relief against future retaliation. J.A. at 291. For similar reasons, the district court denied Hetzel's request for retroactive promotion to sergeant, noting that "[a]lthough the jury may have found that the failure to promote was retaliatory, the verdict is too ambiguous to support the equitable relief requested by plaintiff. Having observed the plaintiff's demeanor at trial, the Court is concerned that plaintiff does not now possess the temperament necessary to be an effective sergeant." Id. at 290; see also id. at 291 & n. 5.
3
Both parties appealed raising numerous issues. We leave intact the jury's finding of liability on appellee's retaliation claims. Because we conclude that both the damage award and the award of attorney's fees are excessive as a matter of law, however, we reverse the judgment of the district court and remand the case for further proceedings.I.
4
Appellants first contend that the award of $500,000 for emotional distress, based almost entirely on Hetzel's own self-serving testimony concerning stress and headaches, is unsupported by the evidence and excessive as a matter of law. Hetzel, acknowledging that the evidence of damages comes largely from her own testimony, responds that the award is supported by the uncontroverted evidence, is similar to other awards for mental distress in comparable cases, and is easily justified by the numerous adverse actions taken by appellants. Although Hetzel claims that denial of transfers, disparate disciplinary treatment, poor performance evaluations, abusive treatment, a 1995 Internal Affairs ("I.A.") investigation, and the failure to promote are all adverse employment actions supporting the damage award, only the alleged failure to promote and the 1995 I.A. investigation can even possibly constitute adverse retaliatory action, as the other acts either were taken outside the statute of limitations or did not deprive Hetzel of a valuable government benefit, see, e.g., Huang v. Board of Governors, 902 F.2d 1134, 1140 (4th Cir.1990).
5
A jury's award of compensatory damages will be set aside on the grounds of excessiveness only if " ' "the verdict is against the clear weight of the evidence, or is based upon evidence which is false, or will result in a miscarriage of justice," ' " Johnson v. Hugo's Skateway, 974 F.2d 1408, 1414 (4th Cir.1992) (en banc ) (quoting Johnson v. Parrish, 827 F.2d 988, 991 (4th Cir.1987) (quoting Aetna Cas. & Sur. Co. v. Yeatts, 122 F.2d 350, 352 (4th Cir.1941))), or "no substantial evidence is presented to support it," Barber v. Whirlpool Corp., 34 F.3d 1268, 1279 (4th Cir.1994). The district court, with little analysis, rejected appellants' claim that the $500,000 damage award for emotional distress was excessive, concluding that the award was fully supported by the evidence because "most importantly" Hetzel "was crying and shaking throughout most of the trial." J.A. at 284. Quite obviously, a litigant's demeanor while at counsel's table is not evidence to support a damage award.
6
The evidence presented at trial concerning Hetzel's emotional distress consisted almost exclusively of Hetzel's own, brief conclusory statements--comprising less than ten pages of a joint appendix exceeding 5,000 pages--that she had headaches, stress, trouble reading to her daughter, and problems with her family life as a result of appellants' actions. Hetzel presented no evidence corroborating the existence of any of her supposed specific harms. She remains an officer in good standing with the police department. She continues to perform her duties with no noticeable diminution in performance, as her most recent performance evaluation, which was nothing short of stellar, confirms. She has no observable injuries or physical ailments. Indeed, although Hetzel insists that she was devastated and humiliated by appellants' actions, she has never once seen a doctor, therapist, or other professional, or even sought the counsel of a friend, to help her deal with what is supposedly an enormous problem overshadowing all aspects of her life.
7
Hetzel's thin evidence of rather limited damages would in-and-of itself entitle her to only a minimal damage award for intangible injuries. See, e.g., Rodgers v. Fisher Body Div., 739 F.2d 1102, 1108 (6th Cir.1984) (holding that plaintiff's own brief testimony that he was forced to go on welfare and had his car repossessed causing humiliation and distress was insufficient to support a sizeable award for emotional distress), cert. denied, 470 U.S. 1054, 105 S.Ct. 1759, 84 L.Ed.2d 821 (1985); cf. Carey v. Piphus, 435 U.S. 247, 264, 98 S.Ct. 1042, 1052, 55 L.Ed.2d 252 (1978) ("[A]lthough mental and emotional distress ... is compensable under § 1983, we hold that neither the likelihood of such injury nor the difficulty of proving it is so great as to justify awarding compensatory damages without proof that such injury actually was caused."). However, only a part of Hetzel's harms are properly attributed to appellants' retaliatory actions. Much, if not all, of Hetzel's claimed distress was actually caused by her erroneous belief that she was the victim of invidious discrimination, and of course, given the jury's findings for the defendants on all of Hetzel's claims of discrimination, Hetzel is entitled to no damages for any injuries which were caused by her belief that she was the victim of invidious discrimination. Sergeant Collier, the one witness Hetzel points to as corroborating her contention that the appellants' retaliatory actions caused her intangible injuries, testified that Hetzel had told him that she was under continuous emotional stress and feeling a "sense of frustration" because of her "dealing with this issue of discrimination." J.A. at 1352 (testimony of Sgt. Collier) (emphasis added). Moreover, as the district court recognized, but failed to take into account in its brief examination of the magnitude of the damages, some of Hetzel's stress and emotional difficulties must be attributed to her tendency to overreact to situations. See id. at 291 n. 5.1
8
The only other evidence of emotional distress that even arguably supports an award of damages is Hetzel's reaction following a fifteen-to-twenty minute Internal Affairs interview, conducted on January 15, 1995, concerning whether Hetzel had improperly advised a suspect of his Miranda rights--an investigation which led to an oral reprimand for Hetzel's improper actions. While we have significant doubts as to whether this interview constitutes an adverse employment action which is actionable under Title VII or section 1983, we do not here need to conclusively decide that issue because any temporary reaction Hetzel may have had to this interview does not entitle her to any substantial or significant damage award. Although other officers testified that Hetzel was briefly distraught following the interview, Hetzel, after composing herself, finished out the remainder of her shift. Plainly a $500,000 award for a reaction following a brief interview during the course of a successful investigation is a gross miscarriage of justice.
9
Simply put, the jury was presented with insufficient evidence "to place a high dollar value on plaintiff's emotional harm." Rodgers, 739 F.2d at 1108. That this award is outrageous is confirmed by even a cursory analysis of the impressive array of cases cited by the appellee in support of the jury verdict. These cases, all of which contained a substantial award of $25,000 or more for intangible injuries such as emotional distress, involved plaintiffs that either were the victims of invidious discrimination, suffered serious--often permanent--physical injuries, or were discharged and had difficulty finding alternative employment. See Appellee's Br. at 32-34 & n. 29. For example, in Meyers v. City of Cincinnati, 14 F.3d 1115, 1119 (6th Cir.1994), the Sixth Circuit rejected the contention that an award of $25,000 for mental anguish, humiliation and loss of reputation to an assistant fire chief unconstitutionally forced to retire was excessive and not supported by the evidence because the fire chief, who had been discharged, had lost ten pounds, suffered from insomnia, and was under a doctor's care for stomach problems. In another case bearing some similarity to the instant case, Wulf v. City of Wichita, 883 F.2d 842, 874-75 (10th Cir.1989), the court held that a $250,000 award for emotional distress to a police officer following unlawful termination, which was supported only by the testimony of the plaintiff that he was stressed, angry, depressed and frustrated, and similar testimony from his wife, was grossly excessive and remanded the case for recalculation of damages not to exceed $50,000. In stark contrast to these cases, and the others relied upon by the appellee--most of which did not involve an award of damages for emotional distress even approaching the magnitude of the award in this case--Hetzel suffered no discrimination, was not physically injured, is not under the care of a physician, and remains an officer in good standing on the Prince William County police force. See also Spence v. Board of Educ., 806 F.2d 1198, 1200-01 (3d Cir.1986) (affirming district court's remittitur of jury award of $22,060 for emotional distress where plaintiff testified that she was "depressed and humiliated" by a retaliatory transfer).
10
As this court has often remarked, "an award of substantial compensatory damages ... must be proportional to the actual injury incurred.... The award must focus on the real injury sustained...." Piver v. Pender County Bd. of Educ., 835 F.2d 1076, 1082 (4th Cir.1987), cert. denied, 487 U.S. 1206, 108 S.Ct. 2847, 101 L.Ed.2d 885 (1988). Here, the award of $500,000 was grossly excessive when compared to the limited evidence of harm presented at trial and would result in a serious "miscarriage of justice" if upheld. Accordingly, we set aside the damage award and remand the case to the district court for recalculation of the award of damages for emotional distress.2 Upon remand, the district should closely examine the awards in Bradley v. Carydale Enter., 730 F.Supp. 709, 726-27 (E.D.Va.1989), and McClam v. City of Norfolk Police Dep't, 877 F.Supp. 277, 284 (E.D.Va.1995), which we believe are comparable to what would be an appropriate award in this case.
II.
11
Appellants also contend that the district court erred in granting appellee's entire $176,293 request for attorney's fees. The district court, after concluding that the unsuccessful discrimination and harassment claims against all defendants--two of which are not even a party to this appeal because they fully prevailed--"shared a common core of operative facts" with the successful retaliation claims against the city and Chief Deane, and that Hetzel had achieved significant relief in the form of a "substantial damage[ ]" award, granted appellee's full petition for attorney's fees. J.A. at 288-89. We will reverse a district court's determination of attorney's fees only "if under all the facts and circumstances [the award] is clearly wrong." Hugo's Skateway, 974 F.2d at 1418 (internal quotation marks omitted).
12
Especially in light of our determination that the evidence does not support a substantial damage award, we believe the award of $176,293 in attorney's fees was "clearly wrong." Given the limited results she obtained in this case, Hetzel is not entitled to an award of significant, much less full, attorney's fees. As the Supreme Court has instructed, " '[w]here recovery of private damages is the purpose of ... civil rights litigation, a district court, in fixing fees, is obligated to give primary consideration to the amount of damages awarded as compared to the amount sought.' " Farrar v. Hobby, 506 U.S. 103, 114, 113 S.Ct. 566, 575, 121 L.Ed.2d 494 (1992) (quoting Riverside v. Rivera, 477 U.S. 561, 585, 106 S.Ct. 2686, 2700, 91 L.Ed.2d 466 (1986) (Powell, J., concurring in the judgment)). Whereas Hetzel's complaint requested $9.3 million in damages, back pay, retroactive promotion to sergeant, and other injunctive relief, she will ultimately receive only a pittance of her original damages request and no injunction relief, promotion nor back pay. Moreover, the Supreme Court has also explained that,
13
[w]here a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee.... We emphasize that the inquiry does not end with a finding that the plaintiff obtained significant relief. A reduced fee award is appropriate if the relief, however significant, is limited in comparison to the scope of the litigation as a whole .
14
Hensley v. Eckerhart, 461 U.S. 424, 435, 439-40, 103 S.Ct. 1933, 1940, 1942-43, 76 L.Ed.2d 40 (1983) (emphasis added); see also Farrar, 506 U.S. at 114, 113 S.Ct. at 574 ("Indeed, 'the most critical factor' in determining the reasonableness of a fee award 'is the degree of success obtained.' " (quoting Hensley, 461 U.S. at 436, 103 S.Ct. at 1941)). Here, Hetzel failed on her core claims--the seven counts alleging invidious sex and national origin discrimination. Because Hetzel has gained but an insignificant portion of the relief she originally requested and because she has failed to prevail on her most consequential claims, she is entitled only to a fraction of her attorney's fees.
15
In sum, we vacate the fee award and remand to the district court for reconsideration of appellee's fee petition.
III.
16
Finally, we consider appellee's cross-appeal. Hetzel claims that because she prevailed on her retaliation claim she is "presumptively" entitled to equitable relief in the form of front and backpay, or retroactive promotion to sergeant, and that the district court abused its discretion in refusing to award any such relief. We disagree. With respect to backpay, the evidence clearly showed that Hetzel earned more as a police officer than she would have earned as a sergeant because officers, but not sergeants, are paid overtime. With respect to a promotion or front pay, the district court determined:
17
Although the jury may have found that the failure to promote was retaliatory, the verdict is too ambiguous to support the equitable relief requested by plaintiff. Having observed the plaintiff's demeanor at trial, the Court is concerned that plaintiff does not now possess the temperament necessary to be an effective sergeant.
18
J.A. at 290. We can find nothing in the voluminous record in this case that even suggests that the district court abused its discretion, and we will not order that someone be promoted to a higher level within a paramilitary organization where they lack the requisite qualities to perform the duties of the job effectively.3
19
For the reasons stated herein, we reverse the judgment of the district court and remand the case for recalculation of damages for emotional distress and recalculation of attorney's fees.
20
REVERSED AND REMANDED.
1
As the district court noted:
[A discussion] conducted by Sergeant Metheny on February 24, 1995 provides a clear example of the risk of plaintiff's overreaction. The [discussion] was designed to explore plaintiff's understanding of the Miranda warning and to eliminate any confusion plaintiff may have had about the requirements for a proper waiver.... Despite Sergeant Metheny's assurance that she would not be disciplined for [a] 1993 case, and before he could question her about it, plaintiff responded that "[i]f you're going to get into this, I refuse to answer any questions right now and I'm going to walk out of here because this is complete harassment." Even First Sergeant Collier, plaintiff's supervisor and strongest supporting witness, felt that plaintiff overreacted to the [discussion].
Id. (internal citations omitted).
2
Because we conclude that the $500,000 award is outrageous, we do not need to address Hetzel's contention that the district court improperly reduced the award by $250,000 in granting a judgment as a matter of law for the defendants on one of her retaliation claims
3
Both parties raise numerous other issues. We have carefully considered each issue and have concluded that the remaining claims either have not been properly preserved for appeal or are without merit | 01-03-2023 | 04-17-2012 |
https://www.courtlistener.com/api/rest/v3/opinions/1646771/ | 9 So.3d 630 (2009)
WILSON
v.
STATE.
No. 3D09-289.
District Court of Appeal of Florida, Third District.
May 7, 2009.
Decision without published opinion. Appeal dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1734807/ | 338 S.W.2d 802 (1960)
STATE of Missouri, Respondent,
v.
Otis LeRoy SLADE, Arthur Russell Slade and Kenneth Lee Waller, Appellants.
No. 47728.
Supreme Court of Missouri, Division No. 2.
September 12, 1960.
Rehearing Denied October 10, 1960.
*804 Earl E. Roberts, Steelville, for appellants.
John M. Dalton, Atty. Gen., James B. Slusher, Asst. Atty. Gen., for respondent.
STORCKMAN, Judge.
The defendants were found guilty of stealing a motor vehicle as jointly charged in an information filed in the Circuit Court of Phelps County and the punishment of each was assessed at imprisonment in the penitentiary for a term of three years. Their joint motion for a new trial was overruled and they were sentenced in accordance with the verdict of the jury. Among other assignments of error is the contention that the evidence was insufficient to make a submissible case and that a judgment of acquittal should have been directed.
All of the defendants were soldiers in the United States Army stationed at Fort Leonard Wood near Rolla, Missouri. The defendants Otis LeRoy Slade and Arthur Russell Slade are brothers. They together with Kenneth Lee Waller are the defendants in the case. Daniel Mackachinis, also a soldier at Fort Leonard Wood, was involved in the occurrence out of which the prosecution arose but was not a defendant in the case. On the afternoon of March 28, 1959, the three defendants and Mackachinis were together in Rolla. At about 3:00 p. m., while riding around town in a 1954 Ford convertible owned by Otis Slade, they went to a used-car lot operated by Thurlo Burks in Rolla where they looked at a 1954 Ford sedan which was test-driven by one of the boys accompanied by a salesman. They left and during the afternoon and evening spent considerable time at a skating rink. About 9:00 p. m., Arthur Slade, driving Otis' car, took Mackachinis to within about a half-block of the used-car lot and let him out. Mackachinis went onto the lot and got the keys out of the 1954 Ford sedan at which they had looked that afternoon. Sometime after 10:00 p. m., when the used-car lot had been closed for the night, Arthur Slade again drove Mackachinis to within a short distance of the used-car lot. Mackachinis again went onto the lot and, using the key he had taken earlier, drove the Ford sedan from the lot, past the place where Arthur Slade was waiting, to a wooded area on a country road about two miles north of Rolla where he concealed it. Arthur Slade, in Otis' car, accompanied Mackachinis to the hiding place and drove him back to Rolla. The defendants and Mackachinis were together for at least portions of the remainder of the evening at the skating rink and at a night club where they stayed until about 1:00 a. m. The defendants and Mackachinis then went in Otis Slade's car to the wooded area where the stolen automobile had been secreted. Mackachinis siphoned the gasoline out of the tank and put it into the Slade car. The Slade brothers took five tires and wheels from the stolen car and Waller removed the radio. Windshield wipers and rear view mirrors were also taken.
Four of the tires and wheels taken from the stolen car were later put on Otis Slade's car in place of his tires which were discarded. The other wheel and tire was secreted in Waller's automobile which was disabled and standing in the back yard of his girlfriend's home. At about 3:00 p. m. the next day the defendants and Mackachinis were arrested. Mackachinis confessed, implicated the others, and testified on behalf of the state. All three of the defendants took the stand and testified in their own behalf.
The principal dispute in the evidence concerns the extent of defendants' knowledge *805 of the theft and their participation in it. Mackachinis testified that, after obtaining the keys from the Ford sedan, he and Arthur Slade went back to the skating rink where Otis Slade and Waller were told that Mackachinis had obtained the key to the Ford sedan and were shown the key. Waller said that he would have to get tools out of his car so that he could get the radio out of the Ford sedan. Mackachinis testified that he, driving the stolen car, followed Arthur Slade out into the country to hide the car, while Arthur claimed Mackachinis led the way. Arthur and Mackachinis drove back to the skating rink in Otis' car where they picked up Otis and later in the evening picked up Waller at his girlfriend's house. Mackachinis further testified that they needed gasoline for use in Otis Slade's car, that they intended to sell one or two of the tires to get money to buy gasoline and were going to put some of the tires on the Slade car. He testified that all three of the defendants knew what was going to be done with the 1954 Ford sedan.
All of the defendants admitted that they took part in stripping the stolen car of its equipment, but Otis Slade and Waller denied that they had previous knowledge that the car had been stolen. Arthur Slade admitted he knew the car was stolen when he saw Mackachinis driving it just after taking it from the lot at about 10:00 p. m. He saw it did not have any license plates and was the same car they had looked at earlier in the day. Otis Slade drove his codefendants and Mackachinis in his automobile to the place where the stolen car was secreted.
The defendants first contend that the court erred in overruling the motion for judgment of acquittal at the conclusion of the state's case and at the conclusion of the entire case. Any error in overruling the motion for judgment of acquittal made at the close of the state's case was waived by the introduction of evidence by the defendants in their own behalf. State v. Archer, Mo., 328 S.W.2d 661, 665 [5]; State v. Richardson, Mo., 315 S.W.2d 139, 140[3]; State v. Bledsoe, Mo., 254 S.W.2d 618, 622[6]. Therefore, the sufficiency of the evidence must be determined on the basis of its standing at the conclusion of the entire case.
Where there is substantial evidence in proof of a defendant's guilt, the judging of the credibility of the witnesses and the weight and value to be given their testimony is the jury's province. State v. Ruckman, Mo., 222 S.W.2d 74, 75[1]. In determining the sufficiency of the evidence to sustain a conviction, the appellate court considers as true the evidence favorable to the state and the favorable inferences reasonably to be drawn therefrom; and evidence to the contrary is rejected. State v. Reagan, Mo., 328 S.W.2d 26, 29[5]; State v. Woolsey, Mo., 328 S.W.2d 24, 25[4].
The automobile of Thurlo Burks was stolen within the meaning of the applicable criminal statutes, §§ 560.156 and 560.161, subd. 2(2) RSMo Cum.Supp.1957, Laws 1955, p. 507, V.A.M.S. Section 560.156, subd. 1(2) defines the word "steal" as used in the statute as "to appropriate by exercising dominion over property in a manner inconsistent with the rights of the owner, either by taking, obtaining, using, transferring, concealing or retaining possession of his property."
The defendants' principal contention is that there is no evidence that any of them had any part in the actual taking and driving away of the stolen automobile and that no conspiracy was shown within the provisions of § 556.120 RSMo 1949, V.A.M.S. The defendants were charged with stealing an automobile and not with conspiracy which is a separate and independent offense. See 11 Am.Jur., Conspiracy, § 9, p. 549. A person who aids and abets the commission of a criminal offense is guilty as a principal without a showing of conspiracy. Section 556.170 RSMo 1949, *806 V.A.M.S.; State v. Reich, 293 Mo. 415, 239 S.W. 835, 837[5]; State v. Porter, Mo., 199 S.W. 158, 160[2].
Nor is it necessary to prove that the defendants personally participated in the actual taking and driving away of the stolen car. All persons who act together with a common intent and purpose in the commission of a crime are equally guilty even though they are not personally present at the commission of the offense. State v. Butler, Mo., 310 S.W.2d 952, 957[7]; State v. Lackmann, Mo., 12 S.W.2d 424, 425[4, 5]; State v. Hayes, Mo., 262 S.W. 1034, 1937[8, 9].
While Mackachinis is the one who performed the physical act of removing the car from the owner's premises and driving it to the hiding place, the evidence, both testimonial and circumstantial, is sufficient to show the guilty participation of the defendants in the common plan and purpose. The court did not err in refusing to direct a verdict of acquittal. State v. Wilson, Mo., 286 S.W.2d 756, 758[5]; State v. O'Brien, Mo., 252 S.W.2d 357, 360[7], certiorari denied 345 U.S. 929, 73 S. Ct. 790, 97 L. Ed. 1359.
The foregoing discussion of the law and the evidence in support of the verdict also disposes of the defendants' contention that there was no evidence to justify the giving of the state's instruction S-4-G, which reads as follows: "The Court further instructs you that, when two or more persons knowingly act together in the commission of an unlawful act or purpose, then whatever either does in furtherance of such unlawful act or purpose is in law the act and deed of each of such persons." Since we have held the evidence to be sufficient to show that the defendants were knowingly acting together with Mackachinis in the theft of the automobile, the trial court did not err in giving the instruction.
The defendants next contend that the court erred in permitting evidence of offenses other than the one with which the appellants were charged. On crossexamination the defendants interrogated Mackachinis as to whether he had testified at a preliminary hearing that the defendants had nothing to do with the theft of an automobile, but the matter was left in a confused situation. Before closing its case, the state recalled Mackachinis who testified the preliminary hearing about which he was interrogated related to the theft of another automobile, a 1953 Ford. There was no charge that the defendants had anything to do with that theft. The only objection made was that the testimony was not proper rebuttal. We could as easily pass on the merits of the point and would prefer to do so, but we are precluded because the error claimed was not called to the attention of the trial court in the defendants' motion for new trial. State v. Kelly, Mo., 258 S.W.2d 611, 612[3, 4]; State v. Wilson, 361 Mo. 78, 233 S.W.2d 686, 689[12].
By a liberal construction, the defendants' next contention is that the trial court erred "in admitting irrelevant and incompetent evidence pertaining to the wife of the appellant, Otis Slade." It was brought out without objection that Otis had rented an apartment at Newburg where he stayed at least part of the time and that he had married a fifteen-year-old girl. The defendants put their character in issue and on cross-examination one of defendants' character witnesses was asked whether he knew "there was a want out for" Otis Slade for taking "that girl up in the east coast somewhere". An objection that this was "highly prejudicial" and imminently unfair" was overruled and the witness denied that he had heard such talk. Later the defendants put on the Circuit Clerk and Recorder of Phelps County to identify the records to prove that Otis Slade had married a girl fifteen years of age. There was testimony from this witness without objection that charges against the Slade brothers growing out of an escapade with this girl were dismissed when Otis married her. The defendants' *807 counsel brought out this latter testimony and therefore is in no position to complain of it. Nor was the court in error in permitting the cross-examination of the character witness.
The general rule is that a defendant's good character or lack of it can be proven only by evidence of general reputation and not by proof of specific acts of conduct either good or bad. Nevertheless, on cross-examination of character witnesses, inquiry as to whether they have heard rumors of specific acts of misconduct which reflect upon the defendant's character is permissible to test their knowledge, the trustworthiness and accuracy of their information, the basis for their judgment, their candor and their credibility. State v. Carson, Mo.App., 239 S.W.2d 532, 536 [5]; State v. Childers, Mo., 268 S.W.2d 858, 860[4]. The assignment of error is denied.
The defendants' final assignment is that the court erred in failing to instruct the jury on all questions of law arising in the case in that it failed "to instruct the jury on the defense of appellants that at the time of the taking of the automobile involved herein, no further transfer was contemplated and the use thereof was discontinued." In this connection the defendants rely upon subsection 3 of § 560.156 which, together with subsection 2, provides as follows: "2. It shall be unlawful for any person to intentionally steal the property of another, either without his consent or by means of deceit. 3. If the property stolen within the meaning of subsection 2 is a chattel and the person charged with stealing the same proves by a preponderance of the evidence that no further transfer was made, and that, at the time of the appropriation he intended merely to use the chattel and promptly to return or discontinue his use of it, he has a defense to a prosecution under subsection 2." The defendants assert that the testimony of Mackachinis shows that "he did not intend to keep the motor vehicle, but merely intended to use the vehicle and discontinue its use and take certain accessories from the vehicle", and that the record further shows that the use of the car was "discontinued at a point". On this premise they say they have a defense to the prosecution which the court should have instructed on although they made no such request at the trial. Whether the provisions of subsection 3 are a part of the "law of the case" under the circumstances is not presented and we do not decide that question.
The evidence does not tend to prove that the defendants and Mackachinis had any intention of returning to the owner the automobile or the parts which they took from it. On the contrary, the proof is that they used the tires and gasoline and would have sold and transferred the remaining parts and equipment if they had not been apprehended when they were. While they did not undertake to dispose of the automobile as an entirety, the reason obviously was not consideration for the rights of the owner. They could not transfer it as a whole without a certificate of title and an attempt to do so would make detection certain. What the defendants and their associate did tended to destroy the identity and function of the chattel as a motor vehicle. This is what they intended to do when they appropriated the automobile. For an extreme example, see State v. Wilson, supra, 286 S.W.2d 756, where the automobile appropriated was "cut up" and sold for junk, and the conviction of theft of an automobile was affirmed.
The new statute was not intended to render less stringent the law proscribing the theft of motor vehicles. The legislative intent of subsection 3 of § 560.156 is made clearer by reference to the Committee's Explanatory Note in the Final Report of the Senate Criminal Law Revision Committee, Vol. III, Proposal No. 49, p. 3, which is as follows:
"Stealing, as a substitute for larceny, embezzlement, false pretenses, and confidence game is intended to prohibit *808 only conduct which has or may bring about a great risk of loss. E.G. a person may appropriate a neighbor's wheelbarrow to move a small pile of dirt, and intend to return it promptly, and there is little risk of loss to the owner. If the defendant can establish that such was his intention, and that he made no further transfer of the chattel, he is not guilty of stealing. Since it is necessary for the prosecution to establish that the act was intentional or that the deceit was intentional, requiring the defendant to establish his lack of intent to permanently deprive the owner of his goods will not deprive him of the presumption of innocence. If the defendant, however, appropriates his neighbor's money, stocks, or bonds, just intending to use them he creates a great risk of loss to the owner because money generally is used by spending it and stocks and bonds by converting them into cash. Under the present law of Missouri, embezzlement is not made any less a crime even though the embezzler intends at the time to restore the money out of his winnings on the races, etc., or even if he actually restores the money.
"One who temporarily `borrows' an automobile without consent of the owner, would not be guilty of stealing, but that would not prevent his conviction for illegally driving the car under § 560.175. A special section is desirable for this act because of the prevalence of the unauthorized use of motor vehicles, and because frequently such drivers are reckless, and create a danger to life as well as property.
"`Promptly' is difficult to define, but should depend on the circumstances of each case, with such factors as the value of the chattel and common usage being considered."
The conduct of the defendants in appropriating the automobile brought about "a great risk of loss" and it was so intended by them at the time of the taking. The evidence does not tend to prove a defense within the purview of subsection 3 of § 560.156 and the court did not err in failing to instruct on that theory.
We have considered all of the assignments of error and find them to be without merit. Accordingly the judgment is affirmed.
All concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3036659/ | United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 04-2385
___________
iNet Directories, LLC, *
*
Appellee, * Appeal from the United States
* District Court for the Western
v. * District of Missouri.
*
Developershed, Inc.; Shari Caputo; * [PUBLISHED]
Jonathan Caputo, *
*
Appellants. *
___________
Submitted: January 12, 2005
Filed: January 18, 2005
___________
Before WOLLMAN, McMILLIAN, and FAGG, Circuit Judges.
___________
PER CURIAM.
iNet Directories, LLC brought a breach of contract action in Missouri state
court against Deverlopershed, Inc., and Shari and Jonathan Caputo (collectively
Developershed). The contract contained a forum selection clause stating, “The Parties
hereby irrevocably waive any and all objections which any Party may now or
hereafter have to the exercise of personal and subject matter jurisdiction by the
federal or state courts in the State of Missouri and to the laying of venue of any such
suit, action or proceeding brought in any such federal or state court in the State of
Missouri.” After Developershed removed the case to federal court based on the
diversity of the parties, iNet sought a remand to state court based on the contract’s
clause stating the parties waived any objections to the laying of venue. The district
court* enforced the contract provision and remanded the case.
Developershed appeals. Relying on Weltman v. Silna, 879 F.2d 425, 427 (8th
Cir. 1989), Developershed argues the contract did not clearly and unequivocably
waive its right to removal. In Weltman, the contract did not address removal,
however. Id. Here, the contract states the parties waive any objections to the laying
of venue in any court in Missouri. We agree with the district court that after iNet
filed this action in Missouri state court, the contract’s forum selection clause
unambiguously prohibited Developershed from objecting to venue by removing the
case to federal court. Waters v. Browning-Ferris Indus., Inc., 252 F.3d 796, 797-98
(5th Cir. 2001) (holding nearly identical language “waving any objection . . . to laying
of venue” waives right to removal).
We thus affirm the district court’s order remanding this case to state court.
______________________________
*
The Honorable Dean Whipple, Chief Judge, United States District Court for
the Western District of Missouri.
-2- | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1558002/ | 493 F. Supp. 1029 (1980)
Kenneth A. LIRTZMAN, Individually and on behalf of a class of persons similarly, situated, Plaintiffs,
v.
SPIEGEL, INC., a corporation, Defendant.
No. 80 C 993.
United States District Court, N. D. Illinois, E. D.
July 24, 1980.
*1030 Bruce M. Friedman, Burtin I. Weinstein, Chicago, Ill., for plaintiffs.
John Bleveans, Scott J. Davis, and Roger W. Barrett, Mayer, Brown & Platt, Chicago, Ill., for defendant.
*1031 ORDER
BUA, District Judge.
The present matter has been brought as a class action. Rule 23(b), Fed.R.Civ.P. The plaintiff herein, Kenneth A. Lirtzman, in addition to requesting injunctive and declaratory relief, seeks on behalf of himself and others similarly situated to recover money damages for the defendant Spiegel, Inc.'s alleged violations of the Truth in Lending Act, 15 U.S.C. § 1601, et seq. (herein "the Act"), and of Regulation Z, 12 C.F.R. § 226, which was adopted pursuant to the Act by the Federal Reserve Board. Jurisdiction with respect to the action is based upon § 130(e) of the Act, 15 U.S.C. § 1640(e).
This matter arose after plaintiff received a catalog entitled "Discover Spiegel", which was part of a mass mailing by defendant throughout the United States. By virtue of his receipt of said catalog, Kenneth Lirtzman was informed that Spiegel, Inc. had unilaterally "opened" and established a "Spiegel Charge Account" entitling him to purchase, on credit, merchandise from defendant in an amount not to exceed $500.00. In accordance with the terms of this apparent open end credit plan, plaintiff ordered consumer merchandise from defendant.
Presently before the court is plaintiff's motion to strike those Affirmative Defenses designated Three through Ten by defendant in its answer. Rule 12(f), Fed.R.Civ.P. This motion is based upon plaintiff Lirtzman's contention that the pleadings in question do not present sufficient defenses and, therefore, are insufficient as a matter of law.
Motions to strike defenses are not favored, and are not ordinarily granted unless the language in the pleading at issue both has no possible relation to the controversy and is clearly prejudicial. Garza v. Chicago Health Clubs, Inc., 347 F. Supp. 955, 962 (N.D.Ill.1972). Such motions generally will be denied "if the defense is sufficient as a matter of law or if it fairly presents a question of law or fact which the court ought to hear." Application of J. W. Schonfeld, Ltd., 460 F. Supp. 332, 335 (E.D. Va.1978); Systems Corp. v. American Telephone & Telegraph, 60 F.R.D. 692, 694 (S.D. N.Y.1973); 2A Moore's Federal Practice ¶ 12.21 at 2437 (2d ed. 1975). Before a motion to strike can be granted, the court must instead "be convinced that there are no questions of fact, that any questions of law are clear and not in dispute, and that under no set of circumstances could the defense succeed." Systems Corp., supra at 694; Carter-Wallace, Inc. v. Riverton Laboratories, Inc., 47 F.R.D. 366, 368 (S.D.N.Y. 1969).[1]
In the defendant's Third Defense, the court believes a substantial factual question has been raised. Spiegel, Inc. contends in this defense that the plaintiff's primary motivation for entering into the transaction forming the subject matter of the present lawsuit was not to obtain consumer credit, but rather was to generate grounds for the initiation of a class action lawsuit, so that his [Lirtzman's] attorneys would be able to collect substantial fees. Defendant bases this contention in large part on the fact that on February 26, 1980, Kenneth Lirtzman mailed to Spiegel, Inc. the purchase order which constitutes the basis for this matter and on the following day his class action complaint was filed.
There is no dispute that plaintiff is a natural person to whom credit was offered or extended by defendant, and that defendant is a creditor who regularly extends, or arranges for, the extension of credit for which the payment of a finance charge is or may be, depending upon the circumstances, required. §§ 103(f), (h) of the Act; 15 U.S.C. §§ 1602(f), (h). That being so, there still remains a factual dispute to be resolved; that is, whether the primary purpose for the transaction at issue was to obtain consumer credit or whether said transaction was entered into primarily for *1032 business or commercial purposes. In light of the fact that the Court of Appeals for the Seventh Circuit has criticized the use of the Act as a means of obtaining attorneys' fees, Mirabal v. General Motors Acceptance Corp., 576 F.2d 729, 731 (7th Cir. 1978), cert. denied, 439 U.S. 1039, 99 S. Ct. 642, 58 L. Ed. 2d 699 (1978), it is the opinion of this court that such a factual question does bear a possible relation to the present controversy, and accordingly is an issue which should be heard. Plaintiff Lirtzman's motion to strike the Third Affirmative Defense, therefore, is denied.
The defendant's Fourth Affirmative Defense raises the question of whether plaintiff brought the present action in good faith. Spiegel, Inc. takes the position that, if this action was not brought in good faith, then Kenneth Lirtzman should be disqualified from pursuing his claim, because such conduct would be contrary to the legitimate functions of the federal courts.
Under Rule 8(e)(2) of the Federal Rules of Civil Procedure a party, in framing his pleadings, is at all times subject to the moral and professional obligations of honesty and good faith, as set forth in Rule 11 of the Federal Rules of Civil Procedure. Wright & Miller, Federal Practice and Procedure: Civil § 1285 (1969). Insofar as the defendant's Fourth Affirmative Defense appears to relate to whether the plaintiff has in fact comported with the requirements of Rule 8(e)(2), it clearly pertains to the facts of the present matter. Accordingly, as said Defense cannot be considered insufficient as a matter of law, plaintiff Lirtzman's motion to strike with respect to it is denied.
Defendant's Fifth Affirmative Defense is founded upon the same concern expressed in the Fourth Affirmative Defense; that is, whether the present action was brought in good faith. Spiegel, Inc. asserts that Kenneth Lirtzman, by filing a class action primarily for the purpose of generating substantial attorneys' fees, has distinguished his position from that of other recipients of defendant's catalogs, and therefore is not a proper class representative.
Rule 23(a)(4) of the Federal Rules of Civil Procedure provides that a class action can be maintained only if "the representative parties will fairly and adequately protect the interest of the class." Because adequacy of representation is of such critical importance in class actions, moreover, the courts are obliged to pay strict and careful attention to this Rule 23(a)(4) prerequisite. See Susman v. Lincoln American Corp., 561 F.2d 86 90 (7th Cir. 1977); Wright & Miller, Federal Practice and Procedure: Civil § 1765 (1969).
If the absent members of a class are to be conclusively bound by the result of an action prosecuted by a party alleged to represent their interests, basic notions of fairness and justice demand that the representation they receive fairly and adequately protect those interests. It has been held that adequate representation is the foundation of all representative actions. Hansberry v. Lee, 311 U.S. 32, 61 S. Ct. 115, 85 L. Ed. 22 (1940); In re General Motors Corp. Engine Interchange Litigation, 594 F.2d 1106, 1121 (7th Cir. 1979), cert. denied, 444 U.S. 870, 100 S. Ct. 146, 62 L. Ed. 2d 95 (1979). In resolving the issue of adequacy of representation, "it is necessary to eliminate so far as possible the likelihood that the litigants are involved in a collusive suit or that the named plaintiffs have interests antagonistic to those of the remainder of the class." Cullen v. United States, 372 F. Supp. 441, 448 (N.D.Ill.1974). Also "[w]hether a party would adequately protect the interests of the class [ordinarily] is a question of fact depending on the circumstances of each case." Susman v. Lincoln American Corp., supra 561 F.2d 86, 90 (7th Cir. 1977); Schy v. Susquehanna Corp., 419 F.2d 1112, 1116 (7th Cir. 1970), cert. denied, 400 U.S. 826, 91 S. Ct. 51, 27 L. Ed. 2d 55 (1970). As that is so, because Spiegel, Inc.'s Fifth Affirmative Defense raises a substantial factual question concerning the adequacy of plaintiff Lirtzman's representation of the class, the court does not believe it can at this time properly be stricken.
*1033 In moving to strike the defendant's Sixth Affirmative Defense, plaintiff argues that, because full disclosure was not made to him prior to his entering into the transaction at issue, Spiegel, Inc.'s acts constituted a violation of the Act's open end credit disclosure requirements. In its Sixth Affirmative Defense, Spiegel, Inc. contends that such is not the case because under § 226.7(a) of Regulation Z, 12 C.F.R. § 226.7(a), the credit information under discussion does not have to be sent to the consumer until the first transaction on his account is made. Spiegel, Inc.'s argument, however, overlooks not only the stated purpose of the Act, as implemented by Regulation Z, but also the time that full disclosure must be made to the consumer.
The underlying purpose of the Act is to provide protection to consumers, by affording them full and meaningful disclosure, through the requirement that creditors disclose the "true" costs of consumer credit. § 127(a) of the Act, 15 U.S.C. § 1637(a), states that the required disclosures must be made "before opening any account under an open end consumer credit plan." In this respect, defendant asserts and plaintiff agrees in his reply memorandum that there appears to be an inconsistency between § 127(a) of the Act and § 226.7(a) of Regulation Z, 12 C.F.R. § 226.7(a), which states that full disclosure must be made "before the first transaction . . ." Regarding this inconsistency, however, the Court of Appeals for the Seventh Circuit, when addressing the issue of disclosure requirement violations, has stated that "if there is a violation of the Act in an open end credit plan, it occurs at the time the account is opened, or at the very latest, some time before the first transaction takes place." Goldman v. First National Bank of Chicago, 532 F.2d 10, 20 (7th Cir. 1976), cert. denied, 429 U.S. 870, 97 S. Ct. 183, 50 L. Ed. 2d 150 (1976). Furthermore, § 226.2(kk) of Regulation Z, 12 C.F.R. § 226.2(kk), provides that "a transaction shall be consummated at the time a contractual relationship is created between a creditor and a customer . . . irrespective of the time of performance."
In view of these authorities, the court believes defendant's Sixth Affirmative Defense to be insufficient as a matter of law. The plaintiff's motion to strike said Defense, therefore, is granted.
The defendant's Seventh Affirmative Defense is founded upon § 130(b) of the Act, 15 U.S.C. § 1640(b), which states in part:
A creditor has no liability under this section for any failure to comply with any requirement imposed under this part or part E of this subchapter if within fifteen days after discovering an error, and prior to the institution of an action under this section or the receipt of written notice of the error, the creditor notifies the person concerned of the error . . .
In its Seventh Defense, defendant asserts that the filing of this lawsuit does not bar the curing of an error by sending to the consumer corrective information pursuant to § 130(b). Accordingly, Spiegel, Inc. argues, as the required disclosure information has been sent to Kenneth Lirtzman, and to all other persons who ordered the catalog within fifteen days of the receipt of their orders, no viable claim has been stated in the present matter.
In so arguing, however, the defendant has misconstrued § 130(b). From the language contained therein, it is clear that § 130(b) manifests an intent that the right to cure errors terminates upon the institution of any civil action seeking recovery under § 130 of the Act, 15 U.S.C. § 1640. That being so, since corrective information was not sent to Kenneth Lirtzman before the present matter was filed, Spiegel, Inc. cannot avail itself of the protection of this statutory defense. The defendant's Seventh Affirmative Defense, therefore, being insufficient as a matter of law, also is ordered stricken.
The Eighth Affirmative Defense asserted in defendant's answer raises the question of whether § 130(b) of the Act, 15 U.S.C. § 1640(b), bars a class action "because the required disclosures were mailed to all other persons who placed orders with *1034 Spiegel, Inc. within fifteen days after receipt of such orders and before any of these persons instituted any lawsuit or gave defendant written notice of an alleged error." Plaintiff, in seeking to have this Defense stricken, argues that because he filed this action in a representative capacity on behalf of all members of the purported class, institution of the present action terminated defendant's ability to cure as to all other members of the purported class. Mr. Lirtzman, however, has cited no authority for this proposition. The court, moreover, is not convinced that under no set of circumstances could this affirmative defense succeed. If, for example, it is determined that Kenneth Lirtzman is not a proper class representative, or if the purported class is not certified, it is possible that Spiegel, Inc. could, based upon § 130(b) of the Act, prevail over the remaining members of the purported class. As that is so, plaintiff's motion to strike the Eighth Affirmative Defense will be denied.
Spiegel, Inc.'s Ninth Affirmative Defense involves § 130(c) of the Act, 15 U.S.C. § 1640(c). § 130(c) provides a creditor with a defense where the disclosure requirements violation in question was not intentional, but instead resulted from a bona fide error "notwithstanding the maintenance of the procedures reasonably adapted to avoid [such] error."
Although there has been some conflict regarding the type of bona fide error to which the statutory defense provided by § 130(c) is applicable, the term "bona fide error" has been defined as "an error made in the course of a good faith attempt at compliance." Mirabal v. General Motors Acceptance Corp., 537 F.2d 871, 878 (7th Cir. 1976). Spiegel, Inc.'s omissions of the disclosures required by the Act, rather than being clerical in nature, were judgmental with respect to the legal requirements of the Act. The majority of decisions, especially those in the Seventh Circuit, however, have held that the unintentional violation defense of § 130(c) is only available for clerical errors, and that it is wholly inapposite to deal with errors of law, such as the one now being raised by the defendant, even though such errors were made in good faith. Smith v. No. 2 Galesburg Crown Finance Corp., 615 F.2d 407, 418 (7th Cir. 1980); Mirabal v. General Motors Acceptance Corp., supra 537 F.2d 871, 878 (7th Cir. 1976); Haynes v. Logan Furniture Mart, Inc., 503 F.2d 1161, 1167 (7th Cir. 1974); Ratner v. Chemical Bank New York Trust Company, 329 F. Supp. 270, 281 (S.D.N.Y. 1971). Although Spiegel, Inc. has pointed out that several courts have held that § 130(c) is not limited in its application solely to clerical errors, see e. g., Welmaker v. W. T. Grant Company, 365 F. Supp. 531, 544 (N.D.Ga.1972), it should be noted that the Fifth Circuit has expressly refused to follow those decisions, at least to the extent that they may pertain to the defendant's present argument. McGowan v. King, Inc., 569 F.2d 845, 850 (5th Cir. 1978). In light of that fact, the court believes that the defendant's Ninth Affirmative Defense also should be stricken.
In its Tenth Affirmative Defense, Spiegel, Inc. contends that, even if it is found to have failed to disclose the information required by § 226.7(a)(9) of Regulation Z, 12 C.F.R. § 226.7(a)(9), which requires an accompanying statement in the initial disclosure concerning the consumer's rights to dispute billing errors, "this information is [in reality] irrelevant to the consumer when he first opens his account." The court strongly disagrees with this contention of the defendant. § 226.7(a) of Regulation Z sets out the specific disclosures that must be made in the initial disclosure statement, which is to be provided to the customer before the first transaction is made on any open end credit account.
To implement the Fair Credit Billing Act, the Board of Governors inserted a new disclosure subsection, as § 226.7(a)(9) of Regulation Z, which required the furnishing of a copy of the F.C.B.A. notice on or with the initial disclosure statement. Under the clear language of § 226.6(a) of Regulation Z, 12 C.F.R. § 226.6(a), the general disclosure rules apply to this notice.
In Truth-in-Lending cases, strict compliance with the specific provisions and *1035 disclosure requirements of the Act, and the implementing Federal Reserve Board regulations, always has been required. Smith v. No. 2 Galesburg Crown Finance Corp., supra 615 F.2d 407 (7th Cir. 1980); Kristiansen v. John Mullins & Sons, Inc., 59 F.R.D. 99 (E.D.N.Y.1973). It also is clear that Congress did not intend that creditors should escape liability for merely technical violations. Smith v. No. 2 Galesburg Crown Finance Corp., supra 615 F.2d 407, 416 (7th Cir. 1980); Pennino v. Morris Kirschman & Co., 526 F.2d 367 (5th Cir. 1976). Accordingly, regardless of how Spiegel, Inc. views the requirement, failure to timely provide the aforementioned F.C.B.A. notice constitutes a violation of the Act. That being so, as the defendant's Tenth Affirmative Defense must be considered insufficient as a matter of law, the plaintiff's motion to strike with respect to it is granted.
CONCLUSION
For the reasons stated above, plaintiff Lirtzman's motion to strike the defendant's Affirmative Defenses designated Three through Ten is GRANTED with respect to Defenses Six, Seven, Nine and Ten, and DENIED as to Defenses Three, Four, Five and Eight.
IT IS SO ORDERED.
NOTES
[1] When ruling upon a motion to strike, it also is well established that the court must view the pleading under attack in a light most favorable to the pleader. McCormick v. Wood, 156 F. Supp. 483 (S.D.N.Y.1957); Wohl v. Blair & Co., 50 F.R.D. 89, 91 (S.D.N.Y.1970). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1560345/ | 945 A.2d 723 (2008)
400 N.J. Super. 28
STATE of New Jersey, Plaintiff-Respondent
v.
Forrest M. BAKER, Sr., Defendant-Appellant.
No. A-6018-05T4
Superior Court of New Jersey, Appellate Division.
Argued January 16, 2008.
Decided April 14, 2008.
*725 Jacqueline E. Turner, Assistant Deputy Public Defender, argued the cause for appellant (Yvonne Smith Segars, Public Defender, attorney; Ms. Turner, on the brief).
Jason D. Saunders, Assistant Prosecutor, argued the cause for respondent (Robert D. Bernardi, Burlington County Prosecutor, attorney; Mr. Saunders, on the brief).
Before Judges AXELRAD, SAPP-PETERSON and MESSANO.
The opinion of the court was delivered by MESSANO, J.A.D.
Defendant Forrest M. Baker, Sr. was charged in Indictment XXXX-XX-XXX with robbery in the first degree, N.J.S.A. 2C:15-1(a), and using a juvenile to commit a crime in the first degree, N.J.S.A. 2C:24-9(a). The juvenile in question was his son, M.B., thirteen years old at the time.[1] Defendant was found guilty of both counts after a jury trial and the State moved for an extended term of imprisonment pursuant to the "Three Strikes Act," N.J.S.A. 2C:43-7.1. After granting the State's motion, the trial judge imposed a mandatory life sentence without parole on the first-degree robbery, and a concurrent sentence of fifteen years, seven and one-half years without parole, on the second count. The judge ordered these sentences to run consecutively to a federal sentence defendant was already serving. All appropriate fines and penalties were also imposed.
On appeal, defendant raises the following issues for our consideration:
POINT I
THE TRIAL JUDGE ERRED IN DENYING [] DEFENDANT'S MOTION TO DISMISS THE CHARGES, AS THE VIOLATION OF THE INTERSTATE ACT ON DETAINERS MANDATED DISMISSAL.
POINT II
THE TRIAL JUDGE ERRED IN ADMITTING EVIDENCE OF UNRELATED ROBBERIES. IN ADDITION, *726 THE CURATIVE CHARGE TO THE JURY WAS INADEQUATE (Partially Raised Below).[2]
POINT III
THE DEFENDANT'S SENTENCE IS EXCESSIVE.
We have considered these contentions in light of the record and applicable legal standards. We affirm.
I.
At approximately 4:00 p.m. on June 29, 2002, Matilda Dodson, the assistant manager of the Rite Aid store in Mount Laurel, was near the cash register when she was approached by a teenage boy who removed a gun from under a newspaper and announced a robbery. Dodson told him to take what he wanted from the register as she moved to the back of the store to tell the other employees what was occurring. The young man took approximately $200 from the register and left. Dodson called the police.
The robbery went unsolved for several months until M.B., in the company of his aunt and uncle, came to the Mount Laurel police station. M.B. was advised of his Miranda[3] rights and provided a detailed statement implicating himself and defendant in the robbery. M.B. claimed that defendant gave him the gun and threatened him with death unless he committed the robbery. He also implicated defendant in other unsolved bank robberies in the area.
A federal arrest warrant was issued for defendant, and a search warrant was also issued for his residence, his mother's residence, and his car. The search of the vehicle resulted in the seizure of a fake mustache, a bank card in defendant's name, and a .45 caliber pellet gun that was described at trial as "very realistic."
Agents of the Federal Bureau of Investigation (FBI) arrested defendant and questioned him at their Cherry Hill offices. After defendant was administered his Miranda rights, he admitted that on June 28, 2002, while his son was in the car, he robbed the Equity Bank in Cherry Hill. He further claimed that he returned to the car with a pillowcase full of money and gave it to M.B. to hold. However, a dye pack in the money exploded, and defendant told M.B. to throw the pillowcase and the proceeds of the robbery out of the vehicle, which he did.
Members of the Mount Laurel police department also questioned defendant about the robbery of the Rite Aid. Although he initially told the police he did not tell his son to rob the store, defendant later acknowledged that "he may have dared him to do it, but he d[id] not recall telling him, or . . . threatening him to go commit the robbery." Defendant also acknowledged knowing that M.B. had in fact committed the Rite Aid robbery.
At trial, M.B. testified that defendant told him as they drove to the Rite Aid that they "didn't have any money and [they] needed money." Defendant told M.B. that he should "go in and rob the Rite Aid," and told him where he would be waiting with the car. M.B. claimed defendant gave him the gun and the newspaper, that he felt threatened by defendant, was afraid of him, and believed he had to commit the robbery. After leaving the Rite Aid, M.B. testified that he returned to the waiting car and gave defendant the money. *727
Based upon the judge's earlier ruling that we discuss in greater detail below, M.B. was permitted to testify about his knowledge of defendant's robbery of the Equity Bank the day before the Rite Aid robbery. According to M.B., he drove to the bank with his father who was wearing some sort of disguise and was carrying the same gun M.B. was to use the following day. Defendant entered and robbed the bank, returned to the car and gave M.B. a pillowcase full of money. As they drove away, a red dye pack exploded, M.B. began to cough and sneeze, and defendant told him to throw the bag out of the car window. He did.
Defendant did not testify at trial, however, his mother was called as a defense witness. She testified that defendant's three children lived with her sporadically, described M.B.'s troubled relationship with his father and noted that on occasion M.B., who had impulse control problems, had taken his father's car without permission. Defendant's fifteen year-old daughter, B.B., and his fourteen year-old son, E.B., were also called as defense witnesses, though neither provided any relevant or exculpatory information. Both denied telling defendant's investigator that M.B. had admitted committing the Rite Aid robbery by himself. The defense rested after calling investigator Annie Prochorencko, who testified that she interviewed B.B. and the girl told her that M.B. 1) "had done [the robbery] himself"; 2) had taken defendant's car "while [he] was sleeping"; and 3) had "blamed defendant because he was afraid of the consequences to himself."
II.
Defendant first argues that the trial judge erred in denying his pre-trial motion to dismiss the indictment based upon the State's alleged violation of the Interstate Agreement on Detainers (the IAD), codified in New Jersey at N.J.S.A. 2A:159A-1 to -15. Alternatively, he argues we should remand the matter to the trial court for a plenary hearing on the issue.
At oral argument on his pre-trial motion, defendant claimed that during the months after he commenced his federal sentence, he was "shuttled back and forth between the federal prison and the Burlington County Jail, where he was facing the[se] state charges[.]" He claimed he would periodically be returned to the federal facility "to await the next state proceeding, whether for a plea discussion or motions." He argued that this conduct violated N.J.S.A. 2A:159A-4(e) and required dismissal of the indictment.
The State argued that the IAD had never been "triggered." It noted that defendant did not request to be brought before the court for disposition of the charges as permitted by N.J.S.A. 2A:159A-3. More importantly for purposes of this appeal, the prosecutor argued below "that each time [defendant] was brought in he was brought in on a writ at the request of the [c]ourt not at the request of the [e]xecutive [b]ranch or the [p]rosecuting agency. . . . The IAD simply was not implicated there."
The judge concluded
The IAD was not triggered here. . . . [A]lthough he's on a Federal reservation, he's still within the jurisdiction of this Court, so, therefore, there is no need for an IAD. I can reach out and touch him any time I want to as long as he's physically in New Jersey.
The judge denied the motion to dismiss and reaffirmed the scheduled trial date of January 6, 2006. Thereafter, defendant was produced for his trial pursuant to the court's order to produce him, was apparently returned to federal custody to await his sentence date, and once again produced *728 before the trial judge on February 17, 2006 for the imposition of sentence.
Defendant has reiterated this argument on appeal. Before turning to its merits, we dispatch with the alternative suggestion defendant has made, specifically that the matter be remanded for a plenary hearing to determine exactly how he was produced from the federal facility for the several appearances he made before his trial commenced. We view the request as unnecessary.
The undisputed record reveals that on July 16, 2003, defendant pled guilty to five federal bank robbery charges and was sentenced on November 25, 2003, to an aggregate sentence of seventy-eight months. On January 6, 2004, he began serving that sentence at the federal correctional facility at Ft. Dix in Wrightstown.
The State asserts that defendant was produced before the trial judge on each occasion as the result of the judge's "orders to produce." In its brief, the State attached sixteen such orders, the first dated July 28, 2003, while defendant was housed in the federal detention center in Philadelphia, the last ordering that defendant be produced for his sentence on February 17, 2006. Each order was requested by the criminal case manager and signed by the judge. Defendant does not offer any proof to the contrary and acknowledges in a detailed pro se certification he filed in support of the motion that he was produced before the trial judge by use of a "Writ of Habeas Corpus ad Prosequendum." In short, the record that exists indicates clearly that defendant was repeatedly brought before the judge based upon the court's orders to produce him. We discern no requirement for a more extensive record on the issue and we turn instead to the merits of defendant's argument.
Initially, we agree with defendant that the trial judge was mistaken in his belief that the IAD was inapplicable because defendant was a federal prisoner housed in New Jersey and not another state. The definitional portion of the statute, N.J.S.A. 2A:159A-2(a), makes it clear that as used in the IAD, "state" means "a State of the United States; the United States of America; a territory or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico."
In United States v. Thompson, the Third Circuit concluded that the IAD applies "where the Federal Government is trying a state prisoner serving his state sentence within the geographical limits of the state in which the federal district court is located." 562 F.2d 232, 234 n. 2 (3d Cir.1977) (citing United States v. Sorrell, 413 F.Supp. 138, 140-41 (E.D.Pa.1976), cert. den., 436 U.S. 949, 98 S.Ct. 2858, 56 L.Ed.2d 793 (1978)); see also United States v. Schrum, 504 F.Supp. 23, 25 (D.Kan.1980) (holding "that the strictures of the [IAD] are applicable to `interjurisdictional transfers' of prisoners from state to federal custody, and vice-versa, once a detainer has been lodged even though there may be no transfer across any state boundary"), aff'd, 638 F.2d 214 (10th Cir.1981). Therefore, it did not matter that defendant was in federal custody in New Jersey and not physically in another state for purposes of the IAD.
However, the State argues, as it did below, that the IAD was never "triggered" because it never lodged a detainer against defendant nor moved pursuant to N.J.S.A. 2A:159A-4 to have him produced in state court for his trial. That section of the IAD provides in relevant part,
(a) The appropriate officer of the jurisdiction in which an untried indictment, information or complaint is pending shall *729 be entitled to have a prisoner against whom he has lodged a detainer and who is serving a term of imprisonment in any party State made available . . . upon presentation of a written request for temporary custody or availability to the appropriate authorities of the State in which the prisoner is incarcerated. . . .
* * * *
(c) [T]rial shall be commenced within 120 days of the arrival of the prisoner in the receiving State, but for good cause shown in open court, the prisoner or his counsel being present, the court having jurisdiction of the matter may grant any necessary or reasonable continuance.
* * * *
(e) If trial is not had on any indictment, information or complaint contemplated hereby prior to the prisoner's being returned to the original place of imprisonment . . ., such indictment, information or complaint shall not be of any further force or effect, and the court shall enter an order dismissing the same with prejudice.
Defendant contends that even if the State never initiated the process of securing defendant's presence in state court by lodging a formal detainer and proceeding in accordance with § 4 of the IAD, the court's orders were the functional equivalent of a detainer and the remedy accorded by the statute dismissal of the indictment was appropriate since it is undisputed that defendant was not tried within the time limits of § 4(c) and the State never sought any extension of those limits for "good cause." See also N.J.S.A. 2A:159A-5(c) (providing for dismissal of any indictment if the time limits contained in § 4 are not met).
New Jersey, forty-seven other states, the District of Columbia, Puerto Rico, the Virgin Islands, and the United States are all signatories to the IAD. State v. Pero, 370 N.J.Super. 203, 206, 851 A.2d 41 (App.Div.2004) (citing Carchman v. Nash, 473 U.S. 716, 719, 105 S.Ct. 3401, 3403, 87 L.Ed.2d 516, 520 (1985)). Since the IAD is a "congressionally sanctioned interstate compact," the interpretation of the IAD "presents a question of federal law." Cuyler v. Adams, 449 U.S. 433, 442, 101 S.Ct. 703, 709, 66 L.Ed.2d 641, 650 (1981). Therefore, "[f]ederal court interpretations of the IAD . . . [are] binding upon state courts." Pero, supra, 370 N.J.Super. at 214, 851 A.2d 41.
The IAD undoubtedly serves several laudable goals from the perspective of an inmate in custody in another jurisdiction. We have noted that "[t]he intent and rationale" behind the act "was to counter the perceived evil when prosecutorial delay or inattention fail to provide a defendant incarcerated in another jurisdiction an opportunity for prompt disposition of charges" thereby "potentially prejudic[ing] a prisoner's opportunities and even his potential for concurrent sentences." Id. at 221, 851 A.2d 41. Additionally, focusing on the inmate's status within his own correctional facility, we have noted that "[t]he purpose of the IAD is to expedite outstanding charges in order to protect prisoners from the adverse consequences of detainers." Van Winkle v. New Jersey Dep't of Corr., 370 N.J.Super. 40, 46, 850 A.2d 548 (App.Div.2004) (citing Johnson v. Cuyler, 535 F.Supp. 466, 473 (E.D.Pa. 1982), aff'd, 714 F.2d 123 (3d Cir.1983) (applying New Jersey law)). One such adverse consequence is the "uncertaint[y]" produced by detainers "which obstruct programs of prisoner treatment and rehabilitation." N.J.S.A. 2A:159A-1; see Adams, supra, 449 U.S. at 449, 101 S.Ct. at 712, 66 L.Ed.2d at 654; United States v. Mauro, 436 U.S. 340, 360, 98 S.Ct. 1834, 1847, 56 L.Ed.2d 329, 347 (1978) (noting that "[b]ecause a detainer remains lodged *730 against a prisoner without any action being taken on it, he is denied certain privileges within the prison, and rehabilitation efforts may be frustrated").
Whether that was the specific purpose behind the enactment of the "anti-shuttling" provisions of § 4 of the IAD, however, is less clear. In rejecting the state of Alabama's argument that a one-day shuttle from federal prison to state court was de minimis because it did not interrupt any rehabilitative efforts, and thus did not violate the purpose of § 4, the United States Supreme Court noted
[T]he [IAD's] drafters may have thought that the "shuttling" itself, i.e., the movement back and forth among prisons, adds to the `uncertainties which obstruct programs of prisoner treatment and rehabilitation'. . . . And they may have sought to minimize the number of "shuttles" for that reason alone. . . . But we need not decide precisely what led Congress and the many other legislatures to agree to [§ 4]'s anti[-]shuttling remedy. [Alabama v. Bozeman, 533 U.S. 146, 155-56, 121 S.Ct. 2079, 2086, 150 L.Ed.2d 188, 197 (2001) (emphasis omitted)].
We, too, need not determine whether § 4's purpose was to assure that any rehabilitative efforts taking place in defendant's federal institution were not thwarted, or that defendant did not suffer the denial of privileges as a result of his frequent appearances before the trial judge. We note, however, that defendant has certainly brought no such consequences to our attention.[4]
The reason why defendant's argument is unavailing is found in the express language of the IAD. We have held that the statute is only triggered if the State has filed a detainer with the custodial state in the first instance. State v. Burnett, 351 N.J.Super. 222, 226, 798 A.2d 96 (App.Div. 2002). Here, since the State never filed a detainer with the federal correctional authorities, our inquiry would seem ended. Defendant asserts, however, that the judge's orders to produce him from federal custody were the functional equivalent of a detainer under the IAD and therefore triggered § 4's protections against "shuttling."
Although the term "detainer" is not defined in the IAD, the United States Supreme Court has held that it is "a request filed by a criminal justice agency with the institution in which a prisoner is incarcerated, asking the institution either to hold the prisoner for the agency or to notify the agency when release of the prisoner is imminent." Carchman, supra, 473 U.S. at 719, 105 S.Ct. at 3403, 87 L.Ed.2d at 520. In Mauro, supra, the Court held unequivocally that "a writ of habeas corpus ad prosequendum is not a detainer for purposes of the [IAD]." 436 U.S. at 361, 98 S.Ct. at 1848, 56 L.Ed.2d at 347; see also Diggs v. Owens, 833 F.2d 439, 443 (3d Cir.1987) (holding that prisoner's transfer of custody to state prosecuting authorities pursuant to writ of habeas corpus ad prosequendum did not trigger the provisions of the IAD), cert. denied, 485 U.S. 979, 108 S.Ct. 1277, 99 L.Ed.2d 488 (1988); United States v. Marzgliano, 588 F.2d 395, 397 (3d Cir.1978). In part, the Court's ruling was based upon the fact that the statutory authority for the federal courts to issue such writs, 28 U.S.C.A. 2241(c)(5), existed long before Congress adopted the IAD, thereby implicitly excluding writs of habeas corpus ad prosequendum from the term "detainer." Mauro, supra, 436 U.S. at *731 357-61, 98 S.Ct. at 1846-48, 56 L.Ed.2d at 345-47. New Jersey similarly has provided courts with long-standing statutory authority to produce prisoners for purposes of standing trial, at least within the jurisdictional bounds of the issuing court. See N.J.S.A. 2A:67-4(d)(permitting removal of prisoner "for his trial or discharge in due course of law").[5]
However, in Mauro, the Court also noted that if a detainer has in fact been lodged against a prisoner, the use of a writ of habeas corpus ad prosequendum to produce him was the equivalent of the government's "written request for temporary custody" pursuant to § 4 of the IAD, thus triggering the statute's time limits. Mauro, supra, 436 U.S. at 362, 98 S.Ct. at 1848, 56 L.Ed.2d at 348. Since Mauro, it would appear that the federal courts have unanimously followed this "writ plus" test to determine whether the provisions of the IAD are triggered, though there exists some debate as to whether the additional law enforcement action taken in the particular factual circumstances presented was the functional equivalent of a detainer.[6]
The decisions of the courts in our sister states also support the conclusion that the production of a prisoner before a state court pursuant to a writ of habeas corpus ad prosequendum, standing alone, is insufficient to trigger the provisions of the IAD's anti-shuttling provision. For example, in People v. McLemore, 411 Mich. 691, 311 N.W.2d 720 (1981), a case that is factually similar to the one at hand, the defendant was produced from a federal detention center in Michigan for an appearance on state charges in Detroit pursuant to a writ of habeas corpus ad prosequendum. Id. at 721. The Michigan Supreme Court concluded that a decision by federal authorities to honor a writ of habeas corpus ad prosequendum as a matter of comity does not trigger the IAD. Ibid.
Likewise, in People v. Hines, 817 P.2d 559 (Colo.Ct.App.1991), another factually similar case, the defendant sought dismissal of his state charges after being produced from a federal correctional facility in Colorado, and returned three times, prior to final disposition. Id. at 560. Finding Mauro to be "dispositive," the court denied the defendant's challenge. Id. at 561. See also Shanks v. Commonwealth, 574 S.W.2d 688, 690 (Ky.Ct.App.1978) (holding a writ is not a detainer).
However, like their federal counterparts, some state courts have utilized the "writ plus" test and concluded that the anti-shuttling provisions of the IAD were triggered despite the lack of any formal detainer. See Runck v. State, 497 N.W.2d 74, 80 (N.D.1993) (holding a writ plus other documents used to transfer federal prisoner to state court were sufficient to trigger *732 IAD); Finley v. State, 295 Ark. 357, 748 S.W.2d 643, 645 (1988) (holding that court order requiring sheriff to make arrangements for the transfer of the defendant from federal to state custody constituted a detainer for purposes of the IAD); Commonwealth v. Wilson, 399 Mass. 455, 504 N.E.2d 1060, 1065 (1987) (holding the issuance of a writ after the lodging of a detainer on other charges was sufficient to trigger the IAD); but compare State v. Williams, 253 Neb. 619, 573 N.W.2d 106, 111-12 (1997) (concluding a state writ used to produce a defendant from federal custody was not a detainer triggering the IAD despite the federal institution's receipt of a state arrest warrant and forms utilized under the IAD).
In this case, it is undisputed that the State never filed an actual detainer against defendant while he was housed in any of the federal correctional facilities. Additionally, defendant has not marshaled any evidence that would support the conclusion that anything other than the trial court's orders were ever used to produce him in court in Burlington County, or that any other document was ever "filed" with the federal authorities to preserve the opportunity to do so in the future. Therefore, we find the United States Supreme Court's holding in Mauro to be dispositive of the issue presented here. The orders to produce were not the functional equivalents of detainers for purposes of the IAD and defendant's pre-trial motion to dismiss for an alleged violation of § 4 of the IAD was properly denied.
III.
Defendant's next point is actually two-fold. First, he contends the judge erred when he permitted the State to introduce any evidence of the prior bank robbery over defendant's objection. Second, defendant contends that the judge's limiting instruction was not given when the evidence was admitted, and that the instruction given in the final jury charge was inadequate and erroneous. In this regard, defendant neither requested an interim instruction, nor objected to the final charge as given. Therefore, as to this sub-issue, we must review the contention and assess whether it was plain error. R. 2:10-2.
A.
Before the jury was selected, the judge conducted a hearing to determine the admissibility of defendant's statement to the FBI and his subsequent statement made the same day to Mount Laurel police personnel. Neither statement was recorded nor reduced to writing.
FBI agent Kevin Burton testified that defendant admitted committing the Equity Bank robbery on June 28, with M.B. present, and he acknowledged that the dye pack exploded and he told M.B. to discard the money and pillowcase. Investigator Edward Pincus of the Mount Laurel police department testified that defendant admitted being present at the Rite Aid with M.B., but denied having anything to do with the robbery. Defendant did not recall threatening M.B. to commit the crime, but said he "may have dared his son to do it." Defendant claimed that M.B. came out of the store with the money, returned to the car with it, but that he did not know what M.B. did with the proceeds.
After ruling the statements were admissible under Miranda, the judge inquired whether the State intended to offer any other evidence in support of its N.J.R.E. 404(b) application to admit testimony regarding the earlier bank robbery. The prosecutor noted "there is a statement by the juvenile. . . . If your honor is inclined I could call that witness." Before breaking for lunch, the judge responded, *733 "that's your call as to whether . . . you want to supplement the testimony that was . . . given here." After the recess, the prosecutor advised the judge that he "would rely on the testimony of [the FBI agent] regarding the comments that defendant made to him about that June 28th robbery." M.B. was not called as a witness at the hearing.
In seeking to admit the evidence of the prior robbery, the prosecutor contended
Any argument regarding that the defendant did not know that the juvenile was going in to commit the robbery at the Rite Aid is certainly connected to the fact that the very day before the juvenile was in the car with the father when he committed a robbery and a die (sic) pack exploded. It's very demonstrative, very unique situation. The theory is . . . I'm showing you the ropes, son, and tomorrow is your turn. . . .
Defendant argued the evidence was not admissible to any "material issue" in the case, was not "clear and convincing," and its probative value was clearly outweighed by it prejudicial effect upon defendant.
The judge considered the issue in light of State v. Cofield, 127 N.J. 328, 605 A.2d 230 (1992). He found the evidence of the prior bank robbery to be relevant to the "material issue" of defendant's intent and whether "there was knowledge or a plan in the robbery of the Rite Aid." The judge found the two robberies to be "similar in kind," both being first-degree robberies involving defendant and M.B., and "close in time," being one day apart. The judge found the evidence of the prior robbery to be "clear and convincing" because defendant had been convicted of the bank robbery. Lastly, the judge determined the evidence of the prior robbery was "very prejudicial" to defendant, however, he concluded that its probative value outweighed that prejudice.
We note first that defendant lodged no objection to M.B.'s testimony regarding the June 28 bank robbery. Therefore, we consider the argument solely as it has now been raised that any testimony regarding the prior robbery was inadmissible under N.J.R.E. 404(b). We reject this contention substantially for the reasons expressed by the trial judge.
Defendant contended in his statement to the police that he did not know M.B. was going to commit the robbery; he implied that though he may have dared M.B. to do so, he did not intend for him to rob the Rite Aid. He also claimed that he did not know what M.B. did with the proceeds of the robbery certainly implying that he had no intention himself of committing the robbery. Through the defense witnesses, defendant sought to support this claim by asserting that M.B. had essentially committed the crime himself without the support, or possibly even the presence, of defendant. Thus, a material issue in dispute was defendant's knowledge of M.B.'s actions and his intent to participate in the Rite Aid robbery. Therefore, evidence that tended to prove that one day earlier the same father and son were together committing another robbery, utilizing the same weapon and the same vehicle, was highly probative because it demonstrated a shared purpose and negated defendant's claims of lack of knowledge and intent. We therefore find no error in its admission.
B.
Defendant's second argument regarding the N.J.R.E. 404(b) evidence is that the judge erred in not providing an immediate limiting instruction when the evidence was received by the jury, and that the judge's final limiting instruction was erroneous because it allowed the jury *734 to use the evidence for an impermissible purpose. Since defendant never requested an immediate limiting instruction, and did not object to the charge as given, we consider whether the alleged error amounts to plain error. State v. Afanador, 151 N.J. 41, 54, 697 A.2d 529 (1997); R. 2:10-2.
"In the context of a jury charge, plain error requires demonstration of `[l]egal impropriety . . . prejudicially affecting the substantial rights of the defendant sufficiently grievous to justify notice by the reviewing court and to convince the court that of itself the error possessed a clear capacity to bring about an unjust result.'" State v. Burns, 192 N.J. 312, 341, 929 A.2d 1041 (2007)(quoting State v. Jordan, 147 N.J. 409, 422, 688 A.2d 97 (1997) (citations omitted)). The allegation of error must be assessed in light of "the totality of the entire charge, not in isolation." State v. Chapland, 187 N.J. 275, 289, 901 A.2d 351 (2006). While an erroneous jury charge has been held to be a "`poor candidate[] for rehabilitation' under the plain error theory," Jordan, supra, 147 N.J. at 422, 688 A.2d 97 (citation omitted), we nonetheless consider the effect of any error in light "of the overall strength of the State's case." Chapland, supra, 187 N.J. at 289, 901 A.2d 351.
We have already noted that a judge should give a limiting instruction on the permissible uses of the N.J.R.E. 404(b) evidence when it is admitted. State v. Angoy, 329 N.J.Super. 79, 89-90, 746 A.2d 1046 (App.Div.), certif. denied, 165 N.J. 138, 754 A.2d 1214 (2000); see also State v. Blakney, 189 N.J. 88, 93, 912 A.2d 140 (2006)(noting "the better practice is to give limiting instructions not only at the time that other-crimes evidence is presented, but also in the final jury charge"). However, if the final charge is "accurate, clear and comprehensive," we have concluded any delay, even if two weeks have elapsed between the introduction of the evidence and the final instruction, is not plain error. Angoy, supra, 329 N.J.Super. at 89, 746 A.2d 1046. Here, the final jury charge was given one week after admission of the other crime testimony. Delay in giving the limiting charge, therefore, was not in and of itself plain error. We turn our attention to the adequacy of the final instructions since that is determinative of whether reversal is required.
The judge's instruction tracked the model jury charge and began by advising the jurors that evidence of the prior bank robbery would normally be excluded if it was introduced to show defendant "has a disposition or a tendency to do wrong and, therefore, must be guilty of the charged offense." He then proceeded to tell the jurors that if "satisfied that the defendant committed the other crime," they were permitted to use the evidence for "a certain specific narrow purpose." He continued
In this case, the evidence was introduced as to the issues of intent and motive. There was testimony presented that the defendant did not receive any proceeds from the bank robbery. There was also testimony that the Rite Aid Store was robbed so that the defendant and his son could get money. You may find that this evidence relates to the issues of intent and motive and may assist you in determining the issue of why the Rite Aid robbery took place.
Whether this evidence does, in fact, demonstrate intent and motive is for you to decide.
* * * *
However, you may not use this evidence to decide that the defendant has a tendency to commit crimes or that he is a bad person. . . . I have admitted the evidence only to help you decide the specific question of intent and motive. *735 You may not consider it for any other purpose. . . .
The judge distributed his charge in writing to the prosecutor and defense counsel before hand. The prosecutor specifically requested that the judge include "knowledge" as a permissible purpose for which the jury could use the evidence. As the prosecutor noted, "[p]art of the reason why [the evidence] was let in . . . is also for knowledge in that [in] defendant's statement to the investigators . . . [he] says I don't really have knowledge of what [M.B.] was about to go in and do. . . ." Defense counsel objected and stated, "I think the charge as written by the Court and as reviewed previous[ly] is sufficient." Thus, not only did defendant not object to the charge, he requested the judge not provide any instruction that the evidence could be permissibly used by the jury to demonstrate defendant's knowledge of what was about to occur at the Rite Aid store on the day of the robbery.
Defendant takes issue not with the propriety of the charge in a general sense. Rather, he argues that the judge told the jury it could consider the evidence as to "intent and motive," despite ruling earlier that it was admissible to demonstrate defendant's intent and knowledge of the plan to rob the Rite Aid. Relying upon our decision in State v. Mazowski, 337 N.J.Super. 275, 766 A.2d 1176 (App. Div.2001), defendant argues that by telling the jury they could use the evidence of the bank robbery to assess defendant's motive in robbing the Rite Aid store so "defendant and his son could get money" the judge permitted speculation as to defendant's "need for cash," thus fueling the jury's conclusion that defendant had a propensity for crime.
In Mazowski, we reversed defendant's burglary conviction because the repeated "reference to defendant's drug use violated the prohibition of N.J.R.E. 404(b) against using evidence of `other crimes' to demonstrate a propensity to commit further crime, and [ ] the evidence was not admissible as `proof of motive.'" Id. at 278, 766 A.2d 1176. We concluded that evidence of defendant's drug use and addiction as a motive for his constant need for money
[p]osed [an] extremely broad definition of `motive,' [] that [] does not relate to the particular crime with which defendant is charged, or to any other particular crime. Rather, it is . . . a reason why defendant commits crime in general. It is an undifferentiated `motive' to steal. As such, except for its label, it is indistinguishable from a claim that defendant has a `disposition,' or general propensity to commit crimes, which is precisely what N.J.R.E. 404(b) prohibits.
[Id. at 282, 766 A.2d 1176.]
While the better course may have been not to charge "motive" as a permissible use of the evidence in this case, we conclude it was not plain error to do so for a number of reasons.
First, we think the facts of this case are amply distinguishable from Mazowski. There, the trial judge permitted repeated and non-specific references to defendant's admitted drug abuse as evidence of his motive for committing the crime charged. Here, the other crime evidence was limited to just one incident, the bank robbery the day before, thus providing more focus for the jury and making it much less likely that the other crime evidence would lead to a conclusion that defendant had a "propensity" to commit crime. Additionally, the judge told the jury that the evidence could not be used for that purpose.
Second, given all the evidence adduced, the unusual facts of the bank robbery provided some context for the motive in robbing the Rite Aid. We acknowledge, as defendant argues, that every robbery has as its motive the desire to acquire money *736 or other things of value. However, because the bank robbery committed one day earlier in nearby Cherry Hill failed, defendant's desire to have his son rob the Rite Aid, as opposed to doing it himself, becomes more understandable. In a sense, under these unusual facts, the line between defendant's intent, clearly a material issue in dispute for which the N.J.R.E. 404(b) evidence was permissible, and his motive, for which its use was more questionable, begins to blur. See State v. Hernandez, 170 N.J. 106, 129, 784 A.2d 1225 (2001) (noting permissible use of "temporally proximate drug sales . . . to counter [defendant's] suggestion that [witness's] `motive' or `state of mind' in giving him money and his `motive' or `state of mind' in receiving it" were innocent and not criminal).
Lastly, given defendant's objection to the State's request to include in the charge "knowledge" as a permissible use of the other crime evidence, his failure to object to the charge as given, the judge's proper instruction that the evidence could be used to prove defendant's intent, and the overall strength of the State's case, we cannot conclude the charge was plain error.
IV.
Defendant's final argument is that the sentence imposed upon him was excessive. In particular, he contends the trial judge erred by ordering the sentence to run consecutively to his federal sentence because the string of bank robberies that were the subject of the federal charges and the Rite Aid robbery all occurred in close temporal proximity and while defendant was addicted to painkillers. We deem this argument to be of insufficient merit to warrant extensive discussion in this opinion. R. 2:11-3(e)(2). We add only the following brief comments.
In imposing the consecutive sentence, the judge noted he was doing so "pursuant to State v. Yarbough"[7] which "says that the sentence should be consecutive." While this analysis may have been cursory, we nonetheless conclude that the consecutive sentence was justified under Yarbough's analytical framework and was not "a clear error of judgment that [] shocks the conscience." State v. Megargel, 143 N.J. 484, 493, 673 A.2d 259 (1996).
Defendant committed this crime with his son who was not involved in the other robberies, save the one committed at the Equity Bank. The bank robberies involved occurred over a six-month period which we view as hardly being in temporal proximity to each other. Each robbery involved a different victim. In short, we find no abuse by the judge of the wide discretion accorded in determining the appropriate sentence.
Affirmed.
NOTES
[1] Because of his age, we refer throughout the opinion to defendant's son by the use of initials.
[2] Although defendant uses the plural, "robberies," in his point heading, it is clear that the judge permitted evidence of only one other crime as we discuss below.
[3] Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966).
[4] In the "declaration" he filed pro se in support of his motion to dismiss, defendant claimed, without any detail, his "rehabilitation efforts . . . [were] continuously being interrupted." That claim was not specifically renewed before us.
[5] Since the issue has not been raised, we do not consider the propriety of the federal authorities' decision to honor the order to produce defendant issued by a New Jersey superior court judge. Defendant has not argued that the court's orders to produce him in this case were somehow defective.
[6] See United States v. Roy, 771 F.2d 54, 59 (2d Cir.1985) (issuance of a writ followed by a detainer triggers the provisions of the IAD), cert. denied, 475 U.S. 1110, 106 S.Ct. 1520, 89 L.Ed.2d 918 (1986); United States v. Fulford, 825 F.2d 3, 10 (3d Cir.1987)(arrest warrant lodged prior to execution of the writ is not the equivalent of a detainer under the IAD); United States v. Bamman, 737 F.2d 413, 415-16 (4th Cir.1984) (state prison officials' knowledge of federal investigation and decision to segregate prisoner, followed by issuance of federal writ was not "functional equivalent" of a detainer for purposes of the IAD), cert. denied, 469 U.S. 1110, 105 S.Ct. 789, 83 L.Ed.2d 783 (1985); United States v. Trammel, 813 F.2d. 946, 949 (7th Cir.1987) (holding "a detainer must issue from an act prior to and separate from the issuance of a subsequent writ of habeas corpus ad prosequendum").
[7] 100 N.J. 627, 498 A.2d 1239 (1985), cert. denied, 475 U.S. 1014, 106 S.Ct. 1193, 89 L.Ed.2d 308 (1986). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558040/ | 22 So.3d 92 (2009)
SHELTON
v.
STATE.
No. 5D09-1433.
District Court of Appeal of Florida, Fifth District.
November 3, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558081/ | 493 F.Supp. 552 (1980)
John W. ARNDT, Plaintiff,
v.
UNITED STATES of America, Defendant.
Civ. A. No. L-79-60.
United States District Court, S. D. Texas, Laredo Division.
July 28, 1980.
Daniel R. Rutherford, San Antonio, Tex., Lazaro Garza-Gongora, Jr., Laredo, Tex., for plaintiff.
J. A. "Tony" Canales, U. S. Atty., Helen M. Eversberg, Asst. U. S. Atty., Houston, Tex., Suzanne B. O'Neill, William W. Guild, Dept. of Justice, Tax Div., Dallas, Tex., for defendant.
MEMORANDUM AND ORDER
KAZEN, District Judge.
This is a suit for the refund of approximately $42,000.00 paid as Internal Revenue taxes. See 28 U.S.C. § 1346(a)(1) (1976). Pending before the Court is Defendant's Motion to Dismiss the complaint. The Plaintiff seeks to recover taxes which he paid on behalf of Upper Valley Aviation, Inc. ("Upper Valley"). Although not entirely clear from the complaint, Upper Valley apparently fell in arrears in paying its withholding and social security tax liabilities. While the complaint is virtually silent in this regard, Plaintiff's Memorandum in Opposition to the Government's Motion to Dismiss asserts that the IRS levied an attachment upon "certain properties" belonging to Plaintiff and Upper Valley. The memorandum then continues: "These assets were certain improvements which had been attached to real property and the Internal Revenue Service was in the process of selling the improvements in an effort to collect the taxes due by the corporation, Upper Valley Aviation, Inc." Memorandum in Support of Plaintiff's Opposition to Motion to Dismiss p.1. The complaint then adds that the Plaintiff "under protest and pain of losing his property by confiscation, paid . . . total taxes in the amount of $42,007.95". Plaintiff's Original Complaint ¶ III. Subsequent to the payment, the Plaintiff allegedly then filed three Forms 843 (Claim for Refund), claiming that "[t]he IRS dealth [sic] with Jerry Reasonover as though he were owner of the company, turning over the business to him, forcing (in effort) [sic] taxpayer Arndt to pay the *553 amount involved to temporarily protect his economic interest." Id. Exhibit A, B & C. On the three claims forms attached to the complaint and incorporated by reference therein, the Plaintiff asserts that he was not personally liable for Upper Valley's tax deficiency and that he was never personally assessed for this deficiency. The Plaintiff further alleges in the claim form that his payment was made under economic duress. Since the Commissioner did not act on the claim within six months, the Plaintiff filed the instant action praying for a refund and attorney's fees. See 26 U.S.C. § 6532(a)(1) (1976); 42 U.S.C. § 1988 (1976). The Defendant has now moved to dismiss this action on the ground that: (1) the Plaintiff has no standing to sue for a refund; and (2) the Court lacks the authority to award attorney's fees in the present suit. See Fed. R.Civ.P. 12(b)(2); 12(b)(6).
Section 1346 of Title 28 of the United States Code provides that the district court shall have original jurisdiction of any civil action against the United States for the recovery of any Internal Revenue tax alleged to be erroneously or illegally assessed or collected. 28 U.S.C. § 1346(a)(1) (1976). Courts have consistently held that only a "taxpayer" can bring a refund suit under section 1346. Collins v. United States, 209 Ct.Cl. 413, 532 F.2d 1344, 1347-48 n.2 (1976); Home Indemnity Co. v. Brennan, 430 F.Supp. 828, 830 (S.D.N.Y.1977); Mill Factors Corp. v. United States, 391 F.Supp. 387, 389 (S.D.N.Y.1975); see Lewis v. Reynolds, 284 U.S. 281, 283, 52 S.Ct. 145, 146, 76 L.Ed. 293 (1932). The term "taxpayer" means any person subject to any Internal Revenue tax. 26 U.S.C. § 7701(a)(14) (1976).
The present case is controlled by the decision in Busse v. United States, 542 F.2d 421 (7th Cir. 1976). In Busse, plaintiff's husband secretly liquidated a corporation. The plaintiff and her husband were subsequently divorced and plaintiff was awarded the family home by the divorce court. The IRS then assessed a tax deficiency against the couple for the tax on the income realized by the husband in liquidating the corporation. Plaintiff sold the home to raise cash and, in order to deliver a clear title to the buyer, paid the taxes assessed. The plaintiff subsequently sued for a refund. The issue before the court was whether one who is not liable for a tax but pays it to remove a lien against his property may sue for refund. The district court answered this question in the negative and dismissed the complaint. The Seventh Circuit affirmed and held that a refund suit cannot be maintained by one who pays a third party's taxes. Id. at 424. In doing so, the Seventh Circuit specifically distinguished the two cases principally relied upon by the present Plaintiff, namely United States v. Halton Tractor Co., 258 F.2d 612 (9th Cir. 1958) and Parsons v. Anglim, 143 F.2d 534 (9th Cir. 1944). According to the court, these two cases had to "be viewed in light of the failure of the Code prior to 1966 to provide a remedy for a third party whose property or interest in property was harmed by a wrongful governmental levy". Busse v. United States, 542 F.2d at 425. The Internal Revenue Code has since been amended to cure this deficiency. See 26 U.S.C. § 7426 (1976).
The prevailing view gleaned from the foregoing authorities is that unless the person suing is the one who is actually assessed and potentially owes the tax, no standing exists. See Home Indemnity Co. v. Brennan, 430 F.Supp. 828, 830 (S.D.N.Y. 1977). In the present case, the Plaintiff specifically pleads that he was not assessed the tax and he denies any personal liability. Instead, he implicitly alleges that the corporation was the sole liable party. Thus, while the Plaintiff may have a cause of action against the corporation on whose behalf he paid the taxes, he has no valid claim against the United States. See Fidelity & Casualty Co. of New York v. United States, 203 Ct.Cl. 486, 490 F.2d 960, 966 (1974). Moreover, it is clear that a refund suit cannot be brought by a person who owns or has an interest in property that has been levied upon to satisfy the tax obligations of a third party. Phillips v. United States, 346 F.2d 999, 1000 (2d Cir. 1965); First National Bank of Emlenton v. United States, 265 *554 F.2d 297, 299-300 (3d Cir. 1959); Economy Plumbing & Heating Co. v. United States, 470 F.2d 585, 589 (Ct.Cl.1972). As stated by the court in Busse, there is no good reason for distinguishing between a person whose property is seized to satisfy another person's taxes and a person who pays the tax to eliminate the threat of seizure. 542 F.2d at 425. Accordingly, it is ORDERED that Defendant's Motion to Dismiss is hereby GRANTED. Dismissal renders Plaintiff's claim for attorney's fees moot. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453641/ | 256 P.3d 121 (2011)
350 Or. 408
STATE
v.
ALVAREZ.
(S059114).
Supreme Court of Oregon.
May 26, 2011.
Petition for Review Denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558434/ | 22 So.3d 1150 (2009)
STATE of Louisiana
v.
Alfonzo Jermaine JOHNLOUIS.
No. 09-235.
Court of Appeal of Louisiana, Third Circuit.
November 4, 2009.
Rehearing Denied December 9, 2009.
*1152 J. Phillip Haney, District Attorney, New Iberia, LA, for Appellee, State of Louisiana.
William Jarred Franklin, Louisiana Appellate Project, Bossier City, LA, for Defendant/Appellant, Alfonzo Jermaine Johnlouis.
Jeffrey J. Trosclair, Assistant District Attorney Sixteenth Judicial District Court, Franklin, LA, for Appellee, State of Louisiana.
Alfonzo Jermaine, Angola, LA.
Court composed of MARC T. AMY, BILLY HOWARD EZELL, and JAMES T. GENOVESE, Judges.
EZELL, Judge.
The Defendant, Alfonzo Jermaine Johnlouis, was charged by bill of information filed on February 22, 2007, with possession of at least 28 but less than 200 grams of cocaine, in violation of La. R.S. 40:967; possession of marijuana, in violation of La.R.S. 40:966; and transactions involving proceeds from drug offenses, in violation of La.R.S. 40:1041. A plea of not guilty was entered on March 7, 2007. On September 17, 2007, the charge of possession of marijuana was severed. Trial by jury commenced on September 18, 2007, and the jury subsequently found the Defendant guilty on the remaining two counts.
A bill of information charging the Defendant as an habitual offender was filed on September 19, 2007. The Defendant was arraigned on January 30, 2008, and denied the allegations. On February 15, 2008, the Defendant was adjudicated a second felony offender and sentenced to fifty years at hard labor and to pay a fine of $75,000.00 on the charge of possession of at least 28 but less than 200 grams of cocaine. On the charge of transactions involving proceeds from drug offenses, he was sentenced to serve ten years at hard labor and to pay a fine of $20,000.00. The sentences and fines were ordered to run concurrently with each other. The trial court also ordered that the sentences run concurrently with a parole violation in docket number 99-1470.
A "Petition for Appeal" was filed on March 12, 2008, and subsequently granted. *1153 The Defendant is now before this court asserting three assignments of error. Therein, the Defendant contends there is insufficient evidence to prove he committed the offenses at issue, the trial court erred in denying his motion to suppress, and the sentences imposed are excessive.
FACTS
Police encountered the Defendant and his girlfriend, Semiko Brown, in the parking lot of Wrench Masters, an auto shop that was closed at the time. During a pat down, police found a large sum of cash in the Defendant's pocket. Police subsequently searched the Defendant's car and found 60.4 grams of cocaine under the driver's seat.
ERRORS PATENT
In accordance with La.Code Crim.P. art. 920, all appeals are reviewed for errors patent on the face of the record. After reviewing the record, we find there are three errors patent.
The bill of information contains an error in the citation for the charge of transactions involving proceeds from drug offenses. The bill of information provides this charge is a violation of La. R.S. 40:1049, instead of La. R.S. 40:1041. However, the erroneous citation of a statute in the charging instrument is harmless error as long as the error did not mislead the defendant to his prejudice. La.Code Crim.P. art. 464. The Defendant does not allege any prejudice because of the erroneous citation. Accordingly, this court finds that error is harmless.
Next, the trial court imposed an illegal sentence. In addition to the terms of imprisonment, the trial court imposed a fine of $75,000.00 on the enhanced sentence for the conviction of possession of cocaine, and a fine of $20,000.00 on the enhanced sentence for the conviction of transactions involving drug proceeds; the trial court ordered the $20,000.00 fine to run concurrently with the $75,000.00 fine.
In State v. Dickerson, 584 So.2d 1140 (La.1991), the supreme court held that the fine and default provisions of his sentence should be deleted:
[Louisiana Revised Statutes] 15:529.1 requires that the sentencing judge vacate the original sentence and resentence the defendant as a multiple offender. In resentencing, the judge must impose a sentence authorized by La.Rev. Stat. 15:529.1. That statute does not authorize the imposition of a fine, but only provides for enhanced sentences relating to the term of imprisonment. The trial judge was therefore without authority to impose a fine on resentencing under La.Rev.Stat. 15:529.1.
Accordingly, the fine and default provisions of defendant's sentence are deleted.
In light of the Dickerson case and La. R.S. 15:529.1, the court amends the Defendant's sentences to delete the fine provisions and instructs the trial court to make an entry in the minutes of court to reflect the amendment.
ASSIGNMENT OF ERROR NUMBER ONE
In his first assignment of error, the Defendant contends there was insufficient evidence to prove his guilt beyond a reasonable doubt for the offenses of possession of at least 28 but less than 200 grams of cocaine and financial transactions involving proceeds from drug offenses.
In reviewing the sufficiency of the evidence to support a conviction for negligent homicide, an appellate court in Louisiana is controlled by the standard of review adjudged by the United States Supreme *1154 Court in Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979),
"[T]he appellate court must determine that the evidence, viewed in the light most favorable to the prosecution, was sufficient to convince a rational trier of fact that all of the elements of the crime had been proved beyond a reasonable doubt." State v. Captville, 448 So.2d 676, 678 (La.1984).
State v. Desoto, 07-1804, p. 7 (La.3/17/09), 6 So.3d 141, 146 (alteration in original).
On December 20, 2006, at approximately 11:30 p.m., police officer Kirk Dunn and a trainee drove past Wrench Masters auto repair shop. Dunn saw two cars in the parking lot and a man crouched down by the tire of one of the cars. Since the business closed at approximately 5:00 p.m., Dunn and the trainee returned to the business and initiated contact with the Defendant and his girlfriend, Semiko Brown. When Dunn and the trainee arrived at Wrench Masters, they were approached by Brown. Brown informed Dunn that her car had been repaired, and she and the Defendant were there to pick it up. Her keys were supposed to be on one of the tires.
Dunn verified that Brown owned the car. During that time, the Defendant continued to look for Brown's keys. When Dunn approached the Defendant, the Defendant corroborated Brown's story and said he "brought" her to Wrench Masters. Dunn testified that the Defendant was nervous, stuttering, shaking, and would not make eye contact with him.
The driver's door of the Defendant's car, which the Defendant and Brown had arrived at Wrench Masters in, was open. Dunn testified that when he passed near the car, he smelled a strong odor of burnt marijuana. On direct examination, Dunn testified the Defendant did not respond when asked about the odor. However, on cross-examination, he testified that the Defendant denied having smoked marijuana.
Dunn testified that because the Defendant was nervous and uncooperative, he conducted a pat down of the Defendant. Dunn detected a large bundle in one of the Defendant's pocket. Dunn testified that when asked what the object was, the Defendant refused to answer. Thus, Dunn removed what turned out to be a large wad of money from the Defendant's pocket. Dunn did not know how the Defendant got the money and testified that the Defendant said he was not employed at that time. Dunn admitted he did not include information about the Defendant's employment status in the police report.
Dunn subsequently searched the Defendant's car and found two rocks of crack cocaine under the driver's seat. As a result, the Defendant was arrested for possession of crack cocaine, but Brown was not. Dunn testified that he did not determine who drove the Defendant's car to Wrench Masters. Additionally, he did not see anyone handle the drugs, and he could not say they did not belong to Brown. Semiko Brown testified that she was the Defendant's girlfriend. She then admitted that on November 21, 2006, she had been charged with possession with intent to distribute Lortab.[1]
Brown testified that she had the Defendant's car from approximately 10:00 a.m. until 11:18 p.m. on the date in question. She did not know where the Defendant was from 10:00 a.m. until 3:00 p.m. At approximately 10:30 p.m., the Defendant met her, and she drove to Wrench Masters.
Brown testified that she drove the Defendant's car to Wrench Masters to pick *1155 up her car, the key to which was supposed to be left on a tire. After she was at the shop for approximately two minutes, the police arrived and asked what she was doing. While she spoke to police, the Defendant looked for the key. She then gave an officer her registration and driver's license. The officer then said he smelled burnt marijuana coming from the Defendant's vehicle.
Brown testified that she never saw the Defendant handle any illegal narcotics while he was with her. She also acknowledged that Dunn did not ask if the drugs he found under the seat of the Defendant's car were hers. Brown testified that the Defendant was in the back of the police car when the drugs were found, and the drugs were found the third time the car was searched. She further testified that police said they would let her go if she wrote a statement.
On cross-examination, Brown was questioned about the drugs as follows:
Q. And, during that questioning, you admitted that you didn't that wasn't your drugs that were in the car, correct?
A. Can I plead the fifth.
Q. During that questioning, at that time, at the time that I questioned you a week or so ago, you said that wasn't it wasn't your drugs, correct? At that time?
A. I plead the fifth.
Q. That's not my question. My question is, at that particular time that I questioned you
. . . .
Q. I'm going to ask you again, and I'm going to get the date so that it's accurate, on August 23, 2007, you testified under oath, correct?
A. Yes.
Q. You raised your right hand and you swore to tell the truth, correct?
A. Yes.
Q. You testified that day?
A. Yes.
Q. You testified that those drugs that were found in that car were not your drugs, correct?
A. It was not ours.
Q. You said, you didn't know anything about those drugs, correct?
A. I didn't know.
Q. What's that?
A. I didn't know.
Q. You didn't know anything about it?
A. No.
Q. Wasn't your drugs, correct?
A. It wasn't ours.
Q. Those drugs were not for you, correct?
A. It wasn't ours.
. . . .
Q. own or possess those drugs.
A. No.
Q. Okay. You didn't even know they were in there?
A. No.
Q. So you can't say who they were for?
A. Yes, I can.
Q. You never [sic] nobody, anybody put them in that car, correct?
A. `Cause I had the car that day.
Q. That day. You didn't put [sic] in that car, right?
A. No.
Q. They weren't for you, correct?
A. It wasn't ours.
Q. You didn't even know it was in there, right?
A. Right.
Q. Okay. So there's no way you can come into court today and say, those drugs were not for Mr. Johnlouis?
A. It wasn't.
*1156 Q. Just because you believe that, because you're his girlfriend?
A. `Cause I know.
Q. How do you know if you didn't see anybody put them in there?
A. It wasn't in there.
Q. You don't want it to be his because you don't want to see him [sic] jail, correct?
A. No.
Q. You don't want to see him in jail, correct? Is that a fair statement?
A. It wasn't his. It wasn't his.
Q. Yes or no? Yes or no? You do not want to see Mr. Johnlouis in jail, yes or no?
A. No response.
. . . .
BY THE WITNESS (MS. BROWN):
No.
On redirect examination, she testified that she knew the Defendant did not put the drugs under the car seat.
Brown also testified that the money found in the Defendant's pocket was not hers and, during the time she knew the Defendant, he did not have a job.
Kevin Ardoin, a forensic chemist employed by the Acadiana Crime Lab, was qualified as an expert in forensic chemistry. Ardoin testified that the material seized from the Defendant's car was 60.4 grams of crack cocaine.
Possession of at Least 28 but Less Than 200 Grams of Cocaine
To support a conviction for possession of at least 28 but less than 200 grams of cocaine, the State had to prove the Defendant was in possession of cocaine in the quantity stated and that he knowingly possessed it. La. R.S. 40:967(F)(1)(a).
"Possession of narcotic drugs can be established by actual physical possession or by constructive possession." State v. Hongo, 06-829, p. 4 (La.App. 3 Cir. 12/6/06), 944 So.2d 856, 859 (quoting State v. Davis, 05-543, p. 5 (La.App. 3 Cir. 12/30/05), 918 So.2d 1186, 1190, writ denied, 06-587 (La.10/13/06), 939 So.2d 372).
The supreme court in State v. Toups, 01-1875, pp. 3-4 (La.10/15/02), 833 So.2d 910, 913, summarized the law on constructive possession as follows:
A person may be in constructive possession of a drug even though it is not in his physical custody, if it is subject to his dominion and control. Also, a person may be deemed to be in joint possession of a drug which is in the physical custody of a companion, if he willfully and knowingly shares with the other the right to control it. . . . Guilty knowledge is an essential ingredient of the crime of unlawful possession of an illegal drug. . . .
State v. Trahan, 425 So.2d 1222 (La. 1983) (citing State v. Smith, 257 La. 1109, 245 So.2d 327, 329 (1971)). However, it is well settled that the mere presence in an area where drugs are located or the mere association with one possessing drugs does not constitute constructive possession. State v. Harris, 94-0970 (La.12/8/94), 647 So.2d 337; State v. Bell, 566 So.2d 959 (La.1990).
A determination of whether there is "possession" sufficient to convict depends on the peculiar facts of each case. Factors to be considered in determining whether a defendant exercised dominion and control sufficient to constitute constructive possession include his knowledge that drugs were in the area, his relationship with the person found to be in actual possession, his access to the area where the drugs were found, evidence of recent drug use, and his physical proximity *1157 to the drugs. State v. Hughes, 587 So.2d 31, 43 (La.App. 2 Cir.1991), writ denied, 590 So.2d 1197 (La.1992); see also Bujol v. Cain, 713 F.2d 112 (5 Cir.1983), cert. denied, 464 U.S. 1049, 104 S.Ct. 726, 79 L.Ed.2d 187 (1984) (listing above factors as well as a sixth factor: "evidence that the area was frequented by drug users").
State v. Jacobs, 08-1068, pp. 3-4 (La.App. 3 Cir. 3/4/09), 6 So.3d 315, 318 (alteration in original). "[S]ince knowledge is a state of mind, it need not be proven as fact, but rather may be inferred from the circumstances." State v. Major, 03-3522, pp. 8-9 (La.12/1/04), 888 So.2d 798, 803 (citation omitted).
In State v. McGraw, 43,778 (La.App. 2 Cir. 12/10/08), 1 So.3d 645, the defendant was convicted of attempted possession of hydrocodone. Police stopped the defendant for making an improper turn at an intersection. The officer took possession of a cup located in the cup holder of the defendant's vehicle and determined that it smelled like alcohol. The officer arrested the defendant for the improper turn and placed him in the patrol car. The officer then searched the driver's side of the vehicle and found marijuana in the driver's door pocket and hydrocodone in the middle console. A search of the defendant revealed five hundred dollars in cash. The passenger was arrested because there was an outstanding warrant for his arrest, and he attempted to dispose of a rock of crack cocaine.
The court noted that because the hydrocodone was not in the actual possession of the defendant or the passenger, the State was required to prove the defendant constructively possessed the pill. The court pointed out that the facts showed the pill was in the middle console of a car owned by the defendant. The console was in arm's reach of the defendant, raising an inference that it was he who had complete control over the pill hidden in his vehicle. Furthermore, the discovery of other drugs in the car and the large sum of cash found on his person lead to an inference of his involvement in illegal drug activity. The evidence showed the defendant had access to the two areas where drugs were found and was in the car with a passenger who was carrying drugs. The court held, based on this evidence, the jury could have reasonably concluded the defendant committed an act tending directly toward the accomplishment of his intent, possession of hydrocodone.
In State v. Ankrum, 573 So.2d 244 (La. App. 1 Cir.1990), the court concluded the evidence was sufficient to support possession of cocaine convictions for all three occupants of a vehicle where cocaine was found. Police received a tip that defendants were in possession of cocaine. The tip described the defendants' vehicle and the general location of the vehicle. The police spotted the vehicle and started following the car in an unmarked police unit. After the rear-seat passenger looked back and apparently recognized the police unit, the car accelerated and ran a stop sign. The officer activated his lights and siren, and a chase ensued during which the driver committed several more traffic violations.
The vehicle was ultimately stopped, and all of the occupants became involved in physical altercations with the police. The car was later searched at the police station where a clear plastic bag containing marijuana was found on the front passenger seat, and a clear bag of rock cocaine was found on the back right floorboard under papers and other debris. The court noted that the cocaine was not cleverly concealed or in any way out of reach of each defendant and that the record supported a finding that all three defendants had constructive *1158 possession of the cocaine. The court affirmed the convictions, concluding that a rational trier of fact could have found beyond a reasonable doubt that each defendant had dominion and control over the cocaine and knowingly possessed it.
The case at bar involves constructive possession, as no one was found in actual possession of the drugs located under the driver's seat of the Defendant's car. Evidence regarding who drove the Defendant's car to Wrench Masters was inconsistent. Brown testified that she drove, and Dunn believed the Defendant drove because the Defendant stated he "brought" Brown to Wrench Masters. Despite this inconsistency, the evidence at trial indicates that 60.4 grams of crack cocaine was found in a car owned by the Defendant. The other occupant of the car, Brown, testified that the drugs did not belong to "us." However, the Defendant had access to the area where the drugs were found whether he drove the car or was a passenger. Additionally, a large of sum of cash was found in the Defendant's pocket, and he did not have a job. Furthermore, the Defendant was nervous during his encounter with Dunn. Based on the testimony presented, a jury could conclude that the Defendant constructively possessed the crack cocaine found inside his car and infer his guilty knowledge from these circumstances. Accordingly, the Defendant's conviction for possession of at least 28 but less than 200 grams of cocaine is affirmed.
Transactions Involving Proceeds from Drug Offenses
The Defendant was also convicted of transactions involving proceeds from drug offenses. Louisiana Revised Statute 40:1041(A) provides that:
It is unlawful for any person knowingly or intentionally to conduct a financial transaction involving proceeds known to be derived from a violation of R.S. 40:966 et seq. when the transaction is designed in whole or in part to conceal or disguise the nature, location, source, ownership, or the control of the proceeds known to be derived from such violation or to avoid a transaction reporting requirement under state or federal law.
The only reported case involving a sufficiency review for this offense is State v. Edwards, 06-850 (La.App. 3 Cir. 6/13/07), 963 So.2d 419. In that case, police received information from confidential informants for approximately ten years that indicated the defendant was transporting drugs from Baton Rouge to New Iberia for street sale. The defendant was the center of an investigation on May 22, 2004, that involved mobile surveillance. The detectives conducting surveillance received information that the defendant had been conducting illegal narcotic activity at an abandoned residence located at 506 Corrine Street. The area was known to have a high rate of drug trafficking.
After the defendant arrived on the scene, two officers witnessed what appeared to be the defendant making narcotics exchanges and watched him store narcotics under a house and in the pipe of a metal clothesline. As officers moved in on the scene, the defendant initially fled but then ran toward an officer, who arrested him.
Approximately three hundred dollars was seized from the defendant's person, but no drugs or weapons were found on him. One officer retrieved plastic bags from inside the metal pipe and from underneath the house, which were tested and determined to both contain crack cocaine.
The defendant was convicted of conducting a financial transaction involving proceeds known to be derived from a violation *1159 of La. R.S. 40:966, et seq. This court reversed the defendant's conviction, finding the following:
The Defendant argues that no evidence was presented by the State to prove that the money confiscated from his person was the result of drug proceeds. The Defendant adds that no controlled buys were conducted, no drugs were seized from his person, no other person was stopped who possessed drugs, and no confidential informants were present at trial. Further, the Defendant maintains that $305.00 is not an unusually large sum of money and does not automatically prove a sale of narcotics.
Detective Davis testified that other than the two transactions he saw which are described above, he had no proof that the money found on the Defendant was from drug proceeds. He further testified that he did not see the other person put drugs in his pocket, nor did he see the Defendant counting out money.
We were unable to find any jurisprudence which has applied this statute to the evidentiary facts of the case. However, because no money was seen changing hands, and because $305.00 is not an unusually large amount of cash, we find that the evidence is insufficient to find the Defendant guilty of this charge. Therefore, we overturn the Defendant's conviction for count two, transaction involving proceeds from a drug offense, in violation of La. R.S. 40:1049.
Id. at 426.
In the case at bar, there was no testimony regarding money changing hands and no testimony regarding the amount of cash on the Defendant's person.[2] Based on the lack of evidence and this court's ruling in Edwards, we find the evidence was insufficient to convict the Defendant of transactions involving proceeds derived from drug offenses.
ASSIGNMENT OF ERROR NUMBER TWO
In his second assignment of error, the Defendant contends the trial court erred in denying his motion to suppress. The Defendant filed a motion to suppress on March 12, 2007. Therein, he sought to suppress all evidence seized by police.
The testimony at trial did not vary greatly from that at the hearing on the motion to suppress. As a result, we will not repeat all the testimony presented at the hearing, but will set forth additional information provided at that time.
Dunn testified that as Brown initially approached him, the Defendant walked toward his own car. Dunn eventually approached the Defendant's car in order to speak to him, and the Defendant was seated in the driver's seat at that time. Upon approaching the Defendant's car, Dunn detected the odor of burnt marijuana. Dunn told the Defendant he smelled burnt marijuana and asked if anyone had been smoking in the car. The Defendant did not respond and became nervous. In his report, Dunn said the Defendant said no one had been smoking.
Dunn patted down the Defendant and removed a bundle of cash from his pocket because he thought it might be a weapon. The Defendant was then handcuffed for the officer's safety and placed in the back of Dunn's patrol car.
Dunn then advised Brown that he smelled burnt marijuana and asked if anyone had been smoking. Brown began crying, which aroused Dunn's suspicions. Dunn then went back to the Defendant *1160 and asked if there was anything inside the car that he needed to know about. The Defendant did not respond. Dunn then searched the Defendant's car.
During the search, Dunn located two cookies of crack cocaine under the driver's seat. The search occurred after the trainee agreed that he smelled burnt marijuana. Dunn further testified that the officers who later responded to the scene agreed that the car smelled of marijuana.
After Dunn found the crack cocaine, he advised the Defendant of his Miranda rights and that he was under arrest. The Defendant continued to remain silent, and Dunn searched the Defendant's person. Inside the Defendant's jacket pockets, Dunn found a "granulated white powdery substance" and a small green leafy substance that he believed was marijuana.
Brown denied crying when Dunn asked if anyone had been smoking marijuana. Brown further testified that the Defendant was handcuffed and placed in back of the patrol car before his vehicle was searched.
Brown testified that the Defendant's vehicle was running, and Dunn turned it off after the Defendant was placed in the patrol car. Additionally, she was ten feet away from the vehicle at that time.
After hearing the evidence presented by the parties, the trial court denied the motion to suppress and stated the following:
All right. Gentlemen, I think that the Officer had a right to stop and investigate the presence of the automobile that night. It was Eleven-thirty (11:30) in a commercial parking lot. He saw people near the vehicles. I think he had a right to stop and investigate what was going on. Once he did that and the Officer testified that the defendant acted suspiciously, that he had a right to first of all, stopping, second of all, questioning as to his presence there, third of all, to frisking if he had any kind of reasonable suspicion that something may be wrong, which he obviously did. And I think he had a right to frisk him and he found a wad of money. The defendant continued, according to his testimony, acting suspiciously and the smell of marijuana. I heard the testimony that the car was running. I think he had a right to go to the car and find out what was going on inside the car.
For all those reasons I find that the Officer acted appropriately and I will deny the motion to suppress.
. . . .
I think he had the right to make the arrest once he found reasonable suspicion and he found the money in his pocket, he smelled the marijuana.
This court discussed the standard applicable to the review of rulings on motions to suppress in State v. Robertson, 06-167, p. 7 (La.App. 3 Cir. 7/16/08), 988 So.2d 294, 300, (quoting State v. Bargeman, 98-617, p. 5 (La.App. 3 Cir. 10/28/98), 721 So.2d 964, 967, writ denied, 99-33 (La.5/28/99), 743 So.2d 658), as follows:
When a trial court rules on a defendant's motion to suppress, the appellate court must look at the totality of the evidence presented at the hearing on the motion to suppress. The appellate court should not overturn a trial court's ruling, unless the trial court's conclusions are not supported by the evidence, or there exists an internal inconsistency in the testimony of the witnesses, or there was a palpable or obvious abuse of discretion. State v. Burkhalter, 428 So.2d 449 (La.1983), and State v. Gaspard, 96-1279 (La.App. 3 Cir. 2/11/98); 709 So.2d 213. The admissibility of evidence seized without a warrant is a question for the trial court. Its conclusions on credibility and the weight of testimony regarding the voluntariness of a consent for admissibility *1161 purposes will not be overturned on appeal, unless the conclusions are unsupported by the evidence. State v. Gachot, 609 So.2d 269 (La.App. 3 Cir. 1992), writ denied, 617 So.2d 1180 (La. 1993), cert. denied, 510 U.S. 980, 114 S.Ct. 478, 126 L.Ed.2d 429 (1993).
In brief to this court, the Defendant asserts that he was arrested when Dunn handcuffed him. In support of this argument, the Defendant cites La.Code Crim.P. art. 201, which defines an arrest as "the taking of one person into custody by another. To constitute an arrest there must be an actual restraint of the person. The restraint may be imposed by force or may result from the submission of the person arrested to the custody of the one arresting him." The Defendant asserts that a valid arrest must be supported by probable cause that a crime occurred, and evidence seized as the result of an invalid arrest is inadmissible as fruit of the poisonous tree.
The Defendant argues that should this court find that the arrest was valid because the search exceeded the scope of a search incidental to a lawful arrest. In support of this argument, the Defendant cites Arizona v. Gant, ___ U.S. ___, 129 S.Ct. 1710, 173 L.Ed.2d 485 (2009). In Gant, the Supreme Court concluded that "circumstances unique to the automobile context justify a search incident to arrest when it is reasonable to believe that evidence of the offense of arrest might be found in the vehicle." Id. at 1714. Gant had been arrested for driving with a suspended license and placed in the back of a patrol car. Officers then searched his vehicle and found cocaine in a jacket in the back seat. Id. In those circumstances, the Court deemed the warrantless search of Gant's vehicle inappropriate because the authorities "could not reasonably have believed" that evidence of the offense for which Gant was arrested might be found in his car. Id. at 1719. Gant is inapplicable to the facts of the case at bar, as is evident from the discussion below.
An arrest occurs when the circumstances indicate intent to affect an extended restraint on the liberty of the accused, rather than at the precise time an officer tells an accused he is under arrest. State v. Gibson, 97-1203 (La. App. 5 Cir. 3/25/98), 708 So.2d 1276. A seizure is an arrest, rather than an investigatory stop, when a reasonable person in the defendant's position would have understood the situation to be a restraint on freedom of movement of the degree that the law associates with a formal arrest. State v. Cojoe, 01-2465 (La.10/25/02), 828 So.2d 1101, citation omitted. However, the use of actual restraint does not, alone, transform a street encounter between the police and a citizen into an arrest because an investigatory stop necessarily "involves an element of force or duress, temporary restraint of a person's freedom to walk away." State v. Broussard, 00-3230 (La.5/24/02), 816 So.2d 1284, 1286, per curiam, (citation omitted).
In State v. Cojoe, supra, the Louisiana Supreme Court explained that there is no specific test to determine whether an encounter is an arrest or investigatory stop:
Although a seizure occurs for Fourth Amendment purposes either when an individual has been subjected to physical restraint or when he submits to the assertion of official authority, California v. Hodari D., 499 U.S. 621, 626, 111 S.Ct. 1547, 1551, 113 L.Ed.2d 690 (1991), no bright-line rule exists for distinguishing between investigatory stops, characterized by brief restraint imposed on a lesser showing of reasonable suspicion, *1162 Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968), from arrests based on probable cause.
Id. at 828 So.2d at 1103.
State v. Smith, 06-557, pp. 6-7 (La.App. 5 Cir. 11/28/06), 947 So.2d 95, 99, writ denied, 06-2960 (La.9/14/07), 963 So.2d 993. "An arrest made without probable cause is illegal and the seizure of evidence pursuant to an illegal arrest is also illegal." State v. Graham, 01-1232, p. 10 (La.App. 5 Cir. 5/29/02), 820 So.2d 1101, 1106, writ denied, 02-1770 (La.12/19/02), 833 So.2d 329.
We need not determine whether the Defendant was under arrest when he was handcuffed and placed in the patrol car, but will instead discuss the search of the Defendant's car.
The Fourth Amendment to the United States Constitution protects "[t]he right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures." U.S. Const. amend. IV. Similarly, the Louisiana Constitution provides that "[e]very person shall be secure in his person, property, communications, houses, papers, and effects against unreasonable searches, seizures, or invasions of privacy." La. Const. art. 1, § 5. A search conducted without a warrant based upon probable cause is per se unreasonable unless the state is able to show that it falls in one of a carefully defined set of exceptions based on the presence of exigent circumstances. Schneckloth v. Bustamonte, 412 U.S. 218, 93 S.Ct. 2041, 36 L.Ed.2d 854 (1973); State v. Long, 2003-2592 (La.9/9/04), 884 So.2d 1176, fn. 6, cert. denied, 544 U.S. 977, 125 S.Ct. 1860, 161 L.Ed.2d 728 (2005).
One exception to the warrant requirement is when there is probable cause to search an automobile. The warrantless search of an automobile is not unreasonable if there is probable cause to justify the search, without proving additional exigency, when the automobile is readily mobile because there is an inherent risk of losing evidence. Maryland v. Dyson, 527 U.S. 465, 119 S.Ct. 2013, 144 L.Ed.2d 442 (1999); United States v. Ross, 456 U.S. 798, 102 S.Ct. 2157, 72 L.Ed.2d 572 (1982); State v. Long, supra. This exception "rests in part on the premise that if the officers may seize a vehicle and immobilize it for however long it takes to secure a warrant they may conduct an immediate search." Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970); State v. Kelley, XXXX-XXXX (La.7/10/06), 934 So.2d 51, cert. denied, 549 U.S. 1065, 127 S.Ct. 691, 166 L.Ed.2d 536 (2006).
Probable cause exists when the facts and circumstances within the arresting officer's knowledge and of which he has reasonable and trustworthy information are sufficient to justify a man of average caution in the belief that the person to be arrested has committed or is committing an offense. LSA-C.Cr.P. art. 213(3); Beck v. Ohio, 379 U.S. 89, 85 S.Ct. 223, 13 L.Ed.2d 142 (1964); State v. Ceaser, XXXX-XXXX (La.10/21/03), 859 So.2d 639; State v. Morris, 38,928 (La. App. 2d Cir.9/22/04), 882 So.2d 1221.
State v. Brown, 42,188, 42,189, 42,190, pp. 20-22 (La.App. 2 Cir. 9/26/07), 966 So.2d 727, 746-47, writ denied, 07-2199 (La.4/18/08), 978 So.2d 347 (alteration in original).
In State v. Garcia, 519 So.2d 788 (La. App. 1 Cir.1987), writ denied by State v. Rodriguez, 530 So.2d 85 (La.1988), police stopped the defendant for a traffic violation and detected the odor of marijuana coming from the back of the truck. The court found the odor of marijuana gave the officer probable cause to believe the truck *1163 contained contraband, and the movable nature of the truck supplied the exigent circumstances to search the truck without a warrant.
In State v. Paggett, 28,843, p. 4 (La.App. 2 Cir. 12/11/96), 684 So.2d 1072, 1074, the court found the odor of marijuana on the defendant "alone justified a warrantless search of the vehicle under exigent circumstances."
In State v. Williams, 38,379, pp. 3-4 (La.App. 2 Cir. 11/25/03), 858 So.2d 878, 880-81, writ denied, 03-3535 (La.3/12/04), 869 So.2d 807, the court stated:
A state trooper's detection of the odor of marijuana coming from a defendant's car constitutes justification for a warrantless search. State v. Cohen, 549 So.2d 884 (La.App. 2d Cir.1989), writ denied, 559 So.2d 135 (La.1990). A police officer who makes a valid traffic stop of the defendant's vehicle has probable cause to search, based upon the faint odor of marijuana which someone was trying to mask by using air fresheners. State v. Reynaga, 93-1520 (La.App. 3d Cir.10/05/94), 643 So.2d 431. (The court also held that the search was valid based on probable cause, even if consent was not given.) Even a routine registration check, which led to a state trooper's detection of the odor of marijuana, resulted in sufficient probable cause to make a warrantless search and seizure valid. State v. Arnold, 34,194 (La. App.2d Cir.12/06/00), 779 So.2d 840.
Based on the cases cited herein, we find that Dunn's detection of the odor of burnt marijuana emanating from the Defendant's vehicle provided probable cause for the search of his vehicle. Accordingly, even if the Defendant had been illegally detained when he was handcuffed and placed in the patrol car, the search of his vehicle was not conducted pursuant to the illegal detention. Dunn had probable cause to search the Defendant's car upon smelling the odor of burnt marijuana, which occurred before the Defendant was handcuffed and placed in the patrol car. Therefore, this assignment of error lacks merit.
ASSIGNMENT OF ERROR NUMBER THREE
In his third assignment of error, the Defendant contends the sentences imposed are excessive for this offender and these offenses. The Defendant asserts the trial court indicated he sold drugs for a living and was involved in drug sales at the time of his arrest. The Defendant asserts no evidence was introduced to support the State's allegation that he sold drugs for a living or that he was doing so on the night of his arrest. Further, the Defendant asserts the trial court failed to adequately consider the length of the sentences imposed amounts to a life sentence.
The Defendant did not object to the sentences at the time they were imposed nor did he file a motion to reconsider sentence.
This court has reviewed claims of excessiveness where no objection was made and no motion to reconsider sentence was filed. See State v. Thomas, 08-1358 (La.App. 3 Cir. 5/6/09), 18 So.3d 127; State v. Perry, 08-1304 (La.App. 3 Cir. 5/6/09), 9 So.3d 342; State v. H.J.L., 08-823 (La.App. 3 Cir. 12/10/08), 999 So.2d 338. Accordingly, we will review the Defendant's claim as a bare claim of excessiveness. However, we will not consider the other claims asserted by the Defendant.
This court discussed the standard of review applicable to claims of excessiveness in State v. Bailey, 07-130, p. 3 (La. App. 3 Cir. 10/3/07), 968 So.2d 247, 250 (alteration in original), as follows:
*1164 A sentence which falls within the statutory limits may be excessive under certain circumstances. To constitute an excessive sentence, this Court must find that the penalty is so grossly disproportionate to the severity of the crime as to shock our sense of justice or that the sentence makes no reasonable contribution to acceptable penal goals and[,] therefore, is nothing more than the needless imposition of pain and suffering. The trial judge has broad discretion, and a reviewing court may not set sentences aside absent a manifest abuse of discretion.
State v. Guzman, 99-1753, 99-1528, p. 15 (La.5/16/00), 769 So.2d 1158, 1167 (citations omitted).
In State v. Smith, 02-719, p. 4 (La. App. 3 Cir. 2/12/03), 846 So.2d 786, 789, writ denied, 03-562 (La.5/30/03), 845 So.2d 1061 (citations omitted), this court discussed the factors it would consider in order to determine whether a sentence shocks the sense of justice or makes no meaningful contribution to acceptable penal goals:
In deciding whether a sentence is shocking or makes no meaningful contribution to acceptable penal goals, an appellate court may consider several factors including the nature of the offense, the circumstances of the offender, the legislative purpose behind the punishment and a comparison of the sentences imposed for similar crimes. While a comparison of sentences imposed for similar crimes may provide some insight, "it is well settled that sentences must be individualized to the particular offender and to the particular offense committed." Additionally, it is within the purview of the trial court to particularize the sentence because the trial judge "remains in the best position to assess the aggravating and mitigating circumstances presented by each case."
The Defendant was convicted of possession of more than 28 but less than 200 grams of cocaine and adjudicated a second felony offender. Pursuant to La. R.S. 40:967 and La. R.S. 15:529.1, the offense carries a sentence of imprisonment at hard labor from fifteen to sixty years. The Defendant was sentenced to serve fifty years at hard labor.
Regarding the factors mentioned in Bailey, the parties stipulated that the Defendant had been previously convicted of drug racketeering. The State also informed the trial court that the Defendant was on parole at the time he was arrested for the offenses at issue herein.
The trial court sentenced the Defendant and noted the following:
Mr. Johnlouis, in imposing this sentence I've taken into consideration Article 895, the sentencing guidelines. I find that you were engaged as the jury did in illegal conduct, knowingly and intentionally, that you were selling cocaine for a profit and that was I guess your major business enterprise or your major way of making a living. Having heard that you were on parole at the time that you did this it indicates strongly to the Court that any kind of lesser sentence would not be appropriate and certainly any period of probation or suspension of sentence would not succeed, because you had an opportunity to do that and you missed that opportunity. You didn't take advantage of that opportunity. The Court finds that any lesser sentence would deprecate the seriousness of the offense and that any lesser sentence would not change the way that you have lived your life in the recent past.
In State v. Allen, 93-838 (La.App. 5 Cir. 5/31/94), 638 So.2d 394, writ granted, 94-1754 (La.11/29/94), 646 So.2d 390, writ recalled, 94-1754 (La.3/16/95), 651 So.2d *1165 1343, the court found a sentence of twenty years was not excessive for a second felony offender convicted for possession of at least 28 but not more than 200 grams of cocaine.[3]
Although, to some, the sentence received by the Defendant in the case at bar appears to be excessive in light of the case cited herein, the court notes the Defendant was on parole at the time he committed the offense at issue. Thus, this court finds the Defendant's sentence for possession of at least 28 but not more than 200 grams of cocaine is not excessive.
CONCLUSION
The Defendant's conviction for possession at least 28 but less than 200 grams of cocaine and adjudication as an habitual offender is affirmed. His sentence for that offense is amended to delete the fine provision, and the trial court is instructed to make an entry in the minutes of court to reflect the amendment. The Defendant's conviction and sentence for transactions involving proceeds derived from drugs transactions is vacated and set aside.
CONVICTION FOR POSSESSION OF COCAINE AFFIRMED; SENTENCE FOR POSSESSION OF COCAINE AMENDED; CONVICTION FOR TRANSACTIONS INVOLVING PROCEEDS FROM DRUG TRANSACTIONS SET ASIDE AND VACATED; REMANDED WITH INSTRUCTIONS.
NOTES
[1] This offense occurred before those at issue in the case at bar.
[2] A photograph of the cash was admitted into evidence as State's Exhibit 2 and there was well in excess of $1,000.00 dollars. The actual cash was published to the jury.
[3] The supreme court granted certiorari to review the issue of the trial court's requiring the parties to alternate in their exercise of peremptory challenges. However, the defendant did not object to the procedure; therefore, the court recalled the writ of certiorari as improvidently granted. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558727/ | 22 So.3d 240 (2009)
STATE of Louisiana, Appellee
v.
Roderick CLARK, Appellant.
No. 44,612-KA.
Court of Appeal of Louisiana, Second Circuit.
September 23, 2009.
*241 G. Paul Marx, Louisiana Appellate Project, Lafayette, for Appellant.
*242 Charles R. Scott, II, District Attorney, Suzanne Morelock Owen, Geya D. Williams Prudhomme, Natalie Howell, Assistant District Attorneys, for Appellee.
Before STEWART, CARAWAY and LOLLEY, JJ.
LOLLEY, J.
This criminal appeal arises from the First Judicial District Court, Parish of Caddo, State of Louisiana. The defendant, Roderick Clark, was convicted by a jury of aggravated battery, a violation of La. R.S. 14:34. He was sentenced to 7 ½ years of imprisonment at hard labor. Clark now appeals. For the following reasons, the conviction and sentence are affirmed.
FACTS
On April 27, 2007, Johnny and Ruth Clark were at their home in Shreveport, Louisiana when the Clarks' eldest son, defendant, Roderick Clark showed up at their home. Johnny went outside to speak with Clark after he heard Clark hitting the side of the house. Clark said that he needed to come inside to use the restroom and Johnny allowed his son to come into the house. Clark had gotten into an argument with his father several days prior and this was the first time Johnny and Ruth had heard from the defendant.
After exiting the bathroom, Clark walked into the dining area to open his mail. Clark received mail at his parents home and occasionally resided there. He picked up a knife to open his mail. Although Johnny and Ruth's testimony of the sequence of events differed slightly, it is clear that at some point Clark was holding a knife and walking towards Ruth. Johnny retrieved a dining room chair to distract his son and told him to leave. Ruth was able to run out of the house and had a neighbor call the police. The police arrived, eventually arresting Clark. Johnny suffered several injuries and was taken to the hospital.
On May 16, 2007, the defendant was charged with aggravated battery. A hearing on the issue of Clark's sanity was held September 17, 2007, where he was found competent to proceed. On August 28, 2008, after a trial by jury, the defendant was convicted as charged of aggravated battery. The defendant was sentenced to 7 ½ years of imprisonment at hard labor. This appeal followed.
LAW AND DISCUSSION
Sufficiency of the Evidence
Clark argues that the evidence is insufficient to prove the charge as stated in the bill of information. Specifically, Clark contends that the testimony adduced at trial shows that the defendant had a "stick" or piece of a chair in his hand when officers arrived, but not a knife.
The standard of appellate review for a sufficiency of the evidence claim is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime proven beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979); State v. Tate, XXXX-XXXX (La.05/20/03), 851 So.2d 921, cert. denied, 541 U.S. 905, 124 S.Ct. 1604, 158 L.Ed.2d 248 (2004); State v. Carter, 42,894 (La.App. 2d Cir.01/09/08), 974 So.2d 181, writ denied, XXXX-XXXX (La. 11/14/08), 996 So.2d 1086. This standard, now legislatively embodied in La. C. Cr. P. art. 821, does not provide the appellate court with a vehicle to substitute its own appreciation of the evidence for that of the fact finder. State v. Pigford, XXXX-XXXX (La.02/22/06), 922 So.2d 517; State v. Dotie, 43,819 (La. App. 2d Cir.01/14/09), 1 So.3d 833. The *243 appellate court does not assess the credibility of witnesses or reweigh evidence. State v. Smith, XXXX-XXXX (La.10/16/95), 661 So.2d 442. A reviewing court accords great deference to a jury's decision to accept or reject the testimony of a witness in whole or in part. State v. Hill, 42,025 (La.App. 2d Cir.05/09/07), 956 So.2d 758, writ denied, XXXX-XXXX (La.12/14/07), 970 So.2d 529.
The Jackson standard is applicable in cases involving both direct and circumstantial evidence. An appellate court reviewing the sufficiency of evidence in such cases must resolve any conflict in the direct evidence by viewing that evidence in the light most favorable to the prosecution. When the direct evidence is thus viewed, the facts established by the direct evidence and inferred from the circumstances established by that evidence must be sufficient for a rational trier of fact to conclude beyond a reasonable doubt that defendant was guilty of every essential element of the crime. State v. Sutton, 436 So.2d 471 (La.1983); State v. Speed, 43,786 (La.App. 2d Cir.01/14/09), 2 So.3d 582; State v. Parker, 42,311 (La.App. 2d Cir.08/15/07), 963 So.2d 497, writ denied, 2007-2053 (La.03/07/08), 977 So.2d 896.
In order to convict the defendant of aggravated battery, the state must prove that the defendant intentionally used force or violence upon the victim, that the force or violence was inflicted with a dangerous weapon and that the dangerous weapon was an instrumentality used in a manner likely or calculated to cause death or great bodily harm. State v. McGee, 37,919 (La. App. 2d Cir.12/10/03), 862 So.2d 452.
Where there is conflicting testimony about factual matters, the resolution of which depends upon a determination of the credibility of the witnesses, the matter is one of the weight of the evidence, not its sufficiency. State v. Speed, supra; State v. Allen, 36,180 (La.App. 2d Cir.09/18/02), 828 So.2d 622, writs denied, 2002-2595 (La.03/28/03), 840 So.2d 566, 2002-2997 (La.06/27/03), 847 So.2d 1255, cert. denied, 540 U.S. 1185, 124 S.Ct. 1404, 158 L.Ed.2d 90 (2004).
Shreveport Police Corporal Benny Samuel was the first responding officer and testified at trial. As Cpl. Samuel approached the Clarks' residence, he could hear a commotion and saw Ruth standing on the front porch. A second officer arrived, and Ruth warned both officers that her son had a knife. As Ruth and the two officers entered the home, Cpl. Samuels saw Clark hitting his father on the head with a broken piece of a chair. Corporal Samuels also noticed that the room was in disarray and that a broken knife was on the floor. At trial, Cpl. Samuels described the knife as a kitchen or steak knife that was broken in half and had blood on it.
Officer Angie Wilhite of the Shreveport Police Department was the second responding officer at the scene. She observed that Ruth appeared to be nervous and that the sounds of an altercation could be heard from outside. Upon entering the home, Officer Wilhite saw the defendant hitting his father with a "stick." She used her taser gun on the defendant, then handcuffed him. Officer Wilhite saw an injury under the victim's left eye, as well as lacerations to the top of his head. Officer Wilhite recovered two knives from the scene, and she too testified that one of the knives was broken and had some blood on the blade.
Shreveport Police Detective Jeff Brown also testified at trial, describing Ruth as upset and crying. Detective Brown observed broken furniture, blood, and knives scattered about and testified that Johnny's face was disfigured and bloody.
*244 Here, the record does reflect that Clark was seen by officers beating his father with a chair leg. However, the record also established that Clark physically approached his parents in a threatening fashion with knives earlier during the sequence of events. Johnny testified that when Clark approached him with the first knife, the knife Clark used to open his mail, he and Clark struggled for some time, and eventually Johnny got the knife away. Next, Johnny explained, Clark went back towards the kitchen and grabbed a butcher knife and then acted as though he was going to attack his mother. At some point after grabbing the dining room chair, Johnny lost consciousness while being attacked. There were no other witnesses to refute Clark's use of a knife to inflict the wounds on his father. Ruth also testified that she ran from the house as Clark approached her with a knife.
In addition to the above testimony, direct evidence also established that Clark struck the victim, which Clark does not refute. Johnny's injuries included a deep cut to his face which required stitches as well as wounds to his head which were consistent with wounds inflicted with a knife. In addition, contrary to what Clark asserts, two knives were recovered at the scene, one with blood on the blade.
The record establishes that Clark had initially been armed with a knife, and the evidence supports a jury's conclusion that Clark used a knife to cut the victim and was guilty beyond a reasonable doubt of every essential element of aggravated battery as set forth by the bill of information. This assignment is therefore without merit.
Hearsay
In his second assignment of error, Clark argues that the trial court erred in that it continually, and over objection, allowed the state to offer hearsay statements. Specifically, Clark argues that the trial court erred in allowing police officers to recall what Ruth had said to them, after Ruth had already testified. Clark also argues that the trial court should not have allowed Det. Brown to recount Off. Angie Wilhite's statements.
Hearsay is a "statement, other than one made by the declarant while testifying at the present trial or hearing, offered in evidence to prove the truth of the matter asserted." La. C.E. art. 801(c). Generally, such out-of-court statements are inadmissible. La. C.E. art. 802; State v. Logan, 36,042 (La.App. 2d Cir.06/14/02), 822 So.2d 657, writ denied, 2002-2174 (La.09/19/03), 853 So.2d 621. Hearsay evidence may be admissible under the exceptions provided by the Code of Evidence or other legislation, however. La. C.E. art. 802; State v. Zeigler, 40,673 (La.App. 2d Cir.01/25/06), 920 So.2d 949. If a statement is not introduced to prove the truth of the matter asserted, then that statement, by definition, is not hearsay. State v. Tate, 25,765 (La.App. 2d Cir.02/23/94), 632 So.2d 1213, writ denied, XXXX-XXXX (La.08/23/96), 678 So.2d 33.
When an investigating officer testifies concerning events which lead to the arrest of a defendant, statements made to the officer during the course of the investigation are not hearsay, if they are merely offered to explain the officer's actions. State v. Zeigler, supra. A trial court's error in admitting evidence of a testifying police officer, when such testimony arguably contains hearsay, is subject to the harmless error analysis. Id. The reviewing court must find the verdict actually rendered by this jury was surely unattributable to the error. State v. Johnson, XXXX-XXXX (La.11/27/95), 664 So.2d 94; Sullivan v. Louisiana, 508 U.S. 275, 279, *245 113 S.Ct. 2078, 2081, 124 L.Ed.2d 182 (1993).
The three testifying officers related that Ruth had been standing outside of the residence, and had informed them that the defendant, her son, was inside attacking his father with a knife. The statement by Ruth explained the officers' entry of the residence, in order to investigate the disturbance. State v. Zeigler, supra. Detective Brown testified as to Ruth's recounting of events, as well as information related to him by Off. Wilhite, when he arrived at the scene. Detective Brown's testimony explained his understanding of the events that had transpired, and subsequent investigation of the scene and was, therefore not, hearsay.[1]
Nevertheless, even if the trial court erred in admitting the testimony, reversal is mandated only when there is a reasonable possibility that the hearsay evidence might have contributed to the verdict.[2]Id. In the instant case, a review of the record clearly shows that there was sufficient evidence to support Clark's conviction, even without consideration of the questioned testimony. The officer's testimony was harmless error, if anything, in that it placed unnecessary emphasis on the fact that knives were involved, which Ruth herself repeatedly identified throughout her testimony. Omission of Ruth's statements to police, and of Det. Wilhite's statements to Det. Brown, surely would still have resulted in sufficient evidence to convict. As discussed above, direct evidence of the defendant's actions, combined with the physical evidence were sufficient to support the jury's finding that the defendant was guilty as charged. Therefore, this assignment is without error.
Exclusion of Evidence
In his last assignment of error, Clark argues that the trial court erred in preventing Clark from introducing evidence that the family was unreasonably afraid of him, which led his father to attack. Clark asserts that he wanted merely to show that the family was overwrought and fearful because of past difficulties and that the family overreacted to Clark's actions at the time of the offense.
A defendant has the right to present any and all relevant evidence bearing on his innocence unless prohibited by our federal and state constitutions, by law, or by jurisprudence. State v. Harrison, 560 So.2d 450 (La.App. 2d Cir.1990). To be admissible, the evidence must be relevant to an issue material in the case. A material issue is one which is of consequence or importance to the case. Relevant evidence is that tending to show the commission of the offense and the intent, or tending to negate the commission of the offense and the intent. Id.; La. C.E. arts. 401, 402. Louisiana C.E. art. 103 provides in pertinent part that: "[e]rror may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected, and ... [w]hen the ruling is one excluding evidence, *246 the substance of the evidence was made known to the court by counsel."
The evidence was excluded by the trial court on the basis of Clark's failure to provide notice of a defense based upon mental condition, pursuant to La. C. Cr. P. art. 726. However, the substance of the testimony that Clark attempts to elicit was not proffered and therefore cannot be reviewed by this court. See McLean v. Hunter, 495 So.2d 1298 (La.1986). Nonetheless, from the record, and as Clark has argued in brief, we can deduce that the evidence would have only shed light on the victim's state of mind. As such, the evidence was not relevant to either Clark's commission of the offense or his intent. Because the evidence was irrelevant, the trial court did not err in disallowing its admission. Accordingly, this assignment has no merit.
CONCLUSION
For the foregoing reasons, Roderick Clark's conviction and sentence are affirmed.
AFFIRMED.
CARAWAY, J., concurs and assigns reasons.
CARAWAY, J., concurring.
While I concur in the ruling, I write to make clear that the defense objections to the hearsay statements of Ruth Clark's were improperly overruled. "Generally, an explanation of the officer's actions should never be an acceptable basis upon which to admit an out-of-court declaration when the so-called `explanation' involves a direct assertion of criminal activity against the accused." State v. Hearold, 603 So.2d 731, 737 (La.1992). However, from the direct testimony of Ruth Clark and the overwhelming circumstantial evidence, it was more than sufficiently established that a knife was used in the battery so that the admission of the hearsay evidence was harmless error.
NOTES
[1] We also point out that when the police arrived, the crime was ongoing according to the statements made by Ruth to the officers and could arguably fulfill the res gestae exception under La. C.E. art. 803(C)(4).
[2] We note that in Zeigler, after overruling the hearsay objection, the trial court instructed the jury that the officer's testimony "was not to be accepted as to the truth of the declaration." Zeigler, 920 So.2d at 954. Here, the trial court did not caution the jury. Furthermore, we are mindful of our reliance on Zeigler, as we do not suggest that all witness' statements can overcome the hearsay objection. See e.g., State v. Hearold, 603 So.2d 731 (La.1992) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558728/ | 644 F.Supp. 208 (1986)
Raymond CROTEAU and Henry Fortier
v.
OLIN CORPORATION.
No. 82-87, 88-L.
United States District Court, D. New Hampshire.
September 16, 1986.
*209 Arnold P. Hanson, Bergeron & Hanson, Berlin, N.H., Kenneth C. and Stanley M. Brown, Manchester, N.H., for Croteau and Fortier.
Howard Meyers, Myers & Laufer, Concord, N.H., for Olin Corp.
MEMORANDUM ORDER
LOUGHLIN, District Judge.
On November 2, 1977 three young men went on a hunting trip which had a tragic ending.
The preceding evening they had slept in a camper and early on the morning of November 2, 1977 they ate breakfast and made preparations to hunt. They checked and loaded their weapons.
Henry Fortier, Paul Croteau and Raymond Croteau were in the area of Kilkenny Route in northern New Hampshire approximately 13 miles in a desolate area, without dwellings.
The road being traversed was about 18 feet wide. The three hunted in the morning, spread out apparently parallel to the service road.
Around 10 or 10:30 a.m. the nimrods, not having any success, met on the service road and discussed returning to the camper some distance down the road in order to have lunch. They estimated that they were within 20 to 30 minutes walking distance from the camper.
In the rear was Paul Croteau. To his immediate front and approximately seven feet in front of him was Raymond Croteau. Raymond Croteau was to Paul Croteau's right. Immediately in front of Raymond Croteau about another seven feet in distance was Henry Fortier. Fortier was also to the right of Paul Croteau and approximately fourteen feet from him.
Paul Croteau is left-handed, then weighed about 185 pounds and was carrying a Winchester 94 "66 Centennial" rifle. He stumbled, fell, his left arm releasing the Winchester. Falling forward approximately five feet, his right hand clutching the gun, he struck the road which was hard. The weapon discharged. The bullet was propelled forward on a horizontal level. The bullet entered Raymond Croteau's left foot about an inch or two from the bottom of the foot.
The bullet exited and at about the same trajectory entered the right foot of Henry Fortier finally coming to rest at his fourth metatarsal head.
Henry Fortier heard Raymond Croteau scream. He then realized that he had also been shot.
Raymond Croteau was bleeding profusely. Paul Croteau, the only one of the trio who was uninjured ran down the road to get help. After running awhile he was able to get the attention of a man with a pickup truck. They drove back to the accident scene, and loaded Raymond and Henry in the rear of the pickup truck. They first went to a fish hatchery, applied a pressure bandage to Raymond's foot and then drove to the Androscoggin Hospital in Berlin, New Hampshire.
Liability
Plaintiffs have brought an action in strict liability and negligence. The rifle *210 involved is a Winchester Lever Action Model 94, 30 caliber rifle manufactured and sold by defendant in 1966. It was purchased by Paul Croteau's brother, Maurice Croteau on August 1, 1977. It was in good condition on the date of the accident.
Robert Vashaw, a hunting safety instructor had instructed Paul Croteau about the safe manner of handling the weapon. Vashaw's instructions were to carry the rifle with the finger level slightly open so brass could be seen and on half cock. Both plaintiffs had also taken Vashaw's safety course.
The weapon must be operated by hand to either load or unload it. There is a loading port on the right side of the rifle.
After ejecting a cartridge, the lever action must be fully closed and locked before starting the next cycle.
At the time of the incident, Paul Croteau carried the weapon with a live cartridge in the chamber. The hammer was in half cock, finger lever opened an inch or an inch and a half.
The locking bolt disengaged and the safety catch on the trigger was engaged.
The court finds that as Paul Croteau struck the ground, the rifle fired. The firing of the weapon was caused by "inertia firing". The forward motion of the rifle immediately stopped as it hit the ground.
This caused inertia firing by the firing pin. The cartridge casing ruptured. The ruptured cartridge casing evidenced the fact that neither the trigger or the hammer were involved in the firing. The weapon was not locked when the cartridge was fired. The lever was partly open, the locking bolt down which prevented the hammer from impacting the firing pin. The safety catch on the trigger was engaged as the finger lever was not squeezed against the lower tang.
The firing pin was too heavy; it carried forward by its own inertia causing the weapon to fire. A lighter firing pin which was later used would have obviated this problem. This was known, or should have been known or foreseeable by the defendant prior to the accident. Winchester was aware of the hazard of "inertia firing" many years prior to the accident of November 2, 1977.
In its advertisements it was stated "all guns with plain trigger are provided with an attachment which renders premature explosion of the cartridge, even from carelessness, absolutely impossible." The aforesaid are excerpts from a Winchester 1882 catalogue. On or about August 25, 1976 in changing component nomenclature, safety catch was deleted. "Trigger Stop" was "Safety Catch."
The defendant, in the 1950's modified the half cock position of the Model 94 which was known to be hazardous. Defendant never notified owners and users of Model 94's not equipped with the Romer modification to submit the weapons for retro-fit or recall.
Defendant did not during the period it operated the Winchester Repeating Arms Company warn its purchasers that its large free floating firing pin constituted a hazard.
The defendant was aware of the hazards and knew, or should have known, that the Model 94 Winchester rifle, and from experience the "Centennial 66" version of the 94, is unreasonably dangerous. It is also true that the Winchester rifle is the most popular one used for deer hunting.
The defendant also had knowledge prior to the accident of the problem of "inertia firing" and that this accident was foreseeable. This was also denied by the defendant in response to interrogatories filed by the plaintiff.
It was stated that it never had a Consumer or Product Safety Committee. Without question, there was such a committee which was extant at sometime during the middle 1970's. Further, the committee was aware of the danger of someone falling on his weapon as Paul Croteau did.
On November 4, 1976, J.P. Jarvis, Director of Engineering for the defendant at that time gave cost figures for adding an additional safety to the M/94. The defendant was also aware, due to a reference to "Do you Really Know Guns?" by Walter J. *211 Howe of the problem of "inertia firing". This has also been referred to as "slam firing".
Another representative of the defendant, Mr. Van Wilgen was aware of an accidental firing in 1976 in which a person was killed. Van Wilgen conducted slam firing by slamming the lever closed to investigate that accident.
The accidental firing by firing pin inertia when the action was closed when the gun struck the ground proximately caused the weapon to fire. Corso v. Merrill, 119 N.H. 647, 466 A.2d 300. Bosse v. Litton Unit Handling Systems, Inc., 646 F.2d 689 (1st Cir.1981). As this is a diversity case, the law of New Hampshire applies. Premium Management, Inc. v. Walker, et al., 648 F.2d 778 (1st Cir.1981).
The court finds that both plaintiffs should recover on the action in strict liability. Thibault v. Sears, Roebuck Co., 118 N.H. 802, 395 A.2d 843 (1978).
There was a defect in the Model 94 Centennial "66" rifle used by Paul Croteau on November 2, 1977 which made the weapon unreasonably dangerous to the plaintiffs. The defect existed at the time it left the defendant's control and there was not any substantial change in the gun at the time of the accident.
In a strict liability case alleging defective design, the plaintiff must first prove the existence of a "defective condition unreasonably dangerous to the user." Buttrick v. Lessard, 110 N.H. at 38-39 [260 A.2d 111].
Thibault, at 897, 395 A.2d 843.
The plaintiff in a defective design case must also prove causation and foreseeability. He must show that the unreasonably dangerous condition existed when the product was purchased, McLaughlin v. Sears, Roebuck & Co., 111 N.H. at 267, 281 A.2d at 588, and that the dangerous condition caused the injury. W. Prosser, The Law of Torts § 41 (4th ed. 1971). The plaintiff must further prove that the purpose and manner of his use of the product was foreseeable by the manufacturer. This requirement is predicated on the manufacturer's duty to design his product reasonably safely for the uses which he can foresee. Foreseeability of use, however, extends beyond the consumer's actual use of the product.... A manufacturer "is not obliged to design the safest possible product, or one as safe as others make or a safer product than the only one he has designed, so long as the design he has adopted is reasonably safe." Mitchell v. Ford Motor Co., 533 F.2d 19, 20 (1st Cir.1976).
Thibault, at 809, 395 A.2d 843.
Strict liability is not a no-fault system of compensation. Thibault at 806, 395 A.2d 843.
Product misuse was not a superseding cause of the accident. In the usual case, no reason of the law stands to prevent a defendant in a products liability action from arguing a third person's negligence or misuse of the product as the sole proximate cause of the plaintiff's injury. Reid v. Spadone Machinery Co., 119 N.H. 457, 465, 404 A.2d 1094 (1979). See also Murray v. Bullard Co., 110 N.H. 220, 223, 265 A.2d 309 (1970).
A manufacturer is not an insurer of his product. The New Hampshire Supreme Court in Thibault, at 807, 395 A.2d 893, stated we recognize some limits to the doctrine of strict liability. See Bolduc v. Herbert Schneider Corp., 117 N.H. 566, 374 A.2d 1187 (1977).
The burden of proof is on the defendant to prove plaintiff's misconduct. Strict liability is a judicially created doctrine to which the principle of comparative causation will be applied. Thibault, at 810. It is called plaintiff's misconduct. This case involves counts in strict liability and negligence. This is an affirmative defense i.e. misconduct of the plaintiff, Thibault, at 813, 395 A.2d 893. Regardless of the nuances of the Thibault opinion on plaintiffs' misconduct, the defendant has failed to prove that either Henry Fortier or Raymond Croteau's actions were plaintiffs' misconduct.
The court also rules that the firing pin was the proximate cause of the plaintiffs' injuries and this negligence caused the injuries *212 to the plaintiff and the resultant damages, Corso v. Merrill, 119 N.H. 647, 406 A.2d 300; further, that there was a failure to warn of the dangerous propensities of the weapon.
Damages
Relative to damages, in order to eschew confusion, the court will initially refer to the damages of Henry Fortier. He has a life expectancy of 47.2 years. Walker v. Walker, 106 N.H. 282, 288, 210 A.2d 468 (1965).
Henry had a bullet fragment removed by Dr. Paul Smith on the date of the accident. In all he had four operations which also included skin grafting. He was in a cast for two weeks and then on crutches for a period of time. Due to recurrent pain, he was readmitted to the hospital, more lead was removed, debridement and skin grafts were performed. There were fractures of his third metatarsal and there were and probably still are foreign bodies in the mid-metatarsal region of his foot.
Approximately a year later a bullet fragment was surgically removed and a skin graft applied to cover the wound.
The wound was abscessed around the foreign body and was drained. As a result of his wound, Henry has a slight limp. He also has increased sensitivity in the foot, flexing problems and nerve damage. The left foot was severely injured. The court viewed Henry's foot and even to the lay person it is apparent that it is badly scarred.
Henry is now working at Bass Shoe, but during the day he is bothered by pain in his foot. His disability limits his activities in participating in winter sports. The foot is also bothered by cold weather. He has to be extra careful not to irritate or bruise the foot because of its propensity to ulcerate or get infected.
His hospital, medical and doctor bills total $7,708.61. The court finds that on the medical evidence presented that Henry has a ten percent (10%) permanent partial disability of his foot.
With regard to Raymond Croteau, as heretofore stated the bullet entered one side of his foot and exited or came out of the medial side of the same foot and then struck Henry Fortier. The wound was so large that as Dr. Smith testified he was able to put a clinched fist through one side and out the other side after he cleansed the wound.
Raymond was hospitalized for three weeks and had many operations including skin grafting as he had two open wounds on his foot. He was rehospitalized for different periods in 1978 for infections, ulcers and skin grafts and for another period in December, 1977.
He joined the Navy and was hospitalized because of exacerbation of the foot wound and eventually received a medical discharge.
Eventually, a portion of his 5th metatarsal area of his foot was removed by Dr. H. Taylor Caswell, Jr.
Dr. Paul Smith on November 2, 1977 attended and operated on both Raymond and Henry. He was their attending physician for sometime thereafter.
In 1978, Raymond had frequent treatments for ulcerations of his foot. At the time of the accident he was in his first year of high school and for the next two years he was limited in participation in sports and school functions.
Raymond is presently residing in Littleton, New Hampshire and he is employed as a machinist. His employment entails a great deal of standing. His employer is solicitous and he is allowed to rest his foot. He does have problems when he works because of weight bearing disabilities with his injured foot.
He is chronically bothered with blisters and resultant infections. Doctor Kenneth Danielson took care of Raymond by debriding the tissue which became ulcerous. He developed hammer-toe deformities in the fourth and third metatarsal.
Raymond Croteau has a life expectancy of 48.1 years.
Medical bills totaled $14,313.95. Lost wages amounted to $1,716.24. The total is $16,030.19.
*213 Raymond is also severely restricted as far as recreational activities are concerned. His foot is very sensitive to pain and the risk of infection. There are still parts of bullet fragments in the foot. Doctor Caswell, in testifying, did describe Raymond's foot as that of a seventy-two year old individual. Dr. Caswell is an orthopedic surgeon.
The court finds that Raymond Croteau has suffered a forty percent (40%) permanent partial disability of the lower left extremity.
A plaintiff is entitled to fair compensation by a verdict which is not niggardly. Jolicoeur v. Conrad, 106 N.H. 496, 500 (1965).
. . . . .
In a case of tort ... the general purpose of compensation is to give a sum of money to the person wronged which as nearly as possible, will restore him to the position he would be in if the wrong had not been committed.
Emery v. Caledonia Sand-Gravel Co. Inc., 117 N.H. 441, 447, 374 A.2d 929 (1977).
"Pain and suffering is a very material element of damages in tort cases." Duguay v. Gelinas, 104 N.H. 182, 185, 182 A.2d 451 (1962).
"It is more probable than otherwise that both of the plaintiffs will suffer future pain and suffering." Plume v. Couillard, 104 N.H. 267, 269, 184 A.2d 452 (1962).
The court does not find that the defendant acted in an intentional, wilful wanton oppressive and malicious manner so as to entitle the plaintiffs to punitive or exemplary damages. Vratsenes v. N.H. Auto, 112 N.H. 71, 289 A.2d 66 (1972).
The court finds that in the case of Raymond Croteau that it is more probable than otherwise that he will incur medical bills in the future. Walker v. Walker, 106 N.H. 282, 210 A.2d 468 (1965).
Plaintiff has filed 78 requests for findings of fact and rulings of law; defendant 220 or a total of 308. Many requests, especially those of fact include three or more separate findings in one request. Concord General Mutual Ins. Co. v. Haynes, 110 N.H. 76, 79, 260 A.2d 99 (1969).
Rule 52, Fed.R.Civ.P.
Findings should represent the judge's own determination and not the long, often argumentative statement of successful counsel.
. . . . .
The judge need only make brief, definite, pertinent findings and conclusions upon the contested matters; there is no necessity for over-elaboration of detail or particularization of facts.
United States v. Forness, C.C.A.2, 1942, 125 F.2d 928, certiorari denied 316 U.S. 694, 62 S.Ct. 1293, 86 L.Ed. 1764.
Judgment for the plaintiff Fortier in the sum of $175,000.
Judgment for the plaintiff Croteau in the sum of $385,000. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1644950/ | 40 So. 3d 925 (2010)
Jaime GUERRA, Appellant,
v.
DEPARTMENT OF REVENUE, CHILD SUPPORT ENFORCEMENT PROGRAM, Appellee.
No. 3D09-3091.
District Court of Appeal of Florida, Third District.
August 4, 2010.
Jaime Guerra, in proper person.
Bill McCollum, Attorney General and Toni C. Bernstein, Tallahassee, Senior Assistant Attorney General, for appellee.
Before RAMIREZ, C.J., and GERSTEN and SALTER, JJ.
CONFESSION OF ERROR
PER CURIAM.
Jaime Guerra appeals a Final Order of Paternity and Administrative Support. He asserts that he did not receive notice of the proceedings and was not able to be present. Based on the Department of Revenue's proper confession that the appellant was not properly served at his address of record, we vacate the order and remand for further proceedings. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2858062/ | IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-011-CR
RONALD SORRELLS,
APPELLANT
vs.
THE STATE OF TEXAS,
APPELLEE
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 331ST JUDICIAL DISTRICT
NO. 104,285, HONORABLE BOB PERKINS, JUDGE
PER CURIAM
A jury found appellant guilty of delivery of a controlled substance, cocaine, (1) and
assessed punishment, after enhancement, (2) at eighty-five years' imprisonment. The trial court
sentenced appellant accordingly. Appellant challenges his conviction in two points of error.
Appellant asserts the trial court erred when it: (1) introduced evidence concerning drug dealers'
propensity to carry weapons; and (2) allegedly violated Tex. Code Crim. Proc. Ann. art. 36.27
(Vernon 1981). We will affirm the conviction.
In his first point of error, appellant asserts the trial court erred in overruling his
objection to the introduction of evidence by the State concerning drug-dealers' propensity to carry
weapons. The testimony was elicited on direct examination of Austin police officer Gary Duty.
Duty testified that on July 16, 1990, the date of the offense, he was assigned to the department's
repeat offender program. Don Mays, an undercover officer with the repeat offender program,
was assigned to buy crack cocaine as part of an undercover operation targeting repeat offenders.
Duty was part of an arrest team covering Mays while he attempted his "buy." Duty testified about
the neighborhood where the undercover operation took place and described the methods drug
dealers use when selling drugs. Thereafter, the following exchange occurred:
Ms. Wetzel [Prosecutor]: Can you tell us the purpose of having a cover team of
several officers to supervise or to back up this one officer who's buying one rock
of crack cocaine?
Duty: The primary objective is for the officer's protection, so that if something
does erupt there'll be plenty of people that know what's going on and where it's
going on at, to come to the officer's assistance.
Ms. Wetzel: What could erupt? What is it that you're having to protect him from?
Duty: It could be a robbery, any one of these drug dealers could rob him or
attempt to rob him. Someone might make him as a police officer and most of
these, not most of these people, a lot of these people carry guns, weapons.
Ms. Wetzel: Is Officer Mays -- was Officer Mays carrying a gun the day that he
went to buy cocaine?
Duty: Personally, I don't know.
Ms. Wetzel: Is it common for a police officer to carry a gun or not to carry a gun?
Duty: To carry a gun.
Ms. Wetzel: Is he wearing a bullet proof vest.
Duty: Probably not. I don't know, particularly.
Ms. Wetzel: Do you often make cocaine buys?
Duty: I have, yes.
Ms. Wetzel: Did you wear a bullet proof vest?
Duty: No.
Mr. Gates [Defense Counsel]: At this time, Your Honor, I guess I'm going to
have to object. I don't know anything about bullet proof vests or guns or anything,
any violence or anything, that's occurred in this alledged [sic] offense that has
anything to do with this question. This is far afield.
THE COURT: Any response to the objection?
Ms. Wetzel: Is the objection relevancy?
Mr. Gates: Yes.
Ms. Wetzel: We're just putting the offense in perspective and explaining the need
for a cover team. The defense lawyer asked about this one officer, one rock, and
one hand-to-hand deal. We're explaining to the jury why they need more than one
officer out there at the scene.
THE COURT: I believe the last question was as to whether or not he wore a
bullet proof vest or something to that effect; is that correct?
Ms. Wetzel: Yes, sir.
Mr. Gates: Your Honor, I think they're trying to make a lot more out of
something than there is to it. I mean, we can deal with the facts of the case.
THE COURT: I'll overrule the objection. You may answer the question.
Duty: No, I wore no bullet proof vest.
Appellant's defense counsel failed to object to this line of questioning until after the State had
asked Duty if he had worn a bullet-proof vest and Duty answered. An objection must be urged
at the earliest opportunity. Marini v. State, 593 S.W.2d 709, 714 (Tex. Crim. App. 1980).
Nothing is presented for review.
In any event, the error, if any, is harmless. Tex. R. App. P. Ann. 81(b)(2) (Supp.
1991). The testimony elicited by the question to which appellant finally objected was that Duty
was not wearing a bullet proof vest. We conclude beyond a reasonable doubt that this testimony
did not contribute to appellant's conviction or punishment. Appellant's first point of error is
overruled.
In his second point of error, appellant asserts the trial court committed reversible
error because it violated Tex. Code Crim. P. Ann. art. 36.27. Article 36.27 provides in pertinent
part:
When the jury wishes to communicate with the court, it shall so notify the sheriff,
who shall inform the court thereof. Any communication relative to the cause must
be written, prepared by the foreman and shall be submitted to the court through the
bailiff. The court shall answer any such communication in writing, and before
giving such answer to the jury shall use reasonable diligence to secure the presence
of the defendant and his counsel, and shall first submit the question and also submit
his answer to the same to the defendant or his counsel or objections and
exceptions, in the same manner as any other written instructions are submitted to
such counsel, before the court gives such answer to the jury, but if he is unable to
secure the presence of the defendant and his counsel, then he shall proceed to
answer the same as he deems proper. The written instruction or answer to the
communication shall be read in open court unless expressly waived by the
defendant.
Tex. Code Crim. P. Ann. art. 36.27 (Vernon 1981).
During its deliberations, the jury sent a note to the court. After the court received
this note the record reflects that the following occurred:
All right, we'll reconvene at this time, outside the presence of the jury. Let the
record reflect the jury has sent out the following note: "What is the relationship
between sentence assessed and parole eligibility?" [sic] Also, "Which [sic] results
in a longer period before eligibility, life sentence or 99 years?" I propose to
answer them by stating to them, "I cannot answer your questions. Follow the
charge that you have already been given." Do y'all have any objections to that?
Ms. Wetzel: No, sir.
Mr. Gates: You're, right. I do agree with it.
The note and response were sent back to the jury room. Appellant asserts that he was not present
in the courtroom during this exchange; he was not asked if he agreed with the court's response;
and the court's response was not read in open court.
Appellant neither objected to, nor created a bill of exception to show, the court's
non-compliance with article 36.27. Nothing is presented for review. Ransom v. State, 789
S.W.2d 572, 589 (Tex. Crim. App. 1989), cert. denied, ___ U.S. ___, 110 S. Ct. 3255 (1990);
Hawkins v. State, 660 S.W.2d 65, 80-81 (Tex. Crim. App. 1983); Tex. R. App. P. 52(a) (Supp.
1991).
Appellant urges that this Court find that his pro se motion for mistrial preserved
error. When the jury returned from deliberations, appellant objected as follows:
Your Honor, I want to make an objection to the jury to discuss [sic] the possibility
of parole as being unconstitutional as in Rolls vs. State. I want it entered into the
records at the convenience of the Court. On these grounds I move for a mistrial
and ask for a ruling."
The court denied appellant's motion. Appellant's objection and motion do not raise, and are not
based on, the court's non-compliance with article 36.27.
Finally, the Court's response to the jury note is not an additional instruction on the
law or a comment on a phase of the case. Nacol v. State, 590 S.W.2d 481, 486 (Tex. Crim. App.
1979). Therefore, no reversible error is shown. Id.; Rodriguez v. State, 625 S.W.2d 101, 102
(Tex. App. 1981, pet. ref'd). Appellant's second point of error is overruled.
The judgment of the trial court is affirmed.
[Before Chief Justice Carroll, Justices Aboussie and Kidd]
Affirmed
Filed: January 8, 1992
[Do Not Publish]
1. Tex. Health & Safety Code Ann. § 481.112(a) (Supp. 1991).
2. Appellant had a previous felony conviction for delivery of cocaine. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2737154/ | IN THE SUPREME COURT OF TENNESSEE
AT JACKSON
April 9, 2014 Session
STATE OF TENNESSEE v. HENRY LEE JONES
Automatic Appeal from the Court of Criminal Appeals
Criminal Court for Shelby County
No. 0306997 John P. Colton, Jr., Judge
No. W2009-01655-SC-DDT-DD - Filed September 25, 2014
The defendant was indicted for two first degree murders in Shelby County. During the trial,
the court allowed the jury to hear evidence of a third murder allegedly committed by the
defendant in a different state, ruling that the out-of-state murder qualified as a “signature
crime” and was relevant to the issue of identity. The defendant was convicted as charged and
received a sentence of death for each offense. In a divided opinion, the Court of Criminal
Appeals affirmed. Because the out-of-state murder did not qualify as a signature crime and,
under these circumstances, the danger of unfair prejudice outweighed the probative value of
the evidence, the trial court erred by allowing the proof of the third murder. Because the
error does not qualify as harmless, the convictions must be reversed and a new trial must be
granted. On remand, the State may again seek the death penalty for each offense.
Tenn. Code Ann. § 39-13-206(a)(1) (2014); Judgment of the Court of Criminal
Appeals Reversed; Case Remanded to the Trial Court
G ARY R. W ADE, C.J., delivered the opinion of the Court, in which J ANICE M. H OLDER,
C ORNELIA A. C LARK, W ILLIAM C. K OCH, J R., and S HARON G. L EE, JJ., joined.
Robert L. Parris (at trial and on appeal), and Michael E. Scholl and Jake Erwin (at trial),
Memphis, Tennessee, for the appellant, Henry Lee Jones.
Robert E. Cooper, Jr., Attorney General and Reporter; William E. Young, Solicitor General;
Gordon W. Smith, Associate Solicitor General; Leslie E. Price, Senior Counsel; William L.
Gibbons, District Attorney General; and Thomas D. Henderson and John Campbell, Assistant
District Attorneys General, for the appellee, State of Tennessee.
OPINION
I. Facts and Procedural History
On the afternoon of August 23, 2003, Margaret Coleman stopped by to check on her
sixty-six-year-old mother, Lillian James, and her eighty-two-year-old step-father, Clarence
James, at their home in Bartlett. The front door was partially open, and there were linens,
papers, and other items strewn about the house, which was ordinarily neatly maintained.
When she called out for her mother and received no response, she dialed 911. Officers with
the Bartlett Police Department soon arrived and discovered the bodies of the victims inside
the house. Both victims had incision wounds on the neck, among other injuries. There were
also signs of strangulation. An extensive investigation led the police to develop Henry Lee
Jones (the “Defendant”) as the primary suspect.
On October 7, 2003, the Shelby County Grand Jury indicted the Defendant for two
counts of first degree premeditated murder and two counts of first degree felony murder.
Later, the Defendant was arrested in Florida. The State filed a notice of intent to seek the
death penalty.
A. Tennessee Rule of Evidence 404(b) Hearing
On July 19, 2004, the State filed a “Notice of Intention to Use Evidence of Proof of
Other Crimes in Order to Establish Identity.” In particular, the State sought to introduce
evidence that the Defendant killed Carlos Perez in a motel room in Melbourne, Florida, four
days after the murders of Mr. and Mrs. James. While acknowledging that Tennessee Rule of
Evidence 404(b) prohibits the admission of evidence of other crimes to show action in
conformity with a character trait, the State asserted that the modus operandi in the Perez
murder and was so distinctive and so strikingly similar to the modus operandi in the James
murders that proof of the Perez murder was admissible as evidence on the issue of identity.
The State later amended its notice, seeking to also introduce evidence that the Defendant,
using a similar modus operandi, had killed another individual, Keith Gross, in Fort
Lauderdale, Florida, on September 7, 2002, approximately one year prior to the murders of
Mr. and Mrs. James. In order to determine whether the proof surrounding the Perez and
Gross murders qualified for admission under Tennessee Rule of Evidence 404(b), the trial
court conducted a pre-trial hearing. The terms of Rule 404(b) provide context for the
purpose of the hearing:
Evidence of other crimes, wrongs, or acts is not admissible to prove the
character of a person in order to show action in conformity with the character
trait. It may, however, be admissible for other purposes. The conditions
which must be satisfied before allowing such evidence are:
(1) The court upon request must hold a hearing outside the jury’s
-2-
presence;
(2) The court must determine that a material issue exists other than
conduct conforming with a character trait and must upon request state
on the record the material issue, the ruling, and the reasons for
admitting the evidence;
(3) The court must find proof of the other crime, wrong, or act to be
clear and convincing; and
(4) The court must exclude the evidence if its probative value is
outweighed by the danger of unfair prejudice.
At the Rule 404(b) hearing, a proceeding which involved five days of testimony,
Tevarus Young, a witness for the State, testified that in August of 2003 he was homeless and
had spent a night at a park in Fort Lauderdale. He recalled that when he awoke he was
confronted by the Defendant, who was driving a light-beige, four-door Dodge. According
to Young, the Defendant introduced himself as “Bambam” and offered to pay Young for oral
sex. Young agreed, got into the car, and was driven to a McDonald’s Restaurant. The
Defendant then took Young on a series of errands, stopping by a woman’s residence to make
a phone call, visiting two pawn shops, and driving to a courthouse in Miami to pay some
traffic tickets.
According to Young, the Defendant then drove “to some warehouses where [Young]
performed oral sex on him.” Afterward, the Defendant gave Young twenty dollars and asked
him if he would like to meet some women the Defendant knew in Daytona. Young agreed.
After stopping to pick up some clothes at the residence of Young’s grandmother, the two
men traveled approximately 250 miles north to meet two otherwise unidentified women
called “Toosie” and “Tawana.” The Defendant left with Toosie, and Young spent the night
with Tawana. When the Defendant and Toosie returned the next morning, they were arguing.
Although Young claimed that he wanted to stay in Daytona and start a new life with Tawana,
the Defendant convinced him to leave so they could visit some of his relatives. Although he
did not know where they were going, Young recalled that the Defendant drove for “[m]aybe
a day, a day and a half.” Young fell asleep during the latter part of the trip, and when he
awoke he was alone in the car, which was parked in front of a Burger King Restaurant in
Bartlett, Tennessee. He remembered that a Burger King employee approached the car, asked
for the Defendant, and left. Eventually, Young went inside the Burger King and saw the
same employee having a conversation with the Defendant. A different employee brought
them some food and, after their meal, the Defendant drove to a nearby apartment complex
and parked his vehicle.
-3-
Young and the Defendant got out of the car and encountered an elderly African-
American man, later identified as Mr. James, who was sitting in his garage. The Defendant
said, “Hey, Pops, how are you doing?” Mr. James then informed the Defendant that he had
just been released from the hospital and was waiting for a man to come and mow his lawn.
Young claimed that he offered to mow the lawn for free, but that Mr. James asked only that
he move the lawnmower from the front yard to the back yard.
Young testified that when he returned to the front yard, neither the Defendant nor Mr.
James were in sight and the garage door was closed. Young knocked on the front door, but
received no answer. When he walked inside, he saw the Defendant with a bloody rope and
two bloody towels in his hand. According to Young, the Defendant then entered one of the
rooms, threw to the floor an elderly woman, later identified as Mrs. James, and shouted,
“[O]ld lady, do you know what time it is, do you know what time it is[?] . . . [W]here’s your
purse? . . . [W]here’s the money?” When, in response, Mrs. James pointed the Defendant
to another room, he tied her arms and legs, took off her rings, and directed Young to sit in
a chair by the door. As the Defendant left the room to look for the purse, Mrs. James asked
Young if they were going to kill her. When Young answered that he thought that the
Defendant was related to her, Mrs. James explained that she did not even know the
Defendant.
According to Young, the Defendant returned, picked up Mrs. James, and used her
body to push Young into the hallway and then into a bedroom. Young testified that the
Defendant threw Mrs. James to the floor, placed the rope around her neck, choked her by
pressing his foot into the back of her neck, and then cut her neck with a knife, killing her.
The Defendant explained to Young that Mrs. James had seen his face.
Young stated that the Defendant then went to another part of the house and returned
with a plastic grocery bag. He led Young into a laundry room, where Mr. James was lying,
apparently dead. Mr. James’ body was surrounded by blood and his hands were tied behind
his back. The Defendant removed the ropes used to tie Mr. James’ hands and placed them
in the bag that Young held. Eventually, the Defendant put the contents of Mrs. James’ purse
into the bag and the two men left the house. As the Defendant drove away, he threw several
items out of the car window. The Defendant later took a billfold from the bag, removed the
cash, and threw the billfold out the window. He gave Young approximately $1500 in cash
and the rings he had taken from Mrs. James’ fingers. Young claimed that the Defendant then
displayed his knife and threatened to kill him if he told anyone of the murders. The
Defendant drove to a shopping center and bought clothes and shoes for himself and Young.
As they drove away, the Defendant instructed Young to change into his new clothes and
throw his old clothes out the window.
-4-
Young testified that the Defendant next drove to a used car dealership in Mississippi.
After talking with a salesman, the Defendant purchased a white Lincoln Town Car. From
there, the two drove back to Florida, with the Defendant driving the Lincoln and Young
following in the Dodge. Young claimed that along the way he decided to try to escape from
the Defendant or, if necessary, “to have a car fight with him.” As he was about to pass the
Defendant, however, he noticed that a police vehicle had activated its blue lights, so he
pulled over to the side of the road. Young initially gave the officer a false name. The
Defendant turned around and stopped his Lincoln behind the officer’s vehicle during the
course of the stop. When the officer learned Young’s real name, he discovered an
outstanding warrant for Young’s arrest. After being taken into custody, Young was
questioned about the murders in Bartlett. He first told the officers that he had remained
outside while the Defendant entered the residence of an elderly couple and killed them. On
the next day, Young “broke down and . . . told them everything that happened,” including
what he had seen inside the residence.
Margaret Coleman, the daughter of Mrs. James and the step-daughter of Mr. James,
also testified at the Rule 404(b) hearing. She stated that Mr. James had recently retired and
that Mrs. James worked the night shift in the environmental services department at Methodist
Central Hospital in Memphis. Because she did not drive, Mrs. James typically rode a bus to
work and had one of her children drive her home at the end of her shift. When Coleman
arrived at 1:30 a.m. on Saturday, August 23, 2003, her mother was not at the hospital, and
so she assumed that her mother had found another way home. Coleman telephoned Mrs.
James at her house at that time and later in the morning, but received no answer. At first, she
suspected that Mrs. James may have been without phone service because of a recent storm.
Coleman visited Mr. and Mrs. James’ residence between 2:30 and 3:00 that afternoon. When
she noticed that the garage door was closed, the front door was open, and the inside of the
residence was in disarray, she called 911. Coleman testified that her mother owned
diamonds, gold jewelry, and several credit cards, and that Mr. James owned a brown wallet.
Phillip Devers, an officer with the Bartlett Police Department, testified that he was
dispatched to the James residence. He found the body of Mrs. James lying “face down in a
large pool of blood, clothed only in a pair of panties.” He described her head as “almost cut
completely off.” When Officer Devers looked into the laundry room, he discovered the body
of Mr. James lying on his side on the floor in a pool of blood. He did not enter the room
because he could not open the door any further without disturbing the location of the body.
Officer Devers then went outside and waited for backup.
Lieutenant Joseph Massey, also with the Bartlett Police Department, carried out the
task of diagraming the rooms of the James residence. He observed a piece of duct tape about
the size of a quarter on Mrs. James’ right shoulder and a cord under her right foot. In
-5-
addition, he found blood in and around the sink in one of the bathrooms, which suggested
that the murderer had made some attempt to clean the crime scene.
Michael Smith, the owner of a used car dealership in Batesville, Mississippi, located
about seventy miles south of Bartlett, also testified at the Rule 404(b) hearing. He recalled
that between 5:20 and 5:25 p.m. on Friday, August 22, 2003 (the day of the James murders),
the Defendant, accompanied by another man, arrived in a white Dodge Aries K-car and
purchased a white Lincoln Town Car. Smith testified that the Defendant appeared to be in
a hurry and paid in cash, which the Defendant claimed to have received through a tax refund.
Carlos Reyes, a homicide detective with the Brevard County Sheriff’s Office in
Florida, testified that on August 25, 2003 (three days after the James murders), he was
driving southbound on Interstate 95 near Melbourne, Florida, in an unmarked police vehicle
when he noticed a man, later identified as Young, driving a white Dodge Aries K-car in a
reckless fashion—weaving in and out of traffic, cutting off other vehicles, and following too
closely. When the Dodge tailgated Detective Reyes, he first flashed his blue lights as a
warning, and, a few minutes later, when the Dodge passed him at a speed in excess of the
limit, he conducted a traffic stop. When asked for his license, registration, and proof of
insurance, Young admitted to Detective Reyes that he did not have his license with him and
provided a false name. He claimed that he was following his step-father, but was unable to
tell the detective his step-father’s name. A few minutes later, a white Lincoln Town Car
driven by the Defendant pulled behind the detective’s vehicle. At that point, Detective Reyes
instructed the Defendant to stay in his car and called for backup. Another officer in a marked
police car arrived within two minutes. When Detective Reyes asked the Defendant to
identify the driver of the Dodge, the Defendant responded that he was “someone he just met
through a friend.” The Defendant explained that he had just purchased a second vehicle and
had paid Young to follow him to Florida in the Dodge. The Defendant provided his license
and the proper documentation for both vehicles.
When further questioned, Young identified himself and provided his correct date of
birth. Because Young had an outstanding warrant in Broward County, Florida, for an
“occupied burglary and assault,” he was placed under arrest. Detective Reyes instructed the
Defendant to leave the scene and to “come back in around twenty . . . minutes” to retrieve
the Dodge. When the Defendant did not return, Detective Reyes left the Dodge parked on
the side of the road.
Ravindra Patel, the manager of a Super 8 Motel in Melbourne, Florida, testified at the
Rule 404(b) hearing about the Perez murder. Patel stated that he saw a mid-sized white
sedan enter the motel parking lot at 1:00 p.m. on August 26, 2003 (four days after the James
murders), and observed the passenger, a white male wearing khaki shorts and a t-shirt, step
-6-
out of the car, enter the motel office, and then return to the car. Patel stated that an African-
American male exited the car and entered the motel with the other man. Patel described the
African-American male as short, skinny, and approximately nineteen or twenty years old,
wearing long pants and a button-up shirt worn open over a t-shirt. Later, when Patel was
working at the front desk, he noticed that the white male had rented Room 217. According
to Patel, on the following day, a housekeeping employee discovered a body on the bed in
Room 217. The body was partially covered by a comforter. Patel called 911 and did not
allow anyone to enter the room until police arrived.
Johnny Lawson of the Melbourne Police Department investigated the murder at the
Super 8 Motel. Although he found no identification on the body in Room 217, a motel clerk
provided a registration card with the name Carlos Perez and a Pennsylvania driver’s license
number. Officers learned that Perez had previously lived in Florida, returned briefly to
Pennsylvania, and only a month before had moved back to Florida to live with his father in
Wilton Manors—some 150 miles south of Melbourne. According to Detective Lawson,
another officer learned that a credit card belonging to a murder victim in Bartlett, Tennessee,
had been used at a gas station located approximately five miles from the Super 8 Motel where
Perez’s body was discovered. The officers also received information that the Bartlett police
were on the lookout for a white Lincoln in connection with their murder investigation.
On the morning of September 4, 2003 (two weeks after the James murders), Detective
Lawson, accompanied by several other officers, traveled to Perez’s workplace—Dependable
Temps in Fort Lauderdale—to ask his co-workers if they knew why he had been in
Melbourne on the day he died. While there, one of the officers noticed a white 1993 Lincoln
Town Car with the personalized license plate “69BAM.” Although the officers asked several
employees about Perez, none had any new information, and so the officers left. Detective
Lawson then ran a check on the “69BAM” tag number and discovered that it was registered
to the Defendant. When the officers returned to check the vehicle identification number, the
Lincoln was gone. Detective Lawson then learned that the Defendant was also an employee
of Dependable Temps.
By searching motor vehicle records, Detective Lawson determined that the Defendant
also owned a white 1987 Dodge Aries K-car. Records showed that the same Dodge had been
stopped three days after the James murders on Interstate 95 in Brevard County. When
Detective Lawson contacted officers with the Brevard County Sheriff’s Office, he learned
that Tevarus Young had been arrested on an outstanding warrant during the stop. Detective
Lawson later spoke with Detective Reyes, who described the actions of the Defendant during
the August 25th traffic stop. Detective Lawson then contacted the Bartlett Police Department
to relay the information he had collected. When Detective Lawson mentioned the name of
the Defendant, the Bartlett police discovered that the Defendant had previously resided
-7-
within a mile of the James residence. Lieutenant Massey traveled to Melbourne, where he
and Detective Lawson compared the crime scenes and the time lines in their respective
investigations.
On September 12, 2003, Detective Lawson and Lieutenant Massey interviewed Young
at the Broward County Detention Center. After waiving his Fifth Amendment rights, Young
talked to the officers for several hours. Detective Lawson described Young as “congenial”
during the first part of the interview, but stated that Young later became upset to the point
of physical illness, “throwing up[] in the trash can, rolling on the floor, screaming, hollering,
crying, banging his hands, trying to talk but unable to because he was crying so hard.” When
Detective Lawson and Lieutenant Massey returned the next day to conduct a second
interview, Young changed his story, and, when the officers challenged the veracity of his
statements, he became upset and changed his story again.
Approximately one month after the interviews with Young, the Defendant was
indicted for the murders of Mr. and Mrs. James, a warrant for his arrest was issued, and he
was apprehended in Florida. Around the same time, officers in Florida executed warrants
to seize and search both the Dodge and the Lincoln owned by the Defendant. After his arrest,
the Defendant waived his Fifth Amendment rights and agreed to a recorded interview by
Detective Lawson and another detective from his unit. Detective Lawson testified as to the
content of the statement. The Defendant acknowledged that he knew Perez through his
employment with Dependable Temps and that on a couple of occasions the two had
purchased cocaine together. While denying any contact with Perez on the day he died, the
Defendant admitted that he owned a white 1987 Dodge Aries K-car and a white 1993
Lincoln Town Car. According to the Defendant, Perez had been in both cars in the past. The
Defendant also admitted that he had purchased the Lincoln in Mississippi and that Young had
helped him transport the Lincoln to Florida. The Defendant acknowledged his awareness of
the stop and arrest of Young in Brevard County. He stated that he took a bus from Fort
Lauderdale back to Melbourne to get the Dodge the day after the stop. By the time the
Defendant made his statement to the police, Detective Lawson had already verified with
Greyhound Bus Lines that the Defendant had purchased a bus ticket two days after the
Brevard County traffic stop and one day after Perez had checked into the Super 8 Motel.
Detective Lawson testified that a copy of the ticket was found during a search of one of the
Defendant’s vehicles.
Dr. O’Brian Cleary Smith, the Shelby County Medical Examiner and a witness for the
State, provided medical testimony concerning the murders of Mr. and Mrs. James. Dr.
Smith, an expert in forensic pathology, examined the crime scene at the James residence and
performed the autopsies of Mr. and Mrs. James. His autopsy report, which listed Mr. James’
height as five feet, nine inches and his weight as 137 pounds, indicated that Mr. James had
-8-
sustained three distinct neck injuries. First, he suffered a fracture of his cervical spine, likely
caused by either compressive forces applied to the neck or forcible flexion of the neck. Dr.
Smith explained that this type of injury may result from bending the head down in a forceful
manner, which can cause the bones of the spine to compress so tightly that they fracture. He
stated that the compression results from “pushing the head down,” as may occur when
something forcefully “cause[s] the chin to drop down on the chest or in some instances a
maneuver like a half-nelson where the [attacker’s] forearm is across the neck and the other
arm is at the back of the head.” He described the second neck injury as a fracture of the
hyoid bone, which is between the base of the jaw and the top of the Adam’s apple. The
hyoid fracture was caused by compressive forces applied to the front of the neck in a left-to-
right direction. As to both the cervical spine and hyoid fractures, Dr. Smith testified that
these injuries, while not fatal on their own, were indicative of the application of “moderate
to severe” forces that “can have effects on other structures of the body that can result in
strangulation.” He stated that the third category of neck wound suffered by Mr. James
consisted of “sharp force injuries,” including four incisions and a single stab wound.1 Dr.
Smith described the incision wounds as “confluent,” meaning that they may have started in
multiple distinct areas but they ran together “to create one slightly ragged wound” on the
front of the neck. The stab wound occurred on the right front part of the neck and resulted
in a punctured windpipe.
Dr. Smith further reported that Mr. James’ eyes showed signs of petechial
hemorrhaging, the rupture of small blood vessels within the “membrane that lines the inside
of the eyelids and also covers the majority of the white of the eye that one sees.” He testified
that petechial hemorrhaging often occurs in cases of strangulation. The autopsy further
indicated that bindings had been used on Mr. James’ extremities. In particular, there were
pressure marks on each forearm, “indicating that some type of narrow band-like material had
been applied” in a forcible manner. The left forearm had incision wounds that demonstrated
“an absence of active bleeding,” meaning that the wounds had been inflicted at the time of
or after death occurred. Fragments of a red metallic material—likely copper—were present
in the incision, and the pressure marks were consistent with the use of a metallic wire
binding. Dr. Smith found that Mr. James sustained fractures to both the left and right side
of the ribs resulting from a compressive force. He described the pattern of bleeding around
the rib injuries as indicative that they occurred while Mr. James was still alive. Dr. Smith
testified that the injuries were consistent with the attacker standing on Mr. James’ back while
1
Dr. Smith defined an incision as “a wound made by an instrument of sharp force, such as a knife
or a sharp piece of glass,” that is “longer and wider than it is deep.” In contrast, he defined a stab wound as
a wound that is made by an instrument of sharp force and that is deeper than it is long or wide, which
typically occurs “when [a] sharp object is inserted into the body instead of being dragged across the surface
of it.”
-9-
he lay face down on the floor. He further noted, however, that any other method of applying
compressive force could also explain the rib fractures, especially given that his bones were
more fragile than most due to osteoporosis.
Dr. Smith also discovered a bruise on the right side of Mr. James’ tongue, which may
have been caused by the tongue “being pinched by a tooth.” There was bleeding on the base
of the left side of the tongue caused by the stab wound to the neck. The autopsy also
revealed “blood in the airway,” which typically occurs when a person has blood somewhere
in their “upper airway” and struggles to breathe, thereby causing the blood to go “down the[]
windpipe and . . . into the air sacs of the lung.” Dr. Smith determined the cause of death for
Mr. James to be “multiple injuries to different areas of the body by different mechanisms.”
Dr. Smith also performed the autopsy of Mrs. James. He found that Mrs. James, who
was five feet, six inches tall and weighed 184 pounds, sustained five incisions in the
neck—two confluent incisions on the right side, which created a single wound just under an
inch in depth, and three confluent incisions on the left side, which created a wound that was
three inches deep and reached all the way to the spine. He discovered multiple superficial
incisions in the chin area and other injuries indicating that Mrs. James had been strangled.
Parallel lines of bruising on the right side of the neck, combined with deeper bruising of the
muscles underneath, suggested that her attacker had forcibly applied a hard object to her
neck. Dr. Smith found signs of petechial hemorrhaging in the eyes and face, which, as noted,
often appear in cases of strangulation. Dr. Smith displayed photographs that showed
bleeding into the membranes of Mrs. James’ eyes, caused by either the petechial
hemorrhaging or blunt trauma to the head. Mrs. James also had bruising on her tongue, the
back of her throat, and her windpipe, which indicated that “the compressive force may have
driven the tongue and the uppermost portion of the airway back with enough force to cause
bleeding of those elements.”
Dr. Smith found no conclusive forensic evidence that Mrs. James had been bound, but
he did identify signs consistent with bondage. Specifically, Dr. Smith noted bruising on the
back of the right wrist that may have been caused by a rope or other ligature, as well as
incisions to the forearm area that “may have been the result of the severance of a ligature.”
The pattern of bleeding around the forearm incisions suggested that they occurred close to
the time of death. Mrs. James’ ring finger on her left hand had pressure marks indicating that
she had worn two rings on that finger. There was a small abrasion just above the pressure
marks, which Dr. Smith testified could have been caused by the forceful removal of the rings.
Dr. Smith testified that “multiple injuries” caused the death of Mrs. James.
On cross-examination, Dr. Smith testified that he had performed “thousands” of
autopsies of homicide victims in Shelby County and the surrounding area during his career
-10-
of nearly thirty years in forensic pathology. According to Dr. Smith, a “sizable percentage”
of homicides involved either a death attributable to “multiple injuries” or a death “caused by
sharp instruments like knives.” Dr. Smith stated that “throat cutting” had become
increasingly common in recent years and was not an unusual method of homicide in 2003.
He further explained that in such cases, multiple incisions are typical because, unlike surgical
instruments, ordinary knives provide an inefficient method of cutting through loose skin in
order to reach the tissue underneath. He stated that a non-surgical knife must typically “be
applied in a serial fashion to increase the depth of the injury with each subsequent cutting
action.” Dr. Smith described stab wounds to the neck as “not particularly rare” in cases
where a victim’s throat has been cut. In Dr. Smith’s experience, “asphyxiation by possible
strangulation” was “probably a little bit more common than throat cutting.” Dr. Smith
testified that bondage was not unusual and, like throat cutting, had become more prevalent
in recent years. When asked whether the combination of bondage, throat cutting, and
asphyxiation by possible strangulation was uncommon, Dr. Smith responded, “No.”
Although Mrs. James was found dressed in only her panties, Dr. Smith testified that
he found no evidence of sexual assault or sexual deviancy. In his opinion, the crime scene
was unusual only in that it was a double homicide, the victims were found in separate parts
of the residence, and the victims appeared to be “regular folks” who lived in a well-kept
home, whereas in most “crime scenes, especially in a home, the home has been used for illicit
activities.” Dr. Smith distinguished between ligature strangulation, which involves the use
of “some sort of flexible object, [such as] a wire, a cord, [or a] rope,” and “compressive force
strangulation,” which involves the use of a rigid object. Dr. Smith clarified that there had
been no evidence of ligature strangulation as to either victim, but the autopsy of Mrs. James
revealed evidence of compressive force strangulation. Regarding the position of Mrs. James’
body, Dr. Smith testified that Mrs. James had been found lying face down with a pool of
blood behind her, which suggested that she had been “in a position other than that in which
she was found at the time that [her] neck wounds were produced.” Dr. Smith confirmed that
it was not unusual for a victim whose throat has been cut to be found lying face down.
On redirect examination by the State, Dr. Smith testified that gunshot wounds were
likely the most common form of homicide in Shelby County, followed by sharp force
injuries, “multiple injuries,” and blunt force trauma. Dr. Smith estimated that less than half
of Shelby County homicides involve incision wounds. A smaller percentage involve both
incisions and strangulation, and an even smaller percentage involve incisions, strangulation,
binding, and the removal of the bindings prior to discovery. On re-cross-examination,
however, Dr. Smith reiterated that the elements of the homicides of Mr. and Mrs.
James—throat cutting, strangulation, binding, and the removal of bindings—are not unusual,
and that the combination of these elements is “[n]ot unique.”
-11-
Melbourne Police Department Officer Scott Dwyer, who investigated the crime scene
at the Super 8 Motel where the body of Carlos Perez was discovered, also testified at the
Rule 404(b) hearing. He conducted a vacuum sweep of the carpet to collect hair and fiber
evidence. There was blood spatter on the wall by the bed and on a night stand, consistent
with the deep laceration in Perez’s neck. After photographing the body, Officer Dwyer used
an alternative light source to scan the bathroom floor for shoe prints. Officer Dwyer
recovered four footwear impressions from the tile floor, which were preserved and later
transferred to a crime laboratory for comparison. Officer Dwyer also recovered twenty-seven
fingerprints from the room, but none of the prints matched the Defendant, Perez, or anyone
else involved in the investigation. Officer Dwyer testified that while searching for prints, he
observed “distinctive wipe down marks” on several surfaces in the room, indicating that
someone had used a wet cloth in an attempt to clean the area to remove any fingerprints.
Officer Dwyer also noted that the pillow cases, towels, and washcloths were missing from
the room.
Officer Dwyer acknowledged that hairs collected from the bed and comforter were
tested for DNA, and the hairs did not match the DNA of either Perez or the Defendant. Hair
and debris collected from Perez’s pubic area were also tested and did not match the
Defendant’s DNA. Officer Dwyer reported that five cigarette butts were recovered from the
room and tested. Some of the cigarette butts matched the DNA of Perez, and one of the butts
tested positive for female DNA. Officer Dwyer testified that DNA testing was also
performed on a sample retrieved from a swab of Perez’s penis, and the DNA profile from the
swab was that of a female. Officer Dwyer indicated that fluid recovered from Perez’s anal
cavity did not match the DNA profile of Perez or the Defendant. Because the samples taken
from Perez’s genitals and anal cavity did not match Perez’s DNA, it appeared to Officer
Dwyer that “some kind of sexual activity [had taken] place.” Officer Dwyer reiterated his
conclusion that the room had been wiped down, but he admitted that it was impossible to
ascertain when the wiping down occurred and that it could have resulted from motel
employees cleaning the room before Perez checked in.
Special Agent Thomas Davis with the Florida Department of Law Enforcement
(“FDLE”)2 testified that on September 16, 2003, he and other agents executed a search
warrant on the Defendant’s Lincoln Town Car. He supervised the search of the vehicle,
during which officers found a pair of Nike tennis shoes in the trunk. The shoes were
transferred to the custody of Emily Strickland, an FDLE crime analyst, for shoe-print
comparison.
2
The record reflects that the FDLE is the investigative state police agency for Florida, comparable
to the Tennessee Bureau of Investigation.
-12-
Strickland, an expert in footwear impression comparisons, testified that in 2003, she
was assigned the task of comparing the pair of Nike tennis shoes seized from the Defendant’s
Lincoln to a latent shoe print recovered from the bathroom in the Super 8 Motel. Using
standard techniques, Strickland determined that the prints from the crime scene were made
by Nikes of the same size, shape, and “tread design” as those recovered from the Lincoln.
In addition, Strickland explained that footwear impression analysts look for “individual
characteristics,” which a shoe may acquire after the manufacturing process when something
happens that gives the shoe a unique print, such as a person damaging the sole by walking
over a sharp rock or a piece of glass. Strickland found on the Nikes two individual
characteristics that matched the latent prints from the Perez crime scene: first, both the Nikes
and the latent prints had a “cut” in the shape of a finger that matched in terms of size and
position, and, second, Strickland identified a “wear pattern” on the edge of the left Nike, near
the arch, that showed up in the print. Based on these findings, Strickland initially concluded
in her report that the prints at the Perez crime scene “could have been made” by the Nikes
recovered from the Defendant’s Lincoln. Upon further consideration, however, she believed
that the prints were “most likely” made by the Nikes.
Dr. Sajid Qaiser, the Brevard County Medical Examiner and an expert in forensic
pathology, performed the autopsy of Perez. Dr. Qaiser observed evidence of ligature
strangulation, including a ligature mark almost completely encircling the neck, and petechial
hemorrhaging in the eyes, eye lids, and the area of the face surrounding the eyes. Dr. Qaiser
also observed seven to eight incisions on the neck, which created a wound that was seven to
twelve inches long and one to two inches deep. The neck incisions resulted in the severance
of the internal jugular vein and were consistent with the application of a knife or a similar
sharp object. Dr. Qaiser found blood in the lungs and throughout the tracheal bronchial tree,
indicating that Perez had both aspirated and ingested blood as a result of the incisions to his
neck. Dr. Qaiser further testified that there were abrasions on one of Perez’s wrists, as well
as tape residue on both wrists. The nature of the abrasions indicated that they occurred after
Perez’s death, likely as a result of the removal of the tape. Dr. Qaiser concluded that the
cause of death was ligature strangulation and incision wounds to the neck.
On cross-examination, Dr. Qaiser testified that he observed “marks” or “furrows” on
the neck, wrists, and ankles, all indicating that the victim had been bound. The size and
pattern of the marks suggested that the attacker had used a “band-like” ligature
approximately one quarter inch in width. Dr. Qaiser testified that there was a small injury
on Perez’s back that may have been a bite mark. Dr. Qaiser further testified that although
the anal opening was dilated and two fresh abrasions were present on the walls of the anal
opening, this was not necessarily indicative of non-consensual sexual activity. In addition,
Dr. Qaiser noted that the toxicology report for Perez revealed the presence of marijuana. Dr.
Qaiser further observed that although the hyoid bone and larynx were intact, that is not
-13-
unusual in cases of ligature strangulation.3
At the conclusion of the hearing, the trial court issued a written order addressing the
admissibility of the proposed evidence of the Perez murder under Tennessee Rule of
Evidence 404(b). The trial court first determined that “the method of commission of the
[Perez murder] establishes such a unique modus operandi that it fairly leads to the inference
that the perpetrator of the Perez murder was the perpetrator of the James murders.” The trial
court found that the murders of Perez and Mr. and Mrs. James shared the following
characteristics: (1) multiple incision wounds to the neck; (2) strangulation; (3) the use of
bindings; (4) the body being found face down; and (5) an attempt by the perpetrator to “wipe
down” or “clean” the scene after the murder. The trial court further observed that both Mrs.
James and Perez were found nude or partially unclothed, and that “it appear[ed] that each of
the victim[s] may have known [the] attacker.” The trial court acknowledged the existence
of “some differences” between the Perez murder and the James murders, especially the fact
that Perez was a “young, male victim[] who showed signs of recent sexual activity,” whereas
the Jameses were “elderly victims” who were not sexually assaulted. Nevertheless, the trial
court found that the similarities between the crimes outweighed “any differences in the
victimology of the offenses.”
Second, the trial court concluded that the proof “of the other crime, wrong, or act”
presented by the State at the hearing qualified as “clear and convincing.” See Tenn. R. Evid.
404(b)(3). The trial court emphasized the likely shoe print match, the fact that the Defendant
and Perez had worked together, and “additional evidence plac[ing] the [D]efendant in the
area at the time of the murder.”
Third, the trial court deferred ruling as to whether “a material issue exists other than
conduct conforming with a character trait,” such as the identity of the perpetrator, indicating
that the proof at trial would dictate the result. See Tenn. R. Evid. 404(b)(2). Nevertheless,
the trial court provided guidance by informing the parties that if the proof were to place at
issue the Defendant’s identity as the perpetrator of the murders of Mr. and Mrs. James, then
the evidence that the Defendant killed Perez in a similar fashion would be material to the
issue.
3
During the Rule 404(b) hearing, the State also offered testimony from numerous witnesses
regarding the murder of Keith Gross in Fort Lauderdale, Florida, on September 7, 2002, approximately one
year prior to the murders of Mr. and Mrs. James. The State sought permission from the trial court to allow
evidence of the Gross murder in the prosecution of the Defendant for the murders of Mr. and Mrs. James.
The trial court held that the evidence pertaining to the Gross murder was inadmissible because it was “simply
too remote in time to have sufficient relevance to the issue of the [D]efendant’s identity as the perpetrator
of the instant crimes.” Because the trial court excluded all evidence of the Gross murder and the State has
not appealed that ruling, we have omitted that evidence from our summary of the facts.
-14-
Fourth, the trial court also deferred ruling as to whether the probative value of the
evidence of the Perez murder was “outweighed by the danger of unfair prejudice.” See Tenn.
R. Evid. 404(b)(4). The trial court again indicated that resolution of this issue would depend
upon the proof at trial.
Finally, the trial court observed that because of the “nearly inextricable investigative
connection” between the Perez murder and the James murders, “it may be necessary to admit
at least portions of proof, relating to the Perez murder, in order to create a complete picture
for the jury of the investigation conducted by the Bartlett authorities.”
B. Guilt Phase
During the guilt phase of the trial, the State offered testimony from many of the same
witnesses who had testified at the Rule 404(b) hearing prior to trial. Detective Carlos Reyes
(the detective who pulled over and arrested Young), Margaret Coleman (the daughter of Mrs.
James), and Michael Smith (the car dealer who sold the Lincoln to the Defendant) all
provided testimony as to the investigation of the James murders that was in all material
respects consistent with their prior testimony.
During the testimony of Officer Phillip Devers (the Bartlett police officer who first
responded to the scene of the James murders and discovered the victims), the State sought
to admit photographs of the bodies of Mr. and Mrs. James. The defense objected to both
photographs on the basis that they were overly inflammatory and prejudicial. The trial court
admitted the photographs, holding that the pictures were not inflammatory because they
depicted the bodies as they were “found immediately upon going into the area where they
were deceased.” The remainder of Officer Devers’ testimony was consistent with his
testimony during the Rule 404(b) hearing.
Lieutenant Joseph Massey’s testimony about his first two interviews with Tevarus
Young was essentially the same as Detective Johnny Lawson’s account of the interviews.
Lieutenant Massey testified that Young was “very emotional” during the first interview,
crying uncontrollably and vomiting. While confirming that Young calmed down somewhat
for the second interview, Lieutenant Massey stated that Young continued to “cry
uncontrollably at times.” Lieutenant Massey also confirmed that Young changed his story
numerous times. Lieutenant Massey acknowledged that Young repeatedly lied to the officers
during the interviews. He also conceded that James White, an individual who lived near the
James residence, had initially been another viable person of interest in the course of the
investigation.
Detective David Neyman of the Bartlett Police Department, who went to three
different gas stations in Mississippi where Mrs. James’ stolen credit card was used, was able
-15-
to view surveillance video at two of the gas stations. Detective Neyman observed a Dodge
Aries K-car in the video from a gas station where the stolen card was used in Batesville,
Mississippi, and observed the same Dodge following a white Lincoln Town Car when
leaving a gas station where the same card was used in Madison, Mississippi. The second
video included footage of an African-American male wearing a yellow shirt exiting and
reentering the Lincoln Town Car. Detective Neyman acknowledged, however, that the
surveillance video did not include an image of the person using the stolen card. The State
introduced into evidence records showing that Mrs. James’ credit card was used to purchase
gas at a Citgo station in Memphis at 3:18 p.m. on the date of the James murders and at
several gas stations in Mississippi and Florida on the night of the murders and over the
following two days.
Diane Armstrong, the Defendant’s niece, testified that she and her husband had
previously helped get the Defendant a job at the Burger King in Bartlett, where they both
worked. She recalled that in August of 2003, the Defendant showed up unexpectedly at her
house, and that a “young man” whom she could not identify was asleep in the Defendant’s
car. She stated that she informed the Defendant that her husband was at Burger King and
that he could go get breakfast there.
Wesley Armstrong, Diane’s husband, testified that on the same morning, he was
returning from making a deposit when he saw the Defendant’s car parked in the lot at the
Burger King where he worked. Armstrong learned from the man inside the vehicle that the
Defendant was inside the restaurant. Armstrong described the man in the car as a “skinny,”
young African-American man with “braids in his hair.” Armstrong spoke briefly to the
Defendant and gave food to the Defendant and the other man, after which they left.
Christopher Stallion, an employee of the City of Bartlett, testified that he frequently
drove past the James residence and would often see Mr. James sitting in his garage. Stallion
recalled that on the date of the murders, at approximately 1:00 p.m., he drove by and saw Mr.
James talking with two African-American men in front of his garage. Stallion could not
provide any further description of the men, although during the investigation he told officers
that one of the men was approximately six feet, one inch in height and the other was slim and
had a “low hair cut.”
James White, a resident of Bartlett who mowed lawns for supplemental income,
testified that he often mowed the lawns for the neighbors of Mr. and Mrs. James but had
never worked for the Jameses. White, who was initially a person of interest in the
investigation of the murders, maintained his innocence at all times. The police interviewed
him and searched his residence. When asked about his drug use, White admitted to
previously using crack cocaine but denied using it at the time of the murders.
-16-
Tevarus Young’s testimony at trial was consistent with his testimony from the Rule
404(b) hearing, although he testified to certain additional facts. For example, when asked
to recount what happened at the James residence, Young testified that after the Defendant
tied Mrs. James and rummaged through her purse, she informed the Defendant that her son
was supposed to be coming to the house. According to Young, the Defendant responded,
“[I]f he come[s] he[’s] going to get the same thing you’re going to get.” The Defendant then
pushed her into another room and strangled her with a rope before cutting her throat. Young
further testified that the Defendant removed the rings from Mrs. James’ fingers, put them in
the plastic bag along with the contents of her purse, and later put on the bracelet he had
stolen and gave Young the rings.
As at the Rule 404(b) hearing, Young testified that following the James murders, the
Defendant purchased the Lincoln Town Car. He added that some time after the purchase,
the Defendant raped Young at a rest area “somewhere on the interstate.” According to
Young, they again stopped to see Toosie and Tawana, the Defendant left for a while with
Toosie, and Young did “a lot of drugs.” When the Defendant came back, they continued on
their trip until Young was stopped and arrested in Brevard County.
On cross-examination, Young admitted that after being pulled over by Detective
Reyes, he wanted to get rid of Mrs. James’ rings because they tied him to the murder. Young
denied that he kept Mrs. James’ rings as “trophies,” lied to the police as part of his “game,”
or falsely portrayed himself as the victim in order to avoid prosecution. He admitted,
however, that he had initially lied to the police by stating that he, the Defendant, and Wesley
Armstrong had gone to the James residence, where he waited in the car while the Defendant
and Armstrong went inside. Young ultimately admitted that Armstrong had nothing to do
with the murders. Young acknowledged that he had been charged with facilitation of first
degree murder, and that he did not have a plea deal but hoped to receive leniency in exchange
for testifying against the Defendant.
Dr. O’Brian Cleary Smith’s trial testimony was consistent with his testimony at the
Rule 404(b) hearing concerning the injuries to Mr. and Mrs. James. On direct examination,
the State sought to admit four photographs of the autopsy of Mr. James and three
photographs of the autopsy of Mrs. James. The trial court admitted the photographs over the
Defendant’s objection. When asked on cross-examination about the marks on Mrs. James’
right wrist, Dr. Smith acknowledged that he classified the marks as ligature marks based
“mainly on the other circumstances surrounding the scene and Mr. James’s [ligature marks],”
rather than making the determination solely on the marks themselves. Moreover, Dr. Smith
testified that the only unusual aspect of the case was the identity of the victims, not how the
murders were committed. Dr. Smith explained that murders involving a combination of
techniques are something “that you see.” He further testified that the cutting of the throat
-17-
took place “relatively frequently” and was not a unique homicide method.
Following the introduction of this evidence, the trial court addressed the Rule 404(b)
issues left unresolved at the pre-trial hearing—whether identity was at issue and whether the
probative value of the proposed evidence was outweighed by the risk of prejudice to the
Defendant. The trial court ruled that identity was a material issue at trial and that the risk of
prejudice did not outweigh the probative value of the proof in light of the Defendant
“vigorously challeng[ing]” Young’s testimony and raising the issue of other “possible
suspects.” Upon ruling that the evidence of the Perez murder was admissible, the trial court
instructed the jury as follows:
Jurors, the State at this time intends to present proof regarding another crime
or crimes allegedly committed by the [D]efendant other than that which he’s
on trial for, and you may not consider such evidence to prove his disposition
to commit such a crime on this case here.
This evidence may only be considered by you for the limited purpose of
determining whether it provides proof of [the D]efendant’s identity, that is,
such evidence may be considered by you if it tends to establish the
[D]efendant’s identity in the case on trial.
A number of witnesses then testified as to the circumstances of the Perez murder.
Ravindra Patel, Special Agent Thomas Davis of the FDLE, and FDLE crime analyst Emily
Strickland all provided testimony at trial that was consistent with their prior testimony at the
Rule 404(b) hearing.
The State sought to admit five photographs of the Perez crime scene during the
testimony of Officer Scott Dwyer (one of the Melbourne police officers who investigated the
Perez murder). The Defendant objected to three of the photographs on the grounds that they
were cumulative and prejudicial due to their graphic nature. Although the trial court
excluded one of the three photographs, the other two were admitted. Officer Dwyer
acknowledged that the Super 8 Motel at which the murder was committed is in an area of
high crime and prostitution, and that he believed the Perez murder to be sexual in nature.
The remainder of his testimony was substantially the same as his testimony at the Rule
404(b) hearing.
Detective Johnny Lawson (another Melbourne police officer who investigated the
Perez murder) testified that he believed the crime scene at the Super 8 Motel had features
which initially suggested that the crime was “probably” sexual in nature. He also
characterized the area where the Super 8 Motel is located as being a “high crime rate area.”
-18-
Detective Lawson did not address his interviews with Young as extensively as he did during
the Rule 404(b) hearing, but his trial testimony was otherwise consistent with his earlier
testimony.
Dr. Sajid Qaiser’s trial testimony was essentially identical to his testimony at the Rule
404(b) hearing. Four photographs of the Perez autopsy were admitted as evidence, all over
the Defendant’s objection.
Patti Orta, a crime lab analyst for the FDLE, identified a pair of Nike shoes, a
woman’s ring, a J.C. Penney bag, clothing, and multiple cleaning products found in the
searches of the Defendant’s automobiles.
Catherine Theisen, a forensic mitochondrial DNA examiner for the FBI, compared
pubic hair found at the Perez crime scene with the Defendant’s mitochondrial DNA,
concluding that the Defendant could not be excluded as the source of the hair found at the
scene of Perez’s murder. She stated that mitochondrial DNA is not unique to a particular
individual, but that the FBI has a database to determine if a particular sample is common or
rare. Theisen determined that “[she] would not expect to see that type” in more than .26%
of the African-American population, .17% of the Caucasian population, or .39% of the
Hispanic population.
The Defendant chose not to testify. After receiving instructions from the trial court,
the jury returned verdicts of guilt for the felony murder and the premeditated murder of both
Mr. and Mrs. James.
C. Penalty Phase
During the penalty phase, the State offered victim impact evidence from Turkessa
Kenetta Helton, the granddaughter of Mrs. James and a middle school Language Arts
teacher. She testified that her family was particularly close. She explained that all of Mrs.
James’ children would drive her to and from work and often took her shopping. She further
testified that she had named her daughter after Mrs. James and that she wished Mrs. James
could see her son and daughter grow up. Helton described Mr. James as nice, generous, and
family-oriented.
As mitigating evidence, the defense called Eddie Jones, the Defendant’s brother, to
testify about their childhood. Jones explained that they grew up in a very poor family in
Cleveland, Mississippi, with ten brothers and four sisters. Jones remembered that their older
brothers were “very abusive” to both him and the Defendant, hitting them with water hoses,
coat hangers, belts, and extension cords. He also recalled that when the Defendant was
approximately five years old, one of their older brothers gave a gun to the Defendant and
-19-
directed the Defendant to shoot him. The Defendant pulled the trigger, but the gun was
unloaded. Jones stated that the Defendant had been imprisoned for fifteen to sixteen years,
but, upon release, became actively involved with their family, especially with his nieces and
nephews. Jones asked the jury for mercy.
Against the advice of his counsel, the Defendant chose to testify. He recalled that he
had a difficult childhood and described being beaten with water hoses and belts. The
Defendant stated that he never developed a relationship with his father, but that his mother
“did the best she could.” He admitted that at age eighteen he had been convicted of robbery
and served sixteen years of a thirty-year sentence. He testified that while serving this
sentence, he apologized to the victim and sought forgiveness. The Defendant maintained his
innocence of the murders of Mr. and Mrs. James. He also denied ever sexually assaulting
another person or paying Young for oral sex. The Defendant contended that Young had
fabricated his account of the murders while he was incarcerated at the Broward County
Detention Center. The Defendant acknowledged that he and Young traveled from Florida
to Tennessee and back, but denied that they committed any crimes together. The Defendant
further stated that he previously resided within one mile of Mr. and Mrs. James’ residence
and had seen them before but had never spoken with them. Although the Defendant admitted
to smoking marijuana on occasion, he testified that he was not on drugs at the time of the
murders.
The parties stipulated that the Defendant had previously been convicted of five violent
felony offenses arising out of three incidents in Florida. On March 29, 1982, the Defendant
was convicted of two counts of battery of a law enforcement officer; on April 23, 1982, he
was convicted of aggravated battery; and on July 21, 1982, he was convicted of robbery and
kidnapping.
The trial court instructed the jury to consider the following aggravating circumstances:
(1) that the Defendant had previously been convicted of one or more violent felonies; (2) that
the murders were especially heinous, atrocious, or cruel; (3) that the murders were committed
for the purpose of avoiding or interfering with a lawful arrest or prosecution; (4) that the
murders were knowingly committed while the Defendant had a substantial role in committing
or attempting to commit a robbery; and (5) as to Mr. James only, that the victim of the
murder was seventy years of age or older. See Tenn. Code Ann. § 39-13-204(i)(2), (5)–(7),
(14) (2014). In addition, the trial court instructed the jury to consider the following as
possible mitigating circumstances: (1) whether the Defendant was an accomplice to the
murder committed by another and the Defendant’s participation was relatively minor; (2) any
lingering doubt as to the Defendant’s guilt; (3) the fact that the accomplice would not be
charged with capital murder and would not face a possible death sentence; (4) the fact that
-20-
the Defendant may face a capital murder charge;4 (5) the Defendant’s background and
childhood; and (6) any other mitigating circumstance raised by the evidence.
The jury imposed a death sentence as to each count, having unanimously found that
the State proved all of the aggravating circumstances beyond a reasonable doubt and that the
aggravating circumstances outweighed any mitigating circumstances beyond a reasonable
doubt.
D. Appellate Proceedings
On direct appeal, the Defendant challenged the admission of the evidence of the Perez
murder, the sufficiency of the evidence to support his convictions, the admission of certain
victim photographs, and the constitutionality of Tennessee’s sentencing statute for first
degree murder. State v. Jones, No. W2009-01655-CCA-R3-DD, 2013 WL 1697611, at *22
(Tenn. Crim. App. Apr. 18, 2013). A majority of the panel of the Court of Criminal Appeals
rejected each of these claims. The panel majority also addressed the issues of mandatory
review set out in Tennessee Code Annotated section 39-13-206(c)(1)(A)–(D) (2014) and
concluded that the death sentences were not imposed in any arbitrary fashion; that the
evidence supported the aggravating circumstances found by the jury; that the evidence
supported the jury’s finding that the aggravating circumstances outweighed any mitigating
circumstances; and that the death sentences were not excessive or disproportionate to the
penalty imposed in similar cases. Id. at *50-54. The majority opinion affirmed the
convictions and the sentences of death, but, as required by law, remanded with instructions
for the trial court to merge each conviction for felony murder into the corresponding
premeditated murder conviction. Id. at *55 (citing State v. Kiser, 284 S.W.3d 227, 234
(Tenn. 2009)).
Judge Camille R. McMullen dissented, finding that the State had “failed to show that
the method used in these murders was so unique as to constitute a signature that would give
rise to the inference of identity.” Id. (McMullen, J., dissenting). Moreover, because Judge
McMullen was “unable to conclude that the erroneous admission of the [Perez] murder did
not [a]ffect the outcome of the verdict,” she concluded that a new trial should be granted as
to the murders of Mr. and Mrs. James. Id. at *59.
4
As to the fourth mitigating circumstance, the trial court instructed the jury that “the [D]efendant
may face a capital murder charge.” The written instructions, however, read as follows: “The Defendant may
face a capital murder charge in Florida.” (Emphasis added.) After a bench conference, the trial court
decided not to re-instruct the jury as to that mitigating factor but left the reference to Florida in the written
charge.
-21-
II. Analysis
The Defendant challenges the sufficiency of the evidence and asserts that the trial
court erred by allowing evidence of the Perez murder.
A. Sufficiency of the Evidence
The first issue is whether the evidence adequately supports the jury’s finding of guilt
as to each count of first degree murder. Our standard for reviewing the sufficiency of the
evidence, both direct and circumstantial, is limited. State v. Dorantes, 331 S.W.3d 370, 379
(Tenn. 2011). We must afford the State “the strongest legitimate view of the evidence and
all reasonable inferences that may be drawn therefrom.” State v. Vasques, 221 S.W.3d 514,
521 (Tenn. 2007) (citing State v. Cabbage, 571 S.W.2d 832, 835 (Tenn. 1978)). The
determinative question is whether, after reviewing the evidence in the light most favorable
to the State, any rational trier of fact could have found the essential elements of the crime
beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319 (1979); see also Tenn.
R. App. P. 13(e). “Because a verdict of guilt removes the presumption of innocence and
raises a presumption of guilt, the criminal defendant bears the burden on appeal of showing
that the evidence was legally insufficient to sustain a guilty verdict.” State v. Hanson, 279
S.W.3d 265, 275 (Tenn. 2009) (citing State v. Evans, 838 S.W.2d 185, 191 (Tenn. 1992)).
Although we review de novo the application of the law to the facts, Jordan v. Knox Cnty.,
213 S.W.3d 751, 763 (Tenn. 2007) (citing State v. Thacker, 164 S.W.3d 208, 247-48 (Tenn.
2005)), we cannot substitute our own inferences for those drawn by the factfinders at trial,
State v. Lewter, 313 S.W.3d 745, 747-48 (Tenn. 2010).
When the only proof of a crime is the uncorroborated testimony of one or more
accomplices, the evidence is insufficient to sustain a conviction as a matter of law. State v.
Collier, 411 S.W.3d 886, 894 (Tenn. 2013) (citing State v. Little, 402 S.W.3d 202, 211-12
(Tenn. 2013)). This Court has defined the term “accomplice” to mean “one who knowingly,
voluntarily, and with common intent with the principal unites in the commission of a crime.”
Id. (citing State v. Bough, 152 S.W.3d 453, 464 (Tenn. 2004); Clapp v. State, 30 S.W. 214,
216 (Tenn. 1895)). The test for whether a witness qualifies as an accomplice is “‘whether
the alleged accomplice could be indicted for the same offense charged against the
defendant.’” Id. (quoting Monts v. State, 379 S.W.2d 34, 43 (Tenn. 1964)). Although a
defendant cannot be convicted solely upon the uncorroborated testimony of an accomplice,
“corroborative evidence may be direct or entirely circumstantial, and it need not be adequate,
in and of itself, to support a conviction; it is sufficient to meet the requirements of the rule
if it fairly and legitimately tends to connect the defendant with the commission of the crime
charged.” State v. Bane, 57 S.W.3d 411, 419 (Tenn. 2001) (quoting State v. Bigbee, 885
S.W.2d 797, 803 (Tenn. 1994)). Corroborative evidence must lead to the inferences that a
crime has been committed and that the defendant is implicated in the crime. Id.
-22-
The Defendant asserts that “[t]here is a complete lack of evidence to corroborate the
testimony of indicted co-conspirator, Tevarus Young, and no rational jury could find beyond
a reasonable doubt that the [Defendant] was guilty of any of the crimes upon which he was
convicted.” The State contends that Young’s testimony was adequately corroborated and
established the elements of each offense. The State has not challenged the determination by
the Court of Criminal Appeals that “Young’s admitted participation in the offenses was
sufficient to render him an accomplice in the murders of Mr. and Mrs. James.” Jones, 2013
WL 1697611, at *44. We agree that Young’s involvement qualifies him as an accomplice.
The question before us, therefore, is whether Young’s testimony was adequately corroborated
by other evidence.
Wesley and Diane Armstrong of Bartlett, Tennessee, confirmed that the Defendant
visited both their residence and their place of employment, a Burger King Restaurant, in
August of 2003. The Armstrongs testified that the Defendant was accompanied by an
unknown person whom they described as a skinny African-American male with braided
hair—a description that would closely resemble Young. The Armstrongs’ testimony is
consistent with Young’s testimony as to the events leading up to the James murders.
Christopher Stallion testified that at approximately 1:00 p.m. on the date of the
murders, he saw two African-American men standing with Mr. James near his garage. This
is consistent with Young’s testimony that he and the Defendant had talked with Mr. James
in front of the Jameses’ garage prior to the murders.
Young testified that just after the murder and several times during their drive back to
Florida, the Defendant used a credit card stolen from the victims to purchase gas. The State
introduced records confirming the use of Mrs. James’ card at a gas station in Memphis at
3:18 p.m. on the date of the James murders. The State also produced documentation of
purchases made with the same credit card on the night of the murders and over the following
two days at several gas stations in Mississippi and Florida. Surveillance video from a gas
station in Batesville, Mississippi, at approximately 8:00 p.m. on the day of the James
murders, depicted a Dodge Aries K-car matching that owned by the Defendant. Video from
a gas station in Madison, Mississippi, taken on the same date at approximately 11:00 p.m.,
showed an African-American male with a yellow shirt, which is consistent with Young’s
testimony that the Defendant purchased such a shirt at J.C. Penney. The Madison video
showed that the man in the yellow shirt exited and then reentered a Lincoln Town Car, and
also showed that the Lincoln, upon leaving the station, was followed by a Dodge Aries K-car.
Michael Smith, the owner of a used car dealership in Mississippi, confirmed Young’s
testimony that the Defendant paid cash for the Lincoln Town Car shortly after the murders.
Detective Carlos Reyes verified Young’s testimony that he was stopped and arrested in
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Brevard County, Florida, and that the Defendant returned to the place of the stop to
acknowledge his ownership of the car driven by Young. Further, during a search of the
Defendant’s Lincoln, Florida officers discovered a J.C. Penney bag and a ring, the latter of
which was later identified by Margaret Coleman as belonging to Mrs. James.
Of further significance, the testimony of Dr. Smith, the Shelby County Medical
Examiner, corroborated Young’s testimony as to both the nature of the injuries sustained by
Mr. and Mrs. James and the manner in which they were murdered. Dr. Smith testified that
both Mr. and Mrs. James sustained incision wounds to the neck and displayed signs of
strangulation and bondage, all of which was consistent with Young’s testimony. Dr. Smith
also found abrasions that were compatible with the forcible removal of rings from Mrs.
James’ fingers, as Young testified the Defendant had done. Moreover, Dr. Smith’s
description of the crime scene verified Young’s testimony that he and the Defendant left Mrs.
James’ body in one of the bedrooms and left Mr. James’ body in the laundry room.
This corroborative evidence, which confirmed Young’s testimony as to the events
before, during, and after the murders of Mr. and Mrs. James, fairly and legitimately tends to
connect the Defendant with these crimes. See Bane, 57 S.W.3d at 419. In consequence,
Young’s testimony was adequately corroborated.
Furthermore, Young’s testimony, combined with the other evidence at trial, was
sufficient for a rational trier of fact to find the essential elements of each offense beyond a
reasonable doubt. In this instance, the offenses at issue are first degree premeditated murder
and first degree felony murder. Premeditated murder, defined as the “premeditated and
intentional killing of another,” Tenn. Code Ann. § 39-13-202(a)(1) (2014), “may be
established by any evidence from which a rational trier of fact may infer that the killing was
done ‘after the exercise of reflection and judgment,’” State v. Leach, 148 S.W.3d 42, 53
(Tenn. 2004) (quoting State v. Davidson, 121 S.W.3d 600, 615 (Tenn. 2003)). Felony
murder is defined, in relevant part, as “[a] killing of another committed in the perpetration
of or attempt to perpetrate . . . [a] robbery.” Tenn. Code Ann. § 39-13-202(a)(2). For a
felony murder conviction, “[n]o culpable mental state is required . . . except the intent to
commit” the underlying offense, id. § 39-13-202(b), which in this instance is robbery.
“Robbery is the intentional or knowing theft of property from the person of another by
violence or by putting the person in fear.” Id. § 39-13-401(a) (2014).
Young testified that he witnessed the Defendant murder Mrs. James and observed the
body of Mr. James after the Defendant had been alone with him just moments before. The
evidence established that the Defendant used weapons, including a knife and rope, upon
unarmed victims who were particularly vulnerable because of their ages. The Defendant’s
method of killing Mr. and Mrs. James—which involved binding, strangulation, and throat
-24-
cutting—was especially cruel. The Defendant explained to Young that he had killed Mrs.
James because she had seen his face. The Defendant’s robbery of the Jameses’ money, credit
cards, and jewelry indicates another motive for the murders. The Defendant proceeded
methodically and calmly after the murders, and attempted to clean the crime scene before
making his escape. Each of these facts is indicative of premeditation and, taken together,
they provide a basis for a rational trier of fact to infer that the murders were committed “after
the exercise of reflection and judgment,” as required by Tennessee Code Annotated section
39-13-202(d). See Leach, 148 S.W.3d at 53-54 (noting that circumstances which may
support a finding of premeditation include the use of a deadly weapon upon an unarmed
victim, the particular cruelty of the killing, the destruction or secretion of evidence of the
killing, a defendant’s calmness after the killing, and the motive for the killing). As a result,
the evidence adequately supports the Defendant’s convictions for the first degree
premeditated murders of Mr. and Mrs. James.
As to the felony murder convictions, the evidence demonstrated that the Defendant
used threats and violence to accomplish the theft of a billfold from Mr. James and the theft
of money, credit cards, and jewelry from Mrs. James. The proof further established that Mr.
and Mrs. James died as a result of injuries sustained from the use of violence by the
Defendant. Accordingly, the evidence supports the Defendant’s convictions for the first
degree felony murders of Mr. and Mrs. James during the perpetration of a robbery.5
B. Admissibility of the Evidence of the Perez Murder
The second question is whether the trial court properly admitted evidence relating to
the Perez murder. As noted, this issue is governed by Tennessee Rule of Evidence 404(b),
which generally prohibits “[e]vidence of other crimes, wrongs, or acts . . . to prove the
character of a person in order to show action in conformity with the character trait.” The
Rule, however, allows such evidence “for other purposes” upon the following conditions:
(1) The court upon request must hold a hearing outside the jury’s presence;
(2) The court must determine that a material issue exists other than conduct
conforming with a character trait and must upon request state on the record the
material issue, the ruling, and the reasons for admitting the evidence;
5
As noted by the Court of Criminal Appeals, our law requires “the merger of multiple convictions
of first degree murder involving a single victim.” Kiser, 284 S.W.3d at 234 n.2 (citing State v. Cribbs, 967
S.W.2d 773, 788 (Tenn. 1998)). Thus, while the evidence is sufficient to support each of the convictions in
this case, the convictions for premeditated murder and felony murder should have been merged, resulting in
a single judgment of conviction as to each victim.
-25-
(3) The court must find proof of the other crime, wrong, or act to be clear and
convincing; and
(4) The court must exclude the evidence if its probative value is outweighed
by the danger of unfair prejudice.
The comments to the Rule provide that the evidence of other crimes, wrongs, or acts should
be excluded unless relevant to an issue other than the character of a defendant, such as
identity, motive, intent, or absence of mistake. See Tenn. R. Evid. 404, Advisory
Commission cmt.; see also Bunch v. State, 605 S.W.2d 227, 229 (Tenn. 1980). In State v.
Parton, 694 S.W.2d 299, 303 (Tenn. 1985), the decision upon which the Rule is based, this
Court specifically held that before the proposed evidence can be admitted, the trial court must
first find that the Defendant’s connection to the other crime, wrong, or act has been clearly
and convincingly established. In 2003, Rule 404(b) was amended to confirm the “clear and
convincing” requirement explicated in Parton. See Tenn. R. Evid. 404(b)(3) & 2003
Advisory Commission cmt.
Trial courts have been encouraged to take a “restrictive approach of [Rule] 404(b) . . .
because ‘other act’ evidence carries a significant potential for unfairly influencing a jury.”
State v. Dotson, 254 S.W.3d 378, 387 (Tenn. 2008) (second alteration in original) (quoting
State v. Bordis, 905 S.W.2d 214, 227 (Tenn. Crim. App. 1995)) (internal quotation marks
omitted). In Old Chief v. United States, the United States Supreme Court pointed out that
“‘the risk that a jury will convict for crimes other than those charged—or that, uncertain of
guilt, it will convict anyway because a bad person deserves punishment—creates a prejudicial
effect that outweighs ordinary relevance.’” 519 U.S. 172, 181 (1997) (quoting United States
v. Moccia, 681 F.2d 61, 63 (1st Cir. 1982)); see also Michelson v. United States, 335 U.S.
469, 475-76 (1948). In Dotson, this Court reaffirmed the policy of exclusion:
The rationale behind the general rule is that admission of other wrongs carries
with it the inherent risk of the jury convicting a defendant of a crime based
upon his or her bad character or propensity to commit a crime, rather than the
strength of the proof of guilt on the specific charge. . . . As this Court has
consistently cautioned, the jury should not “be tempted to convict based upon
a defendant’s propensity to commit crimes rather than . . . evidence relating to
the charged offense.”
254 S.W.3d at 387 (second alteration in original) (quoting Spicer v. State, 12 S.W.3d 438,
448 (Tenn. 2000)).
Although appellate courts have repeatedly emphasized a restrictive approach to Rule
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404(b), the decision of a trial court to admit or exclude evidence will not be overturned on
appeal absent an abuse of discretion, provided that the court adhered to the Rule’s procedure.
Kiser, 284 S.W.3d at 288 (citing State v. DuBose, 953 S.W.2d 649, 652 (Tenn. 1997)). The
terms of Rule 404(b) direct the trial court to first hold a hearing outside the presence of the
jury to assess the criteria set forth in the Rule. Tenn. R. Evid. 404(b)(1). This Court has
previously observed that a trial court may, as in this instance, conduct the required hearing
prior to trial. State v. Gilley, 173 S.W.3d 1, 6 (Tenn. 2005). Nevertheless, because “the Rule
404(b) criteria . . . require consideration of the evidence at trial,” we have cautioned that “if
pretrial evidentiary rulings are made, they may need to be reconsidered or revised based on
the evidence presented at trial.” Id.
Here, as our Court of Criminal Appeals acknowledged, see Jones, 2013 WL 1697611,
at *40, and as the Defendant concedes, the trial court complied with the Rule 404(b)
procedure by hearing the proposed evidence prior to trial, considering each of the criteria in
light of the evidence presented at trial, and making the required findings prior to admitting
the evidence. Abuse of discretion is, therefore, our standard of review. “‘A court abuses its
discretion when it applies an incorrect legal standard or its decision is illogical or
unreasonable, is based on a clearly erroneous assessment of the evidence, or utilizes
reasoning that results in an injustice to the complaining party.’” State v. Adams, 405 S.W.3d
641, 660 (Tenn. 2013) (quoting Wilson v. State, 367 S.W.3d 229, 235 (Tenn. 2012)).
1. Existence of a Material Issue
The first criterion under Rule 404(b) is whether “a material issue exists other than
conduct conforming with a character trait.” Tenn. R. Evid. 404(b)(2). “[E]vidence that the
defendant committed another crime is admissible only if the ground for relevance”—in this
instance, the identity of the perpetrator—“is actually being contested in the case on trial.”
Bunch, 605 S.W.2d at 230. If a defendant’s identity is conclusively established by other
proof at trial, then identity is no longer at issue and the evidence of the other crime should
not be admitted. White v. State, 533 S.W.2d 735, 739 (Tenn. Crim. App. 1975) (quoting
Warren v. State, 156 S.W.2d 416, 418 (Tenn. 1941)).
Here, the trial court waited until it had heard the majority of the evidence pertaining
to the investigation of the James murders before ruling that identity was a material issue
because the Defendant had “vigorously challenged” Young’s testimony that the Defendant
committed the murders and had raised the issue of other “possible suspects.” The Court of
Criminal Appeals affirmed this determination. Jones, 2013 WL 1697611, at *41. The
Defendant concedes that identity was a material issue at trial. We agree. By challenging the
proof that he murdered Mr. and Mrs. James and by attempting to shift the blame to others,
most notably Young, the Defendant placed identity at issue. Moreover, the evidence did not
establish the Defendant’s identity so conclusively as to eliminate the issue as a jury question.
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See White, 533 S.W.2d at 739.
2. Clear and Convincing Proof of the Other Crime
The second criterion under Rule 404(b) is whether the Defendant’s commission of the
other crime was established by clear and convincing evidence. See Tenn. R. Evid. 404(b)(3).
The Defendant contends that the evidence established only that: (1) the Defendant knew
Perez; (2) the Defendant was in the vicinity of Perez at the time of his death; and (3) Perez
checked into the Super 8 Motel accompanied by a skinny, African-American male. Thus,
he claims that the State failed to present clear and convincing evidence that he committed the
Perez murder. We disagree.
To meet the clear and convincing standard, the trial court must determine that the
evidence offered to show the defendant’s involvement in the other crime is not “‘vague and
uncertain.’” State v. Fisher, 670 S.W.2d 232, 236 (Tenn. Crim. App. 1983) (quoting Wrather
v. State, 169 S.W.2d 854, 858 (Tenn. 1943)). The clear and convincing evidence standard
is more exacting than preponderance of the evidence but less exacting than beyond a
reasonable doubt, and it requires that “‘there [be] no serious or substantial doubt about the
correctness of the conclusions drawn from the evidence.’” State v. Kennedy, 152 S.W.3d 16,
18 (Tenn. Crim. App. 2004) (quoting Hodges v. S.C. Toof & Co., 833 S.W.2d 896, 901 n.3
(Tenn. 1992)); see also Little, 402 S.W.3d at 214 n.7 (observing that “Tennessee is different
from most state and federal jurisdictions that evaluate the admissibility of prior crime
evidence by a preponderance of the evidence standard”). The burden is on the State to
establish by clear and convincing evidence that: (1) another crime was committed; and (2) the
crime was committed by the defendant. White, 533 S.W.2d at 743 (quoting Wrather, 169
S.W.2d at 858). “Only thus can identification, or other proof of guilt, of the accused in the
pending case be aided by evidence of the [other] crime.” Id. (quoting Wrather, 169 S.W.2d
at 858).
As indicated, a criminal offense may be established exclusively by circumstantial
evidence. Dorantes, 331 S.W.3d at 379. This principle also applies in the context of
determining whether another crime has been established by clear and convincing evidence.
Accordingly, we may not substitute our own inferences for those drawn by the trial court,
which acted as the finder of fact in determining whether the proof of the Perez murder was
clear and convincing. See id. (“On appeal, the court may not substitute its inferences for
those drawn by the trier of fact in circumstantial evidence cases.”); see also State v. Rice, 184
S.W.3d 646, 662 (Tenn. 2006) (noting that “the weight to be given to circumstantial
evidence, . . . ‘[t]he inferences to be drawn from such evidence, and the extent to which the
circumstances are consistent with guilt and inconsistent with innocence, are questions
primarily for the [finder of fact]’” (second alteration in original) (quoting Marable v. State,
313 S.W.2d 451, 457 (Tenn. 1958))).
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At the Rule 404(b) hearing, the State presented significant evidence placing the
Defendant in both temporal and physical proximity of the Perez murder. Detective Reyes
testified that on August 25, 2003, he initiated a traffic stop near Melbourne, Florida, of a
Dodge Aries K-car driven by Young. During the stop, the Defendant pulled behind the
detective’s vehicle in his Lincoln and acknowledged that he owned the Dodge. Because
Young was subsequently arrested, the Dodge was left parked on the side of the interstate,
approximately five miles from the Super 8 Motel, and the Defendant was instructed to later
retrieve the vehicle. Perez was last seen alive the following day at approximately 1:00 p.m.
when Patel, the manager of the Super 8 Motel, observed Perez exit a white, mid-sized
sedan—a description matching both of the Defendant’s vehicles—and enter the motel office.
Thereafter, Perez returned to the vehicle and an African-American male accompanied him
into the motel. Perez’s body was discovered the next day.
Notably, the Defendant admitted that he had worked with Perez, that they had
associated with each other outside of work, and that Perez had been in both the Defendant’s
Dodge and his recently purchased Lincoln. Most importantly, a Nike shoe print matching
the size, shape, and tread design of a shoe recovered from the Defendant’s Lincoln was lifted
from the motel room’s bathroom. FDLE crime analyst Emily Strickland, a footprint
impression expert, testified that two unique individual characteristics on the shoe matched
the latent prints from the Perez crime scene, indicating a high probability that the footprint
impression from the motel room was made by the Defendant’s shoe.
Based on this proof, we conclude that the trial court did not abuse its discretion by
determining that the evidence of the Perez murder was clear and convincing. The evidence,
while circumstantial, was neither vague nor uncertain, see Fisher, 670 S.W.2d at 236, and it
provided a sufficient basis for the trial court to conclude, free from serious or substantial
doubt, see Kennedy, 152 S.W.3d at 18, that the Defendant murdered Perez.6
6
The State urges this Court to consider the testimony of Catherine Theisen, the mitochondrial DNA
specialist who determined that the DNA from pubic hairs found in the motel room was consistent with the
Defendant’s DNA and is of a type found in only a small percentage of the population. As noted by the Court
of Criminal Appeals, this evidence was presented for the first time at trial after the trial court’s Rule 404(b)
ruling and was not available to the trial court in assessing the sufficiency of the evidence of the Perez murder.
Jones, 2013 WL 1697611, at *43. We agree with the Court of Criminal Appeals that because the trial court
must base its Rule 404(b) findings upon other crime evidence heard outside of the presence of the jury, we
must refrain from considering additional evidence presented to the jury after the trial court’s Rule 404(b)
ruling. See State v. Roshell, No. M2007-02358-CCA-R3-CD, 2009 WL 890875, at *8 (Tenn. Crim. App.
Apr. 2, 2009) (limiting review of the evidence to “‘the evidence presented at the jury[-]out hearing’”
(alteration in original) (quoting Dubose, 953 S.W.2d at 653)), perm. app. denied (Tenn. Aug. 17, 2009).
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3. Probative Value Versus Danger of Unfair Prejudice
The third and final criterion for the trial court to consider during a Rule 404(b) hearing
is the probative value of the other crime evidence versus the danger of unfair prejudice that
accompanies the admission of such evidence. State v. Sexton, 368 S.W.3d 371, 405 (Tenn.
2012). This balancing test, under the plain language of the Rule, requires that evidence of
another crime be excluded if the danger of unfair prejudice “outweigh[s]” the probative
value. Tenn. R. Evid. 404(b)(4); cf. Tenn. R. Evid. 403 (allowing the admission of relevant
evidence so long as the danger of unfair prejudice does not “substantially outweigh[]” the
probative value of the evidence). “Th[is] restrictive approach of Rule 404(b) recognizes that
evidence of other crimes, wrongs[,] or acts carries a significant danger of unfair prejudice.”
DuBose, 953 S.W.2d at 654. The term “unfair prejudice” has been defined as “‘[a]n undue
tendency to suggest decision on an improper basis, commonly, though not necessarily, an
emotional one.’” Id. (alteration in original) (quoting State v. Banks, 564 S.W.2d 947, 951
(Tenn. 1978)). When the other crime is similar to the charged offense in the pending case,
the danger of unfair prejudice is especially prevalent, increasing the likelihood that “‘[the]
jury would convict on the perception of a past pattern of conduct, instead of on the facts of
the charged offense.’” State v. Mallard, 40 S.W.3d 473, 488 (Tenn. 2001) (quoting Theus
v. State, 845 S.W.2d 874, 881 (Tex. Crim. App. 1992)).
The trial court must weigh these concerns of unfair prejudice against any probative
value of the proffered evidence, which will depend upon the actual need for the evidence in
light of the issues at trial and the other evidence available to the State. State v. Burchfield,
664 S.W.2d 284, 287 (Tenn. 1984) (quoting Shockley v. State, 585 S.W.2d 645, 653 (Tenn.
Crim. App. 1978)). Where, as here, the material issue at trial is the identity of the defendant,
[t]he probative value of evidence of other crimes . . . depends upon the extent
to which it raises an inference that the perpetrator of the prior offenses was the
perpetrator of the offense in issue. Both the existence and the strength of an
inference proceeds through an evaluation of the similarities between the prior
offense and the charged crime. Thus, if the characteristics of both the prior
offense and the charged offense are not in any way distinctive, but are similar
to numerous other crimes committed by persons other than the defendant, no
inference of identity can arise. An inference of identity from prior crimes can
only arise when the elements of the prior offense and the charged offense,
singly or together, are sufficiently distinctive to warrant an inference that the
person who committed the prior offense[] also committed the offense on
trial. . . . The probative value of evidence of other crimes on the issue of
identity always depends upon the strength of the inference; when the inference
of identity is weak, evidence of prior crimes should be excluded because under
such circumstances the prejudicial effect of the evidence inevitably outweighs
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the probative value of that evidence.
Bunch, 605 S.W.2d at 230 (fourth alteration in original) (emphasis added) (quoting United
States v. Powell, 587 F.2d 443, 448 (9th Cir. 1978)).
Although the evidence of the other crime need not be identical to the evidence of the
charged offense, for other crime evidence to have probative value it must bear a sufficient
connection to the issue of identity so as to establish the defendant’s commission of “signature
crimes.” To meet this threshold, the similarities of the crimes must do more than simply
outweigh their differences—there must be a “‘highly distinctive common mark’” between
the crimes. Id. at 231 (quoting People v. Cavanaugh, 444 P.2d 110, 117 (Cal. 1968)); see
also State v. Moore, 6 S.W.3d 235, 240 (Tenn. 1999) (“Before multiple offenses may be said
to reveal a distinctive design, and therefore give rise to an inference of identity, the ‘modus
operandi employed must be so unique and distinctive as to be like a signature.’” (quoting
State v. Carter, 714 S.W.2d 241, 245 (Tenn. 1986))). The test, therefore, is not whether the
evidence demonstrates that the defendant committed both crimes, but whether the defendant
used a peculiar and distinctive method in committing the crimes. See Young v. State, 566
S.W.2d 895, 897 (Tenn. Crim. App. 1978). For example, in Harris v. State, this Court
recognized that
a particular strat[a]gem or method [may have] such unusual particularities that
reasonable men can consider that it would not likely be employed by different
persons. Many men commit murder, but Jack the Ripper used his knife in a
manner so peculiar that when his crimes were viewed together there could be
little doubt that they were committed by the same man. Merely the fact,
however, that a series of such crimes may be committed with a knife will not
render them unusual enough to identify the perpetrator of one as the
perpetrator of the others.
227 S.W.2d 8, 11 (Tenn. 1950) (citation omitted).
Thus, the focus of our inquiry is whether the trial court erred when it determined that
the probative value of the evidence of the Perez murder outweighed the danger of unfair
prejudice because the details of the crime were sufficiently distinctive to raise an inference
that the Defendant committed the James murders. The State contends, and the trial court
found, that strangulation, binding of the victims, removal of the bindings, multiple incisions
to the throat, removal of clothes from some of the victims, placement of the bodies face
down, and cleaning of the scene after the crime, in combination, constitute a signature crime.
Because this finding would require us to ignore numerous differences between the murders
as well as the expert forensic testimony offered by the State, it is our assessment based upon
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our extensive review of prior decisions of this Court over a number of years, that the trial
court’s ruling was “based on a clearly erroneous assessment of the evidence.” See Adams,
405 S.W.3d at 660. We hold, therefore, that the trial court abused its discretion by admitting
the evidence of the Perez murder.
Although the trial court acknowledged that there were some differences between the
Perez and James murders, it found that the similarities were distinct enough to establish that
the same person committed both crimes. The trial court pointed to the testimony of Dr.
O’Brian Cleary Smith as compelling such a conclusion:
Dr. Smith, the former [M]edical [E]xaminer for Shelby County, testified
that death as a result of knife wounds comprise[s] a minority of homicides and
even fewer cases have both incised wounds to the neck and strangulation. Dr.
Smith further stated that fewer still have incised wounds to the neck;
strangulation; binding; and removal of binding prior to discovery of the body.
He stated that taking these circumstances in connection with the fact that the
victims were found lying face down; the crime scene appear[ed] to be “cleaned
up”[;] and the victims were robbed by someone known to them, made the
number of similar cases shrink even further.
Unfortunately, however, the record demonstrates that the trial court misconstrued
portions of the evidence and neglected to accord appropriate weight to the significant
differences between the Perez murder and the James murders. As Judge McMullen observed
in her dissenting opinion:
The charged offense, the [James] murders, occurred in a suburban home and
involved two elderly victims. It was perpetrated by two individuals[—]an
accomplice, Young, and the Defendant. The uncharged offense, the [Perez]
murder, occurred at a motel located in a high crime area and involved a young
male victim and an[] unidentified female. The [Perez] murder also involved
evidence of a sexual assault, while the [James] murders did not.
Specifically, the [Shelby County] [M]edical [E]xaminer testified that
both of the victims in the instant case died as a result of multiple injuries. Mr.
James suffered incised wounds to the neck, a stab wound to his neck, a broken
hyoid bone, blunt force injuries to his chest, fractured parts of the front neck
bone, and rib fractures. There was also evidence suggesting that (1) his
wounds were inflicted after he was killed, (2) possible strangulation, and
(3) ligatures or bindings on his extremities. Mr. James’s body was found “in
repose on his right side.” In regard to Ms. James, the medical examiner
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testified that she suffered multiple incised wounds to the neck, incised wounds
to forearms, and possible strangulation. Asked whether the linear marks on
her neck were caused by manual or ligature strangulation, the medical
examiner said, “it may [have been] some hard object that was used around the
neck, an object could be held against the neck with enough force to compress
the neck and leave the marks on the neck.” However, other than a “cut,” he
found no evidence of bondage, and her hyoid bone was intact. Although Ms.
James’s body was found face down, the medical examiner opined that her body
had been moved “in a position other than that in which she was found at the
time that the neck wounds were produced.”
Jones, 2013 WL 1697611, at *57 (McMullen, J., dissenting).
Moreover, the applicable standard focuses on the distinctiveness of the crimes, not a
mere assessment of similarities or an existence of rarity. State v. Roberson, 846 S.W.2d 278,
280 (Tenn. Crim. App. 1992) (“[M]ere similarity in the manner in which two crimes are
committed does not produce the relevance necessary for admission—uniqueness does.”
(emphasis added)). During the Rule 404(b) hearing, Dr. Smith unequivocally rejected all
indications that the methodology of the murders was unique or distinctive. Specifically, on
cross-examination, he testified as follows:
Q: So, death by slashing the throat has become not unusual. Correct?
A: That’s correct.
Q: What about asphyxiation by possible strangulation. Is that unusual?
A: No, sir. That’s probably a little bit more common than throat cutting.
Q: What about the two of those combined. Is that unusual?
A: No.
Q: Bondage. . . . Is bondage unusual?
A: No.
....
Q: What about the three of those combined. Is that unusual?
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A: No.
....
Q: So [the bindings on Mr. James] had been removed?
A: Yes, sir.
Q: Is that unusual?
A: No.
Defense counsel then questioned Dr. Smith about the multiple lacerations to the neck:
Q: . . . Is there anything unusual at first glance to these—in the autopsy as far
as the incised wounds, anything out of the ordinary that you would see in this
sort of homicide?
A: No.
Q: Was there an efficiency to the incised wounds in any way that would
indicate any sort of training or technique?
A: No.
....
Q: So four strokes across the same part of [Mr. James’] neck in layman’s
terms?
A: Yes, sir.
Q: But that’s not unusual?
A: No.
Q: Okay. Can you explain?
A: Well, in the absence of a surgical instrument, cutting or incising the skin
with a knife is very inefficient. . . . And when the cutting edge is applied to the
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skin surface and then dragged across, the skin is going to move and you lose
the power of the knife so that it’s more common than not to see a—an incised
wound may first open up the skin and then as the knife is reapplied in a slightly
different area, it goes into the—cuts its way into the already open area from the
first or prior incision, and then once it gains access to the deeper tissues, it cuts
with more efficiency. . . . To find a single application of a knife in a throat
cutting incident would be unusual.
Although Dr. Smith conceded that the number of murders involving incisions, bondage,
strangulation, bindings removed, and cleaning of the crime scene constituted a minority of
all of the murders in Shelby County, he explained that there was nothing unusual about the
methods employed—even in combination. Moreover, as Judge McMullen pointed out in her
dissent, not all of the victims were found lying face down, as the trial court mistakenly
observed.
Our prior case law includes numerous decisions which, as in this instance, involved
offenses with similarities that did not rise to the level of a signature crime. For example, in
Harris, 227 S.W.2d at 9, the defendant was charged with rape, and the trial court admitted
evidence that he had committed another rape one week earlier. This Court noted multiple
similarities in the two offenses, including their temporal proximity, the fact that both crimes
were rapes committed by forcible coercion, and the use of a knife in both instances. Id. at
11. Nevertheless, because there were also significant differences—including the nature of
the sexual acts committed and the location of the crimes—the Court held that the “methods
pursued were not so peculiar as to” justify admission of the other crime evidence on the issue
of identity. Id. Similarly, in State v. Toliver, 117 S.W.3d 216, 227 (Tenn. 2003), the Court
analyzed whether separate incidents of aggravated child abuse shared a similar modus
operandi such that they qualified as signature crimes.7 Again, the Court observed numerous
similarities between the two crimes: both involved the same victim (the defendant’s step-
son), both involved the defendant striking the victim on the buttocks with a braided extension
cord, and both arose from the victim receiving poor grades. Id. at 229. Despite these
similarities, the Court highlighted the differences in the methods employed to commit the
crimes, which included the fact that in one instance the extension cord had been braided with
wire and wrapped with duct tape, whereas in the other instance the victim had been required
to lean over a barrel and the defendant had wrapped the extension cord around the victim’s
neck, jerking him around the room. Id. at 229-30. Because the method employed did not
“have ‘such unusual particularities that reasonable men can conclude that it would not likely
7
Although Toliver involved the question of whether the two cases should have been severed rather
than jointly tried, it employed the same standard in its signature crime analysis. Id. at 230 (citing Tenn. R.
Evid. 404(b)).
-35-
be employed by different persons,’” the Court concluded that “the method employed in
committing the offenses [did] not constitute a modus operandi so unique and distinctive as
to be comparable to a signature.” Id. at 229 (quoting State v. Shirley, 6 S.W.3d 243, 248
(Tenn. 1999)); see also State v. Bobo, 724 S.W.2d 760, 764 (Tenn. Crim. App. 1981)
(excluding evidence of a prior armed robbery because, although sharing many characteristics
with the armed robbery charged, there was “nothing unique about any of” the similarities,
which included the robber using a pistol, being unmasked, wearing a coat and a hat, and
targeting a Winn-Dixie grocery store); Young v. State, 566 S.W.2d 895, 899 (Tenn. Crim.
App. 1978) (“The test is not whether there was evidence that a defendant committed both
crimes, but whether there was a unique method used in committing the crimes. It is not
enough that the appellant was wearing the same clothing during the commission of the two
crimes, unless in some way, his clothing was a part of the modus operandi.”).
In contrast, our cases allowing other crime evidence under a signature crime theory
demonstrate the type of unique modus operandi that is lacking in this instance. In Warren,
156 S.W.2d at 419, a robbery case, this Court affirmed the trial court’s admission of evidence
of another robbery with several striking similarities. In particular, the two robberies occurred
within a few nights of one another at the same place and time of night, and in each instance
the victims “were robbed by a man dressed in a black cap and overalls, with his face smeared
with dark grease or paint, carrying a pistol in one hand and a flash light in the other, who had
an impediment in his speech.” Id. at 417. In State v. Wooden, 658 S.W.2d 553, 557-58
(Tenn. Crim. App. 1983), abrogated on other grounds by State v. Dyle, 899 S.W.2d 607, 612
(Tenn. 1995), our Court of Criminal Appeals found the signature crime standard satisfied as
to two sex offenses with the following similarities: each victim was a young, white female
living alone in an apartment; the attacker covered the head of each victim or forced her to
turn around so that she could not see him; the attacker forced each victim to submit to
cunnilingus and then vaginal intercourse; and the attacker demanded that each victim rub his
nipples as he performed vaginal intercourse.8
8
Like Tennessee, other jurisdictions set a high bar for the admission of other crime evidence on a
signature crime theory. Compare, e.g., Knox v. State, 621 So. 2d 403, 405 (Ala. Crim. App. 1993) (finding
no signature modus operandi in two robberies despite the fact that the victims of both robberies were cab
drivers, both crimes occurred after the cab driver picked up the robber, and the robber in both instances
brandished a gun), and Diffee v. State, 894 S.W.2d 564, 568 (Ark. 1995) (finding no signature modus
operandi in a first degree murder and a prior uncharged incident despite the fact that both incidents involved
the use of an ice pick, both occurred in or near the defendant’s residence, and both victims were members
of the defendant’s family), with State v. Porambo, 544 A.2d 870, 874 (N.J. Super. Ct. App. Div. 1988)
(finding a signature modus operandi in two armed robberies because in both instances the robber gained entry
into a private residence by posing as public safety official and disguised himself using false facial hair,
including a “fake mustache[]” that “was distinctive in appearance”).
-36-
As these authorities demonstrate, while there are similarities between the Perez
murder and the James murders, those similarities fail to establish a modus operandi that is
comparable to a signature. The trial court erred, therefore, by determining that the evidence
of the Perez murder was so distinctive that it raised an inference that the Defendant
committed the James murders.
In light of our conclusion that the State failed to establish the Perez murder as a
signature crime that could be used to prove the Defendant’s identity in the James murders,
the admission of the evidence regarding the Perez murder was profoundly prejudicial. By
allowing the evidence of the Perez murder, a crime for which the Defendant had not been
charged, the trial court created an opportunity for the jury to infer that the Defendant
committed the uncharged murder and, therefore, must have committed the murders for which
he was on trial. See Dotson, 254 S.W.3d at 387 (“When the defendant’s prior bad acts are
similar to the crime for which the defendant is on trial, the risk of unfair prejudice is even
higher. As this Court has consistently cautioned, the jury should not ‘be tempted to convict
based upon a defendant’s propensity to commit crimes rather than . . . evidence relating to
the charged offense.’” (alteration in original) (quoting Spicer, 12 S.W.3d at 448)). Although
the trial court gave a limiting instruction to the jury, a substantial amount of evidence was
presented regarding the Perez murder. The presentation of the evidence lasted two days and
included inherently prejudicial testimony about a sexual encounter at the Perez crime scene,
which was absent from the James murders. In the absence of sufficiently distinctive
characteristics amounting to a signature crime, the danger of unfair prejudice created by the
detailed evidence of the Perez murder clearly outweighed any probative value.
C. Harmless Error
Because the evidentiary error here is neither structural nor constitutional, our harmless
error analysis is governed by Tennessee Rule of Appellate Procedure 36(b), which provides
that “[a] final judgment from which relief is available and otherwise appropriate shall not be
set aside unless, considering the whole record, error involving a substantial right more
probably than not affected the judgment or would result in prejudice to the judicial process.”
This standard “‘recognizes that . . . a person convicted of a crime as a result of an essentially
fair trial is not entitled to have his or her conviction reversed based on errors that, more
probably than not, did not affect the verdict or judgment.’” Sexton, 368 S.W.3d at 429
(quoting State v. Ferrell, 277 S.W.3d 372, 380 (Tenn. 2009)). Our harmless error analysis
“does not turn upon the existence of sufficient evidence to affirm a conviction or even a
belief that the jury’s verdict is correct. To the contrary, the crucial consideration is what
impact the error may reasonably be taken to have had on the jury’s decision-making.” State
v. Rodriguez, 254 S.W.3d 361, 372 (Tenn. 2008) (citations omitted).
The evidence connecting the Defendant to the James murders consisted primarily of
-37-
the testimony of Young, an accomplice to the murders. No other witness testified as to the
Defendant’s presence at the crime scene. No forensic evidence tied him to the James
murders. Therefore, the evidence of the James murders, although sufficient to support the
convictions, is not so overwhelming as to preclude the grant of a new trial. Moreover, as
stated previously, the improperly admitted evidence of the Perez murder was extensive.
Hardly any evidence in a murder trial could be more prejudicial than evidence that the
Defendant committed another murder. In consequence, we are constrained to hold that the
erroneous admission of the evidence surrounding the Perez murder more probably than not
affected the outcome of the trial. We must, therefore, reverse the convictions and remand
for a new trial.
D. Evidence of Perez Murder as Contextual Background
In addition to allowing the evidence of the Perez murder as proof of the Defendant’s
identity, the trial court observed the “nearly inextricable investigative connection” between
the Perez murder and the James murders, indicating that “it may be necessary to admit at
least portions of proof, relating to the Perez murder, in order to create a complete picture for
the jury of the investigation conducted by the Bartlett authorities.” Because this issue is
likely to recur on remand, we will briefly address the use of contextual background evidence
that involves other crimes, wrongs, or acts.
As discussed, Tennessee Rule of Evidence 404(b) prohibits the use of other crime
evidence “to prove the character of a person in order to show action in conformity with the
character trait,” although such evidence “may . . . be admissible for other purposes.” This
Court has held that one of the “other purposes” for which evidence of another crime may be
admitted is to provide “contextual background.” State v. Gilliland, 22 S.W.3d 266, 272
(Tenn. 2000). Not all background evidence, however, will be admissible, and trial courts
must strike a careful balance between evidence that will provide context for the jury and
evidence that will only tend to show a defendant’s propensity to commit crimes. Id. Thus,
within the framework of Rule 404(b), the proper analysis is as follows:
[W]hen the [S]tate seeks to offer evidence of other crimes, wrongs, or acts that
is relevant only to provide a contextual background for the case, the [S]tate
must establish, and the trial court must find, that (1) the absence of the
evidence would create a chronological or conceptual void in the [S]tate’s
presentation of its case; (2) the void created by the absence of the evidence
would likely result in significant jury confusion as to the material issues or
evidence in the case; and (3) the probative value of the evidence is not
outweighed by the danger of unfair prejudice.
Id.
-38-
We acknowledge that there exists significant overlap between the investigations into
the Perez and James murders, including crucial breakthroughs in the James murders during
the investigation into the Perez murder. The various law enforcement agencies in Florida and
Tennessee worked closely to establish the time lines and certain details of both cases. For
that reason, as the trial court observed, it may become necessary to admit at least some
portions of the evidence relating to the investigation of the Perez murder in order to alleviate
potential confusion caused by a chronological or conceptual void in the explanation of the
James murders. We caution the trial court, however, that if such evidence is offered by the
State to provide contextual background, the evidence must be carefully scrutinized to ensure
that the admissibility requirements of Rule 404(b) and Gilliland are met. The use of limiting
instructions to the jury would also be appropriate in this situation. See id. at 273 (“[M]ultiple
limiting instructions to the jury from the trial court worked to alleviate the prejudicial effect
of the [contextual background] evidence, and we also presume that juries follow the
instructions given to them by the trial court.”). It is the responsibility of the Defendant,
however, to request the appropriate limiting instructions. See Little, 402 S.W.3d at 210.
E. Mandatory Death Sentence Review
By statute, appellate review of a sentence of death has “priority over all other cases”
and requires determinations as to whether:
(A) The sentence of death was imposed in any arbitrary fashion;
(B) The evidence supports the jury’s finding of statutory aggravating
circumstance or circumstances;
(C) The evidence supports the jury’s finding that the aggravating circumstance
or circumstances outweigh any mitigating circumstances; and
(D) The sentence of death is excessive or disproportionate to the penalty
imposed in similar cases, considering both the nature of the crime and the
defendant.
Tenn. Code Ann. § 39-13-206(c)(1).
As indicated, the erroneous admission of the evidence relating to the Perez murder
requires a new trial in this case. Accordingly, we will not evaluate the arbitrariness of the
Defendant’s death sentence, the sufficiency of the evidence supporting the aggravating
circumstances, whether the aggravating circumstances outweighed the mitigating
circumstances, or whether the Defendant’s sentence of death was disproportionate to the
-39-
same penalty imposed in other cases. Cf. Sexton, 368 S.W.3d at 428-29.9 Our ruling does
not preclude the State from seeking the death penalty on remand. See Smith v. State, 357
S.W.3d 322, 328 (Tenn. 2011).
III. Conclusion
The trial court committed prejudicial error by admitting the evidence of the Perez
murder. The convictions are reversed, and the case is remanded to the trial court for
additional proceedings consistent with this opinion. Costs of this appeal are taxed to the
State of Tennessee.
_____________________________
GARY R. WADE, CHIEF JUSTICE
9
Our reversal of the Defendant’s convictions also pretermits all other issues raised on appeal but
not addressed in this opinion.
-40- | 01-03-2023 | 09-25-2014 |
https://www.courtlistener.com/api/rest/v3/opinions/1558130/ | 22 So.3d 622 (2009)
A. DUDA AND SONS, INC., Appellant,
v.
ST. JOHNS RIVER WATER MANAGEMENT DISTRICT, Appellee.
No. 5D08-2269.
District Court of Appeal of Florida, Fifth District.
October 2, 2009.
Rehearing Denied December 1, 2009.
Kenneth G. Oertel and M. Christopher Bryant, of Oertel, Fernandez, Cole & Bryant, P.A., Tallahassee, for Appellant.
William H. Congdon, Deputy General Counsel, Palatka, for Appellee.
PER CURIAM.
A. Duda and Sons, Inc., ("Duda"), appeals from a final order of the St. Johns River Water Management District, ("District"), adopting the recommended order of an administrative law judge, ("ALJ"), of the Division of Administrative Hearings, who agreed with the District's staff position that Duda should be required to apply for necessary after-the-fact permits for certain enforcement ditches. We affirm in part, reverse in part, and remand for additional proceedings consistent with this opinion, and with our opinion in A. Duda and Sons, Inc. v. St. Johns River Water Management District, 17 So.3d 738 (Fla. 5th DCA 2009) ("Duda I").
The relevant factual history is explained in Duda I. In that case, Duda challenged the District's rules and policies interpreting the agricultural exemption contained in section 373.406(2), Florida Statutes. The panel in Duda I agreed, in part, that the District had incorrectly interpreted the statute. In this case, the ALJ applied the now-invalidated statutory interpretation to determine that Duda did not qualify for the agricultural exemption. Accordingly, *623 this matter must be remanded for additional fact-finding so that the agricultural exemption can be applied consistently with the statute as explained in Duda I.[1]
However, Duda I did not address the interplay between section 373.406(2) and language from the Warren S. Henderson Wetlands Protection Act, chapter 84-79, Laws of Florida, now codified at sections 403.927(2) & (4)(a), Florida Statutes. Those provisions virtually eliminate the agricultural exemption as it applies to alterations impacting wetlands. Under section 403.927, agricultural activities that impede or divert the flow of surface waters even incidentally are not exempt from regulation if they impact wetlands. Id. In the order on appeal, the District found that Duda's enforcement ditches impacted at least 500 acres of wetlands, a finding clearly supported by competent, substantial evidence. Accordingly, it appears that the District's ultimate conclusion that Duda must either restore the impacted wetlands or apply for after-the-fact permits is correct at least with respect to that portion of the ditch system impacting wetlands.[2]
AFFIRMED IN PART; REVERSED IN PART; REMANDED FOR ADDITIONAL PROCEEDINGS.
GRIFFIN, TORPY and LAWSON, JJ., concur.
NOTES
[1] Duda reads a portion of the final order as determining that the "predominant purpose" of the enforcement ditches is to control groundwater (as the term "predominant" is defined in Duda I). If true, this would preclude application of the agricultural exemption with respect to any ditch not impacting wetlands. However, the findings referenced by Duda in support of this argument appear to us to be discussing Duda's subjective reason for digging the ditches, which is irrelevant to the statutory analysis, as explained in Duda I.
[2] To aid the parties on remand, we note that we find no merit to Duda's arguments that the ALJ applied an incorrect evidentiary standard or improperly shifted the burden of proof. We also reject Duda's arguments relating to various legal defenses raised as a bar to the District's enforcement action. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558145/ | 22 So.3d 70 (2009)
BIFANO
v.
BRINKLEY.
No. 1D09-1378.
District Court of Appeal of Florida, First District.
October 30, 2009.
Decision without published opinion Certiorari denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558154/ | 22 So.3d 84 (2009)
SHABAZZ
v.
STATE.
No. 2D09-2282.
District Court of Appeal of Florida, Second District.
November 6, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/392325/ | 654 F.2d 415
M. C. HOLLIDAY, Petitioner,v.TODD SHIPYARDS CORPORATION, The Travelers Insurance Company,and Director, Office of Workers' CompensationPrograms, United States Department ofLabor, Respondents.
No. 80-1507.
United States Court of Appeals,Fifth Circuit.
Unit A
Aug. 28, 1981.
James B. Eaton, Houston, Tex., for petitioner.
G. Wesley Urquhart, Houston, Tex., for Todd Shipyards et al.
Marianne D. Smith, Div. of Employee Benefits, Washington, D. C., for respondents.
Petition for Review of an Order of the Benefits Review Board.
Before CHARLES CLARK and GEE, Circuit Judges, and SPEARS,* District Judge.
GEE, Circuit Judge:
1
Appellant was seriously injured in the course of his employment and subsequently sought benefits under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950 (1976) ("Act"). His employer, Todd Shipyards Corporation, and its carrier, Travelers Insurance Company, commenced payment of temporary total disability benefits. The case was tried before an administrative law judge ("ALJ"), who determined that appellant was temporarily totally disabled from May 30, 1975, the day after he sustained the injury, to February 1, 1978, the date he attained maximum medical recovery, and that he was permanently totally disabled thereafter. The Benefits Review Board ("BRB") affirmed the ALJ's decision. In brief and oral argument before this court on March 19, 1981, the appellant sought to have the date of his permanent total disability made retroactive to the date of his injury, some two years and eight months earlier. Appellant's request was made in order to obtain certain annual inflation adjustments in his rate of permanent total disability compensation under section 10(f) of the Act, 33 U.S.C. § 910(f). Under that section, inflation adjustments to benefit levels are available only for claimants who are permanently totally disabled. The appellant challenged the administrative rule relied upon by the ALJ and the BRB by which a total disability becomes permanent only when maximum medical improvement is attained. At oral argument appellee, the director of the Office of Workers' Compensation Programs, United States Department of Labor, supported the appellant's entitlement to section 10(f) adjustments but contended that appellant's method for obtaining those adjustments was incorrect under the Act. Neither the appellant's employer, Todd Shipyards, nor the employer's carrier, Travelers, participated in the appeal before this court or before the BRB. At the suggestion of this court, the parties produced a "Proposal for Determining Permanent Total Disability under the Longshoremen's and Harbor Workers' Compensation Act," which is appended to this opinion. We agree with and adopt the director's proposed alternative method for computing permanent total disability compensation, and we remand to the ALJ for computation of the correct compensation rate in accordance with the parties' proposal.
2
An issue remaining before this court is appellant's counsel's motion for attorneys' fees. Counsel argues that he is entitled to attorneys' fees under section 28 of the Act, 33 U.S.C. § 928, because counsel was "successful in his appeal against the defendants, Benefits and Review Board, the U.S. Department of Labor, Todd Shipyard and Travelers Insurance Company." In the alternative, counsel argues that he is entitled to be paid attorneys' fees from the special fund authorized by section 44 of the Act, 33 U.S.C. § 944.
3
At the outset, we note that counsel's request suffers from certain irregularities. Counsel requests a fee award extending to attorney services before the BRB. As we recently pointed out, however, attorneys' fees for services relating to matters before the BRB "must be set in the first instance by the Board and not by this court." Hole v. Miami Shipyards Corp., 640 F.2d 769, 773 (5th Cir. 1981). This court has stated that it has "neither the authority nor the competence" to ascertain what fees should have been awarded by the BRB. "The statute, in our view, intends each body the hearing examiner, the Board, and the reviewing court separately to assess the worth of the claimant's representation before it." Ayers Steamship Co. v. Bryant, 544 F.2d 812, 814 (5th Cir. 1977). In addition, counsel's motion contains mathematical as well as legal errors.1 Finally, counsel's petition is not a complete statement of the extent and character of necessary work done. While the Act does not establish standards for the courts of appeals to follow in the award of attorneys' fees, this court has followed the lead of the Third Circuit in accepting as guidelines those regulations followed by the BRB. See 20 C.F.R. § 802.203 (1980); Atlantic & Gulf Stevedores, Inc. v. Director, OWCP, 542 F.2d 602, 610 (3d Cir. 1976); Ayers Steamship Co. v. Bryant, 544 F.2d at 814. Counsel's petition does not specify the professional status of the persons doing each category of work; indeed, the character of the work done is scarcely particularized at all. Are we to assume that an attorney commanding an hourly rate of $150 did all of the work involved, including the printing or reproducing of briefs? This is particularly troubling here, given the arguably inflated nature of counsel's fee request.2 Counsel should bear in mind that, to be approved, fees should be "reasonably commensurate with the necessary work done and shall take into account the quality of the representation, the complexity of the legal issues involved, (and) the amount of benefits awarded...." 20 C.F.R. § 802.203(d). These irregularities, however, need not trouble us further, given our determination that counsel is not entitled to attorneys' fees from either the employer under section 28 of the Act or from the United States government under the special fund.
4
Attorneys' fees cannot be assessed against the employer or carrier in this case. Section 28 does not provide for attorneys' fee awards in every case in which the claimant is successful.3 In Hole v. Miami Shipyards Co., 640 F.2d at 774, this court clarified under what circumstances an employer or carrier may be responsible for attorneys' fees:
5
From this comprehensive scheme regulating attorney's fees we discern a congressional intent that when an employer contests its liability for compensation in whole or in part and the claimant is ultimately successful, the employer and not the claimant must pay the claimant's attorney's fees for services necessary to that success "regardless of how close a case might be which is litigated but finally lost by (the employer)."
6
(emphasis added and citation omitted). As we pointed out in Savannah Machine & Shipyard Co. v. Director, OWCP, 642 F.2d 887, 889 (5th Cir. 1981), section 28 authorizes attorneys' fees in two situations only: (a) where the employer refuses to pay any compensation for a work-related injury, and (b) where the employer tenders partial compensation but refuses to pay the total amount claimed. In either case, the claimant must, of course, obtain the services of an attorney to prosecute his claim successfully. Neither situation exists here. The employer and carrier were actively involved only before the ALJ, and the ALJ awarded attorneys' fees against them. Neither the employer nor its carrier participated in the claimant's appeal before the BRB or before this court. They have not contested the claim here or there within the meaning of sections 28(a) or (b).
7
Counsel's claim for fees to be assessed against the special fund also fails for the reasons elaborated by the Ninth Circuit in Director, OWCP v. Robertson, 625 F.2d 873 (9th Cir. 1980). This circuit has not heretofore passed on the question whether the special fund may ever be required to pay attorneys' fees. Savannah Machines & Shipyard Co., 642 F.2d at 890 n.8. After consideration, we are convinced that the Ninth Circuit has given a fair and reasonable interpretation to the question, and we adopt its opinion in Robertson.
8
Under the American Rule, adopted by the federal courts, even successful litigants cannot recover attorneys' fees unless a statute imposes liability or some other exceptional circumstance warrants a departure from the rule. Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975); Noritake Co. v. M/V Hellenic Champion, 627 F.2d 724, 730 (5th Cir. 1980). As the Ninth Circuit pointed out in Robertson, 625 F.2d at 876-77, the statute does not provide for the payment of attorneys' fees from the special fund. Here, as in the Robertson case, none of the established nonstatutory exceptions4 to the American Rule are applicable, and there is no contract between the parties to enforce.
9
The statutory exceptions to the American rule are, as the Supreme Court affirmed in Alyeska, "specific and explicit provisions for the allowance of attorneys' fees under selected statutes granting or protecting various federal rights." 421 U.S. at 260, 95 S.Ct. at 1623. There is no specific and explicit provision for the assessment of attorneys' fees against the special fund under the Act. The list of expressly authorized payments in section 44(j) of the Act, 33 U.S.C. § 944(j), does not include attorneys' fees and makes no mention of section 28.5
10
The Ninth Circuit also drew an important distinction between cases arising under the Longshoremen's Act and the Black Lung Benefits Act, 30 U.S.C. §§ 901-945:
11
Several circuits have held the Black Lung Disability Trust Fund liable for attorney's fees incurred by claimants of black lung benefits whose last coal mine employment terminated prior to 1970. The statute which created that fund, the Federal Coal Mine Health & Safety Act of 1969, 30 U.S.C. § 901 et seq., was amended in 1978, and § 28(a) of the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 928(a), ... was incorporated by reference. A separate section was added, however, providing that references to the employer in the Longshoremen's Act are to be considered to refer to the trustees of the black lung fund. Those circuits which have considered the issue have held that these provisions constitute specific statutory authorization for the award of counsel fees from the fund. Since the trustees of the black lung fund are substituted for the employers in § 28(a) of the Longshoremen's Act, the black lung fund is liable for counsel fees if the conditions precedent to liability set out in § 28(a), i. e., the employer controverts the existence (or) extent (of) liability and the claimant utilizes an attorney in the successful prosecution of his claim, are satisfied. Congress found it necessary to provide for this substitution in order to provide that counsel fees be paid out of the black lung fund; it legislated no such substitution for the Longshoremen's Act, and we will not judicially mandate that such a substitution be made in this case.
12
Robertson, 625 F.2d at 877 n.6 (emphasis added). See also Director v. Black Diamond Coal Mining Co., 598 F.2d 945 (5th Cir. 1979). As the director argues in his brief, the fact that the Black Lung Benefits Act was specifically amended to provide for the award of attorneys' fees from the Black Lung Disability Trust Fund where there was no employer involved is further evidence that Congress did not intend the special fund here to be liable for attorneys' fees under section 28 of the Longshoremen's Act.
13
Appellant's motion for attorneys' fees essentially complains that it is unfair to burden him with the cost of this appeal. As in Robertson, appellant's real dispute is with the American Rule prohibiting the recovery of attorneys' fees by a successful litigant.6 Like the Ninth Circuit, we too are restrained from forging a new exception to the American Rule by the Supreme Court's conclusion in Alyeska, 421 U.S. at 262, 95 S.Ct. at 1624: "(I)t is apparent that the circumstances under which attorney's fees are to be awarded and the range of discretion of the courts in making those awards are matters for Congress to determine." (footnote omitted).
14
Congress has spoken on the subject of attorneys' fee awards under the Act. Only the employer or carrier, and they only in certain cases, are made liable for such fees by section 28; and section 44 does not include attorneys' fees in its list of authorized disbursements from the fund. Congress has not provided that the special fund should provide a convenient "deep pocket" in those cases where an award of attorneys' fees is otherwise unavailable under section 28.7 For this reason, we must deny appellant's request for attorneys' fees.
15
REMANDED.
16
The Director submits that there are three methods of determining a claimant's compensation rate for permanent total disability under the Act. The just method favored by the petitioner would have the claimant receive compensation for temporary total disability until it became clear he was permanently totally disabled. At that time a clt. would be considered to be permanently totally disabled as of the date of injury and would be compensated accordingly. In other words, from May 30, 1975, to September 30, 1975, claimant would receive temporary total disability compensation at the rate of $203.00/week (2/3 of his average weekly wage under § 3 (33) U.S.C. § 908(b)). On October 1, 1975, he would receive the annual adjustment under § 910(f) of approximately 7%. The same would occur on October 1 of 1976 and 1977, bringing claimant's compensation rate up to approximately $246.00/week. In this way claimant receives three years worth of § 910(f) adjustments despite the fact he was not permanently totally disabled under the Act and therefore not yet entitled to these adjustments.
17
The basic flaw in claimant's argument is that it is contrary to both the intent and plain language of the Longshoremen's Act. The statute specifically provides for a period of unadjusted compensation while a condition is stabilizing, i. e., during periods of temporary disability. Once a determination can be made that a claimant is permanently totally disabled he becomes entitled to the annual adjustments under § 910(f). Beyond that time he is not yet entitled to the § 910(f) adjustments because they apply only to permanent total disability and death benefits.
18
Under the second method of computing permanent total disability benefits the claimant receives temporary total disability benefits from May 30, 1975, to February 1, 1978, when he was determined to be permanently totally disabled. As of February 2, 1978, his compensation rate for permanent total disability would be based on his initial compensation rate of $203.00/week. This alternative the Director agrees is both contrary to and frustrates the purpose of § 910(f) and the claimant would begin his compensation rate for permanent total disability approximately $46.00/week short as claimant alleges.
19
There is a third method of computing the compensation as was discussed in oral argument this morning. Under this alternative the claimant receives temporary total disability compensation without adjustment from May 30, 1975, to February 1, 1978, the date his permanent total disability was determined. When the compensation rate changes from temporary total to permanent total disability as of February 2, 1978, the compensation rate for permanent total disability should include the intervening percentage increases under § 910(f). In other words, on the date the compensation rate changes to permanent total disability compensation, the rate would be at approximately $246.00/week instead of $203.00/week.
20
For the past 54 years under the Longshoremen's Act disability has been considered to be temporary until a claimant either receives and returns to work or becomes permanently disabled. This is the basic compensation scheme set forth by Congress and it has been applied in this manner both judicially and administratively.
21
Keeping this basic compensation scheme in mind, the Director submits that the third alternative is more in keeping with Congressional intent and is consistent with the way Sections 908(a) and 908(b) of the Act have been construed and applied and also serves the purpose of § 910(f).
22
If this Court agrees with the Director's proposed alternative computation of permanent total disability compensation as it seemed at oral argument, then the Director submits that this Court need only remand the case to the Administrative Law Judge with instructions to carry out the ministerial junction of computing the compensation rate as of February 2, 1978, including the intervening percentage increases under § 910(f).
23
Respectfully submitted,
Marianne Demetral Smith
Attorney for the Director, Office
24
of Workers' Compensation Programs
U.S. Department of Labor
Frances Perkins Building
25
200 Constitution Ave., N.W.
Washington, DC 20210(202) 357-0462
Signature as Approving
26
/s/ James B. Eaton
Attorney for Appellant
27
Prepared with the mutual cooperation of government and claimant's attorneys.
28
/s/ James B. Eaton
Attorney for Appellant
*
District Judge of the Western District of Texas, sitting by designation
1
Counsel's attorneys' fees petition contains the following summary of time spent:
Date Hours Action
---- ----- ------
25 Appeal to Board of Benefits & Review
March 5, 1980 4 Briefing
March 6, 1980 4 Briefing
April 22, 1980 8 Briefing
April 23, 1980 8 Briefing
May 12, 1980 2 Briefing
May 13, 1980 4 Briefing
May 14, 1980 1 Briefing
June 7, 1980 5 Briefing
June 8, 1980 4 Briefing
June 9, 1980 3 Briefing
June 10, 1980 2 Briefing
August 1980 10 Reply Brief
8 Filed briefs, printed, etc.
March 13, 1981 4 Briefing
March 16, 1981 8 Briefing
March 18, 1981 4 Briefing
March 19, 1981 8 Argument
Total Hours 109 x $150.00 pr hr.
Total Amount $16,459.00
----------
Postage for certified mail, etc. $ 10.00
Copy costs for briefs, etc. $ 56.00
Travel expenses to New Orleans
for appeal: $100.00
Flight $50.00
Hotel $40.00
Cab $10.00
------
$100.00
Total cos $166.00
-------
Total attorney's
hours 16,459.00
Total costs 166.00
---------
Total amount due 16,625.00
---------
Both the addition and multiplication are obviously incorrect. Presumably, counsel intends to request $16,966 and not $16,625 in total fees.
2
We have serious doubts about whether 79 hours of briefing at $150 per hour is a reasonable fee request for an opening brief of seven pages with five cited authorities and a reply brief of three pages citing two. If brevity be the soul of wit, $11,850 has purchased a great deal of it here. Cf. Director v. Black Diamond Coal Mining Co., 598 F.2d 945, 953-54 (5th Cir. 1979) (attorney fee request not sufficiently detailed; court dubious of whether brief worth 20 hours of attorney time)
3
Section 28 of the Act, 33 U.S.C. § 928, provides as follows:
(a) If the employer or carrier declines to pay any compensation on or before the thirtieth day after receiving written notice of a claim for compensation having been filed from the deputy commissioner, on the ground that there is no liability for compensation within the provisions of this Act, and the person seeking benefits shall thereafter have utilized the services of an attorney at law in the successful prosecution of the claim, there shall be awarded, in addition to the award of compensation, in a compensation order, a reasonable attorney's fee against the employer or carrier in an amount approved by the deputy commissioner, Board, or court, as the case may be, which shall be paid directly by the employer or carrier to the attorney for the claimant in a lump sum after the compensation order becomes final.
(b) If the employer or carrier pays or tenders payment of compensation without an award pursuant to section 14(a) and (b) of this Act, and thereafter a controversy develops over the amount of additional compensation, ... the deputy commissioner or Board shall set the matter for an informal conference and following such conference the deputy commissioner or Board shall recommend in writing a disposition of the controversy.... If the employee refuses to accept such payment or tender of compensation, and thereafter utilizes services of an attorney at law, and if the compensation thereafter awarded is greater than the amount paid or tendered by the employer or carrier, a reasonable attorney's fee ... shall be awarded in addition to the amount of compensation....
4
The nonstatutory exceptions to the American Rule are limited to the common fund theory (Mills v. Electric Street Lite Corp., 396 U.S. 375, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970)); but see dissent of Justice Black, 396 U.S. at 397, 90 S.Ct. at 628), situations where a party has willfully violated a court order (Toledo Scale Co. v. Computing Scale Co., 261 U.S. 399, 43 S.Ct. 458, 67 L.Ed. 719 (1923)), and cases of fraudulent, groundless, oppressive, or vexatious conduct (F. D. Rich Co. v. United States ex rel. Industrial Lumber Co., 417 U.S. 116, 94 S.Ct. 2157, 40 L.Ed.2d 703 (1974)). Alyeska put an end to the "private attorneys general" theory for awarding attorneys' fees. Appellant does not claim that any of these exceptions are applicable here
5
Section 44 provides:
(a) There is hereby established in the Treasury of the United States a special fund. Such fund shall be administered by the Secretary. The Treasurer of the United States shall be the custodian of such fund, and all moneys and securities in such fund shall be held in trust by such Treasurer and shall not be money or property of the United States.
....
(j) The proceeds of this fund shall be available for payments:
(1) Pursuant to sections 10 and 11 with respect to initial and subsequent annual adjustments in compensation for total permanent disability or death which occurred prior to the effective date of this subsection.
(2) Under section 8(f) and (g), under section 18(b), and under section 39(c).
(3) To repay the sums deposited in the fund pursuant to subsection (d).
(4) To defray the expense of making examinations as provided in section 7.
The special fund is the source of compensation payments when it has been determined, as in the instant case, that section 8(f) of the Act, 33 U.S.C. § 908(f), the Act's second injury provision, is applicable to limit the employer's compensation liability.
6
While there are certain valid policy reasons for permitting claimants to recover their attorneys' fees when they prevail in a dispute with the administrator of the special fund, the director submits and we agree that these reasons are no more persuasive than the arguments favoring the award of attorneys' fees to prevailing parties in other types of litigation. Although all other major nations provide for awards of attorneys' fees to prevailing parties, see, e. g., Recent Developments in Attorneys' Fees, Vand.L.J. 685, 720 n.239 (1976), the Supreme Court recognized as early as 1796 that "the general practice of the United States is in opposition (sic) to (fee shifting) and even if that practice were not strictly correct in principle, it is entitled to the respect of the court, until it is changed, or modified by statute." Arcambel v. Wiseman, 3 U.S. (Dall) 306, 1 L.Ed. 613 (1796). And, while disfavored outside of the United States, the American Rule is not without supporting policy arguments. As Justice Marshall pointed out in F. D. Rich Co. v. U. S. Industrial Labor Co., 417 U.S. 116, 129, 94 S.Ct. 2157, 2165, 40 L.Ed.2d 703 (1974), a contrary rule might unjustly discourage the poor from instituting actions to vindicate their rights as well as further involve the courts in the difficulties of proof inherent in determining the reasonableness of attorneys' fees. "Finally, there is the possibility of a threat being posed to the principle of independent advocacy by having the earnings of the attorney flow from the pen of the judge before whom he argues." Id
7
Indeed, Congress acknowledged that the responsibility for fees would occasionally fall on claimants since, in section 28(c) of the Act, 33 U.S.C. § 928(c), it provided that approved attorneys' fees, "in cases in which the obligation to pay the fee is upon the claimant, may be made a lien upon the compensation due under an award...." | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1558076/ | 22 So.3d 86 (2009)
A.V.
v.
STATE.
No. 3D09-1355.
District Court of Appeal of Florida, Third District.
November 12, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2453642/ | 258 P.3d 538 (2011)
244 Or. App. 694
IN RE T.E.D.
DEPARTMENT OF HUMAN SERVICES
v.
S.A.T.
No. A147324.
Court of Appeals of Oregon.
August 3, 2011.
Affirmed Without Opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565589/ | 40 F.2d 106 (1930)
CHEEK-NEAL COFFEE CO.
v.
HAL DICK MFG. CO.
Patent Appeal No. 2295.
Court of Customs and Patent Appeals.
April 14, 1930.
*107 Edward S. Rogers and Allen M. Reed, both of Chicago, Ill. (John S. Prescott, of New York City, of counsel), for appellant.
Clarence A. O'Brien, Charles E. A. Smith, and Thomas E. Turpin, all of Washington, D. C., for appellee.
Before GRAHAM, Presiding Judge, and BLAND, HATFIELD, GARRETT, and LENROOT, Associate Judges.
LENROOT, Associate Judge.
This is an appeal from a decision of the Commissioner of Patents affirming a decision of the Examiner of Interferences dismissing a notice of opposition in a trade-mark proceeding.
The facts upon which the dismissal is based are stated in the Commissioner's decision as follows:
"The applicant seeks registration of a mark comprising a composite picture including a pictorial representation of a hotel, the words `Maxwell House' appearing above such representation and a slogan `Good to the Last Bite' appearing below such representation of a hotel, the whole matter being enclosed within an oblong border, and used upon horse-radish, olive spread, cranberry jelly, relish spread composed of a mixture of eggs, oil, vinegar and sweet pickles, sweet relish composed of sweet pickles and curry seed, chili sauce, salad dressing, orange marmalade, mustard, tomato catchup, Thousand Island dressing, peanut butter and mayonnaise.
"The opposer alleges prior adoption, use and ownership of a trade mark including the pictorial representation of this same hotel and the slogan `Good To The Last Drop,' used upon coffee and tea.
"Opposer sets forth certain prior registrations of its mark in 1915, 1924 and 1926, and alleges wide advertising of goods under its mark, very extensive sales and the possession of a valuable good will.
"A comparison of the two marks shows that the applicant has substantially availed itself of the principal characteristics of the opposer's mark. The representation of the hotel, as adopted by the applicant, includes even the representation of the street car and the horses and vehicles adopted by the opposer. * * *"
The ground of dismissal of the opposition was that the goods of the parties possess different descriptive properties, and, therefore the opposer, appellant's assignor, having based his notice of opposition wholly upon confusion in trade, did not present a statutory ground of opposition.
The only question necessary for us to determine is whether the goods of the parties are of the same descriptive properties, as that term is used in section 5 of the Act of February 20, 1905, as amended (15 USCA § 85).
The construction of the phrase "same descriptive properties" has frequently been before the courts, and many conflicting decisions can be found upon this point.
This court at the present term, in a number of cases, has had occasion to review this question and the conflicting decisions with respect thereto. In the case of B. F. Goodrich Co. v. Clive E. Hockmeyer (Zip-On Manufacturing Co., substituted), 40 F.(2d) 99, we definitely held, speaking of said section 5, that: "* * * The language "same descriptive properties" contained in the first proviso was intended by the Congress to relate to goods of the same general class; that such language was not intended to be more or less comprehensive than the term `class' used in the first part of the section; that the language of the first proviso was intended to state the converse of the mandates of the first part of the section, namely, that a mark by which the goods of the owner of the mark may not be distinguished from other goods of the same class shall not be registered. * * *"
In other words, this court holds that the word "class" and the phrase "same descriptive properties," as used in said section 5, are synonymous in their meaning.
Applying this construction to the case at bar, we have no difficulty in holding that the goods of the parties to which the marks are applied are of the same descriptive properties.
The Century Dictionary defines "class" as follows: "4. a number of objects distinguished by common characters from all others, and regarded as a collective unit or group; a collection capable of a general definition; a kind."
While this definition may not be sufficiently comprehensive, it is a correct statement of the common meaning of the word as ordinarily used.
Do the goods of the parties belong to a collection "capable of a general definition"? We think they do. We may take judicial notice of the fact that the goods of both parties are commonly known as groceries, sold in the same stores and to the same class of purchasers.
The word "groceries" is defined in Funk & Wagnalls New Standard Dictionary as follows: *108 "Household supplies for the table such as are dealt in by grocers."
The Century Dictionary has the following definition of the word: "3. General supplies for the table and for household use, as flour, sugar, spices, coffee, etc. * * *"
We are clear that coffee and tea, the goods of appellant to which its mark is applied, and horse-radish, olive spread, cranberry jelly, relish spread, composed of a mixture of eggs, oil, vinegar, and sweet pickles, sweet relish, composed of sweet pickles and curry seed, chili sauce, salad dressing, orange marmalade, mustard, tomato catchup, Thousand Island dressing, peanut butter, and mayonnaise, the goods of appellee to which its mark is applied, are of the same class; that they possess the same descriptive properties, as that phrase is construed by this court; and that the Commissioner erred in dismissing the notice of opposition of appellant.
The decision of the Commissioner is reversed, and the case remanded for further proceedings not inconsistent with the views here expressed.
Reversed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565593/ | 40 F.2d 408 (1930)
RODRIGUES
v.
EDWARDS.
No. 246.
Circuit Court of Appeals, Second Circuit.
April 7, 1930.
David A. Buckley, Jr., of Washington, D. C. (Dean H. Stanley and Alfred C. Frodell, both of Washington, D. C., of counsel), for plaintiff.
Charles H. Tuttle, U. S. Atty., of New York City (Leon E. Spencer, of New York City, of counsel), for defendant.
Before L. HAND, SWAN, and MACK, Circuit Judges.
MACK, Circuit Judge.
This case was submitted to the District Court upon stipulated facts which may be summarized as follows: On July 2, 1918, plaintiff entered into a three-year contract of employment with the Champlain Silk Mills, to begin as of January 1, 1918. His annual compensation was thereby fixed at $3,600 plus a sum equal to 2 per cent. of the annual net profits of the silk company. It was mutually agreed that, until all the treasury common stock should be otherwise sold, the company would sell and plaintiff would buy treasury common stock with two-thirds of this 2 per cent. at book value to be determined under an agreed method, and that the company was authorized to apply the two-thirds of the 2 per cent. for that purpose. Plaintiff was given the option similarly to use the other one-third of the 2 per cent.
The company's books were to be closed and apportionments made semiannually; the loss, if any, in any year was to be charged against the profits of the succeeding year for the purpose of estimating net profits, and a final adjustment in this respect was to be made at the termination of the agreement. Plaintiff agreed that while he remained an employee he would not dispose of the stock so purchased except with the written consent of the company or of Meyer, its chief stockholder.
In the event of plaintiff's death, Meyer was to have a four-month option to purchase the shares at their then book value, on fixed terms of payment, with the right, if he exercised the option, to require an immediate assignment of the stock or trust certificates representing it. During the option period, plaintiff's stock or trust certificates were not to be sold. Meyer had the further option, at the termination of the contract, either to renew it, or, within thirty days, to offer to buy the shares or certificates as in the case of death, with a similar option, in case of renewal, at the end of the renewal period. If Meyer refused to exercise an option, plaintiff, or his representatives in the event of his death, could compel liquidation proceedings. If plaintiff refused to renew, Meyer could liquidate the corporation, or, at his option, purchase the stock. Plaintiff was further required to place the stock, immediately upon acquisition, in trust until May 1, 1921, and was to receive in return trust certificates which "shall specify upon their face that they are not assignable excepting in accordance with the terms of this agreement." The trustees were to distribute dividends on the stock *409 held by them to "the beneficial holder thereof."
Plaintiff received $18,393.03 as his share of the final net profits for the year 1919, $4,914.12 in cash, and the remainder, $13,478.91, in stock, all of which was included in his gross income for 1919; a tax thereon of $2,384.73 was levied and paid. A claim for the refund of that part of the tax which had been levied on income represented by the stock was rejected; thereupon plaintiff brought the present action. The applicable statutes and regulations are appended in a footnote.[1]
Plaintiff contends that the sum equal to two-thirds of 2 per cent. of the net profits received in stock and placed under the trust agreement was not subject in any manner to disposition by him, and therefore did not constitute any part of his income for the year 1919. Respondent urges that at the time of acquisition the stock was something of value to which plaintiff became unconditionally entitled, that it was assignable, and that it therefore constituted income.
Plaintiff concedes that the receipt of something of exchangeable value or of which he could dispose would constitute income. See Eisner v. Macomber, 252 U.S. 189, 207, 40 S. Ct. 189, 64 L. Ed. 521, 9 A. L. R. 1570. He asserts, however, that under the contract he could make no disposition of the stock without the consent of the company or Meyer; furthermore, that it was subject to purchase at some future book value.
In our judgment, the contract not only did not prevent plaintiff from disposing of the trust certificates, but, on the contrary, it evidenced a clear intention that he should have a right of immediate disposition thereof. The trust certificates were to bear on their face the statement that they should not be assignable except in accordance with the terms of the agreement; this clearly implied that, subject to those terms, they might be assigned. Cf. Uniform Stock Transfer Act, § 15 (P. L. N. J. 1916, p. 402); Baumohl v. Goldstein, 95 N. J. Eq. 597, 124 A. 118. Clearly, therefore, they were not wholly inalienable, even though a prospective purchaser were to acquire them subject to the limitations under which they were held by plaintiff. The requirement of consent by a third person is not an absolute bar to negotiation (Farmers' Mercantile & Supply Co. v. Laun, 146 Wis. 252, 131 N.W. 366; In re Copal Varnish Co., [1917] 2 Ch. 349); on the contrary, it implies that, if such consent be secured, the stock or trust certificate is assignable. Some restrictions upon the transferability of corporate shares or trust certificates are now common; but such shares or certificates may nevertheless be readily marketed. See "Restrictions Upon the Transferability of Shares of Stock," 42 Harv. Law Rev. 555, and cases cited.
The express restriction against any sale was limited to the brief option periods; at other times the certificates might have been freely sold subject, of course, to the options and, during the employment, to Meyer's or the company's consent.
The objection that, because these shares were subject to purchase at some future book value, which theoretically might be nil, they were wholly without value, cannot be accepted. This possibility confronts the owner of any common corporate stock. The stipulated facts also contain a statement that "at the termination of the three years' agreement, *410 * * * a final adjustment of the plaintiff's share of the two-thirds (2/3rds) of two per cent. (2%), so-called additional compensation, was made pursuant to the terms of the agreement." In the light of the contract provision that losses in any one year were to be charged against subsequent years, we assume that this means that losses, if any, were deducted after 1919. Plaintiff offered no proof that the silk company suffered any loss in 1918 which could be carried over to reduce his share of the profits in 1919, the taxable year here involved.
These conclusions are not in conflict with any of the cases cited by plaintiff or contrary to the provisions of article 53 of Regulations 45. In that article and in all of the cases, the ultimate ownership of the bonus stock depended upon the continuance of the taxpayer in the employ of the corporation for the agreed period. Appeal of James R. Lister, 3 B. T. A. 475, 482; Appeal of Roscoe H. Aldrich, 3 B. T. A. 920; cf. Kaufman Department Stores, Inc., v. Comm. (C. C. A.) 34 F.(2d) 257. Finally, plaintiff has raised no question as to the value at which the stock issued as part of his 1919 compensation should be taken, but has contested only its taxability as part of his gross income. Possibly, because of the restrictions, the value of such stock, were negotiation attempted, would be less than the price paid by plaintiff. The burden of showing this, however, was on him, and he has not met it.
Judgment affirmed.
NOTES
[1] Revenue Act of 1918:
"Sec. 212. (a) That in the case of an individual the term `net income' means the gross income as defined in section 213, less the deductions allowed by section 214." 40 Stat. 1064.
"Sec. 213. That for the purposes of this title * * * the term `gross income'
"(a) Includes gains, profits, and income derived from salaries, wages, or compensation for personal service * * * of whatever kind and in whatever form paid, or from professions, vocations, trades, businesses, commerce, or sales, or dealings in property, whether real or personal, growing out of the ownership or use of or interest in such property; also from interest, rent, dividends, securities, or the transaction of any business carried on for gain or profit, or gains or profits and income derived from any source whatever. * * *" 40 Stat. 1065.
Treasury Regulations 45 (1920 edition):
"Art. 53. Income not Reduced to Possession. Income which is credited to the account of or set apart for a taxpayer and which may be drawn upon by him at any time is subject to tax for the year during which so credited or set apart, although not then actually reduced to possession. To constitute receipt in such a case the income must be credited to the taxpayer without any substantial limitation or restriction as to the time or manner of payment or condition upon which payment is to be made. A book entry, if made, should indicate an absolute transfer from one account to another. If the income is not credited, but is set apart, such income must be unqualifiedly subject to the demand of the taxpayer. Where a corporation contingently credits its employees with bonus stock, but the stock is not available to such employees until the termination of five years of employment, the mere crediting on the books of the corporation does not constitute receipt. The distinction between receipt and accrual must be kept in mind. Income may accrue to the taxpayer and yet not be subject to his demand or capable of being drawn on or against by him." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565596/ | 40 F.2d 468 (1930)
CHAPMAN
v.
DWYER.
No. 260.
Circuit Court of Appeals, Second Circuit.
April 7, 1930.
*469 *470 John J. Cunneen, of New York City, for defendant-appellant.
Grover C. Sniffen, of New York City (William M. Cannon, of New York City, of counsel), for plaintiff-appellee.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
CHASE, Circuit Judge (after stating the facts as above).
Unless the parties were engaged in a joint venture in the Pennsyl Case, the plaintiff's remedy is not in equity but at law to collect whatever may be due him for services rendered and expenses incurred.
Although the legal significance of joint adventure has come to be widely recognized, it was unknown to the common law, and does not readily admit of short and satisfactory definition. Joint adventurers assume a fiduciary relationship in a single undertaking for profit which gives equity jurisdiction over controversies arising between them concerning the subject-matter as if they were in a technical partnership, Spier v. Hyde, 92 A.D. 467, 87 N. Y. S. 285; Kraemer v. World Wide Trading Co., 195 Ohio App. Div 305, 187 N. Y. S. 16; Braddock v. Hinchman, 78 N. J. Eq. 270, 79 A. 419; but a joint adventurer is not limited to an accounting in equity. He may also sue at law. Joring v. Harriss (C. C. A.) 292 F. 974-978.
These parties undertook to find the Pennsyl heirs as a preliminary to any settlement of the estate. They exchanged information and advice in furtherance of the project. Neither knew where the heirs were, when or how they could be found, if found at all, or which of them, if either, would be successful in the search. They had no express agreement covering what each should do or how the fee should be divided if any fee was eventually obtained. In this search Dwyer was the one who happened to be successful in finding the heirs. They became his clients. While there was no fee or profit to be derived directly from this part of the enterprise, it was so necessary to the ultimate success through settlement of the estate that the search for the heirs was an integral part *471 of the entire business and so undertaken for profit. Thus we have in this respect these characteristics of a joint venture, in that the parties combined their skill and knowledge, with each contributing his own expenses, to obtain clients to represent for profit. When Dwyer had secured the clients, he, with no help from Chapman, did the legal work necessary in settling the estate and obtaining the fee which made the preliminary work worth while; yet Chapman never withdrew from the business and always stood ready and willing to do what he could to help. That Dwyer neither requested him, or gave him an opportunity, to assist did not change his status at all, for there was no particular thing he was bound to do which he refused or failed to perform. That their relationship was not a partnership is apparent, but that this affair was a joint venture is not equally clear.
Were it enough that each should help or be willing to help without compensation except from the proceeds of the undertaking, there would be no difficulty. That much may be fairly implied from the correspondence between them. But parties who assist each other in doing a piece of work are not clothed with the legal quality of joint adventurers so simply. If they were, it would be necessary only for two or more to work together in a common attempt to accomplish some profitable result and make their pay in some way dependent in whole or in part upon their success. In addition to this, there must be an understanding, express or implied, that each shall share in the profits as such so that each has an equitable interest in the profits themselves. That is what gives rise to the jurisdiction of a court of equity to hear and determine controversies between the parties and to impress a lien upon the profits as in the liquidation of partnership assets. See In re Taub (C. C. A.) 4 F.(2d) 993; Hill v. Curtis, 154 A.D. 662, 139 N. Y. S. 428, 429. The latter was a case where attorneys joined in the prosecution of claims on a contingent basis under an express written agreement providing that each should pay one-half of the expenses and "that the profit, fee, compensation or other emolument which shall or may be received from the prosecution of said claims, shall be equally divided by and between the said parties hereto." It was held that this was a joint venture and the action for an accounting properly cognizable in equity, since the agreement provided for a proprietary interest in the profits. In Zuby v. Height (Sup.) 188 N. Y. S. 88, 89, the agreement was that the plaintiff should share in the defendant's business "to the extent of one-third of the net profit," and was to have a weekly drawing account to be deducted from his share of the profits, all in return for services rendered in aid of the business. It was held that a share in the net profits was but a basis of computing the compensation to be paid an employee and not enough to create a joint venture.
In this case the business might have been carried out as a joint venture if the parties had had an agreement sufficient to make it so. The burden of proving such an understanding, express or implied, was on the plaintiff. The gist of such an agreement to be proved was that the plaintiff should have an interest in the fee, as such, considered as the res rather than the right to be paid his fair compensation to be determined, either on the basis of what he did or what success attended the efforts of both. The important facts, so far as they do appear, are shown by the correspondence. The inferences to be drawn therefrom are the controlling elements. This leaves the determination of whether or not the parties were joint adventurers a matter of law. With the burden on the plaintiff to show equitable jurisdiction by showing a joint venture and the inferences to be drawn from the facts proved tending to show that Dwyer, with Chapman's acquiescence, and probable approval, took over and did almost all the work himself, there is quite as much reason to believe that the parties understood that Chapman was to be paid in the end whatever they might agree to be, or what in fact should be, just remuneration for what he had done, as that any agreement is to be implied whereby he was to have some ownership in the fee itself. How they settled the few other business matters they had and did settle before this, for all of them were not closed, does not help us in determining this question, for each case was settled as the parties agreed, and there was no such uniformity of treatment over a period of time sufficient to create a custom of proprietary interest in fees and of equal fee division, in the light of which their correspondence in this case is to be read to disclose its real meaning. First National Bank v. Burkhardt, 100 U.S. 686, 25 L. Ed. 766.
The proof preponderates in favor of these parties standing in the relation of debtor and creditor rather than that of joint adventurers, and accordingly the decree is reversed, with leave to the plaintiff, if he is so advised, to amend his pleadings and apply for transfer and trial at law. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1565641/ | 40 F.2d 249 (1930)
TOMKINS COVE STONE CO.
v.
BLEAKLEY TRANSP. CO., Inc., et al.
No. 4081.
Circuit Court of Appeals, Third Circuit.
April 24, 1930.
*250 McDermott, Enright & Carpenter, of Jersey City, N. J., and Macklin, Brown, Lenahan & Speer, of New York City, Horace L. Cheyney and J. Dudley Eggleston, both of New York City, for appellant.
Wm. F. Purdy and Robert Strange, both of New York City, for appellees.
Before WOOLLEY and DAVIS, Circuit Judges, and JOHNSON, District Judge.
WOOLLEY, Circuit Judge.
This is a controversy in admiralty between the owner, charterer, and wharfinger of a scow in respect to injuries which no one knows or will tell when, where or how she sustained them.
Bleakley Transportation Company, owner of the deck scow Bleakley No. 18, chartered her to the Tomkins Cove Stone Company under an oral charter of a kind familiar in New York Harbor, which the federal courts of the Second Circuit have regarded as a demise, though in charge of a caretaker called captain by courtesy furnished and paid by the owner, The Willie (C. C. A.) 231 F. 865, 867; Dailey v. Carroll (C. C. A.) 248 F. 466, 467; Monk v. Cornell Steamboat Co. (C. C. A.) 198 F. 472, 475; O'Brien Bros. v. New York (C. C. A.) 9 F.(2d) 542, and have held to contain an implied undertaking on the part of the charterer to return the boat to the owner at the end of the term in as good condition as when received, less ordinary wear and tear. Schoonmaker, Conners Co. v. Lambert Transportation Co. (C. C. A.) 268 F. 102. After loading the scow up the river with crushed stone the charterer took her to Jersey City and placed her in a berth of the cargo consignee, Van Keuren & Son, Inc., the wharfinger. She was then in good condition, so far as could be judged from her outer structure, and also in good condition on the next day when the consignee began to unload and after a part of the cargo had been discharged. On the third day, before discharging was resumed, the captain went below and discovered injuries to her inner structure. Later, the owner filed this libel against the charterer on its implied warranty of return in good condition. The charterer by its answer denied fault or negligence on its part and asserted that the injuries were due to fault or negligence of the owner's servant the "captain" in charge of the scow, or to fault or negligence of Van Keuren & Son, Inc., the wharfinger (which it impleaded as a party to the action) in furnishing the craft with an unsafe berth and in discharging her in an improper and negligent manner. The court entered an interlocutory decree dismissing the petition impleading the wharfinger, and holding the charterer responsible for the injuries and liable for damages. On the charterer's appeal all parties appeared and tried the case de novo. The John Twohy, 255 U.S. 77, 41 S. Ct. 251, 65 L. Ed. 511.
The oral charter of a scow thus manned being treated as a demise, the charterer is not an insurer, Simmons Transportation Company v. Wright & Cobb Lighterage Co. (D. C.) 290 F. 454, but is subject to the law of bailments for hire. Mulvaney v. King Paint Mfg. Co. (C. C. A.) 256 F. 612. As a bailee, he is charged with the duty of ordinary care and is liable for negligence resulting from a breach of that duty and for nothing more. The Eureka No. 70 (C. C. A.) 15 F.(2d) 366, 1926 A. M. C. 1668; Simmons Transportation Co. v. Wright & Cobb Lighterage Co. (D. C.) 290 F. 454; Hildebrandt v. Flower Lighterage Co. (D. C.) 277 F. 436; Moran Towing & Transportation Co. v. Raritan Copper Works, 41 F.(2d) 255, 1924 A. M. C. 696; C. F. Harms Co. v. Upper Hudson Stone Co. (C. C. A.) 234 F. 859; C. F. Harms Co. v. Turner Const. Co. (D. C.) 290 F. 612; The Junior (C. C. A.) 279 F. 407, 408. Therefore this action is for damages based on the charterer's negligence.
*251 There is no dispute about the law thus far. The trouble arises in respect to the proof of the charterer's negligence, that is, on whom, in a suit on a charter of this kind, rests the burden of proof and what is the measure of proof.
The burden of proving negligence is upon the owner the one asserting it. But he is not required in his opening as in other negligence cases to prove the specific acts which establish the charterer's negligence. It will be enough, in the beginning at least, that he make out a prima facie case of negligence. "He makes out a prima facie case, if he can go no further than to show that the boat was damaged during the charter period and then the burden of explanation, or, as it is sometimes said, of carrying on, lies upon the charterer. In the absence of exculpatory evidence a presumption of negligence arises against him. Wintringham v. Hayes, 144 N.Y. 1 [38 N.E. 999, 43 Am. St. Rep. 725]; Terry & Tench Co. v. Merritt & Chapman Derrick & Wrecking Co. [C. C. A.] 168 F. 533; Hastorf v. Long Co. [C. C. A.] 239 F. 852; White v. Upper Hudson Co. [C. C. A.] 248 F. 893; White v. Schoonmaker Co. [C. C. A.] 265 F. 465; Schoonmaker, Conners Co. v. Lambert Transp. Co. [C. C. A.] 268 F. 102." Moran Towing & Transp. Co. v. Raritan Copper Works, 41 F.(2d) 255, 1924 A. M. C. 696. We find from the trend of decisions that the presumption of the charterer's negligence does not wait upon "the absence of exculpatory evidence" to arise but arises in the beginning from the fact that a boat, seaworthy when delivered, was injured while in possession of the charterer and cannot be returned in good condition. That fact, without more, "establishes a prima facie case of fault, and places on the (charterer) the duty of rebutting the prima facie case that is, to explain the situation," C. F. Harms Co. v. Turner Construction Co. (D. C.) 290 F. 612, 613; Hildebrandt v. Flower Lighterage Co. (D. C.) 277 F. 436, and show that there was no fault or negligence at all or, if any, it was that of another, for instance, and, as claimed here, it was that of the owner's scow captain and therefore imputable to the owner, The Junior (C. C. A.) 279 F. 407, or that of the wharfinger. If the charterer's evidence in explanation of the injuries is sufficient to overcome the presumption of his negligence arising out of a charter of this character by proving specifically how the injuries occurred or generally his handling of the boat, he will be relieved of his implied undertaking to return the boat in good condition, unless the owner, on whom will then rest the burden of proving the charterer's negligence otherwise than by the presumption, produces evidence that outweighs the rebuttal evidence. C. F. Harms Co. v. Turner Const. Co. (D. C.) 290 F. 612, 614; Hildebrandt v. Flower Lighterage Co. (D. C.) 277 F. 436; Mulvaney v. King Paint Mfg. Co. (C. C. A.) 256 F. 612, 615; Schoonmaker, Conners Co. v. Lambert Transp. Co. (C. C. A.) 268 F. 102; O'Brien Bros. v. New York (C. C. A.) 9 F.(2d) 542; Terry & Tench Co. v. Merritt & Chapman D. & W. Co. (C. C. A.) 168 F. 533. If, however, the evidence which the charterer offers to rebut the presumption should not in the opinion of the trial court excuse him, the presumption of negligence which the law raised against him in the beginning remains as though he had not made an attempt to rebut it, just as though he stood mute facing the presumption.
Coming to the trial, it is certain from the evidence that the injuries to the scow were occasioned by the negligence of someone. The owner made out a prima facie case of negligence against the charterer under the presumption and there rested. The charterer, in turn, charged negligence to the owner's scow captain in mooring the scow in a berth with a slanting bottom, known to him after making soundings. The Raymond M. White (D. C.) 290 F. 454, 457. If it had proved that such a berth was unsafe, that would have been enough. But we find, as evidently did the trial judge, that while the bottom did slant from the piling at an angle of from five to twelve feet at low tide, it was not unsafe because from such a bottom all along that side of the river a craft held by slack lines, as this scow was held, will float safely by tide movement into deep water.
The charterer next charged negligence to the impleaded wharfinger in assigning the scow to an unsafe berth. Hirsch Lumber Company v. C. Ottaviano & Co. (C. C. A.) 18 F.(2d) 952; Smith v. Burnett, 173 U.S. 430, 19 S. Ct. 442, 43 L. Ed. 756. That would exculpate the charterer primarily and fix liability first upon the wharfinger had it been proved, but in this we hold the evidence failed.
Finally the charterer charged the wharfinger with negligence which resulted in the injuries to the scow in discharging her in an improper manner. Foote v. Storrs, 2 Barb. (N. Y.) 328; Blin v. Mayo, 10 Vt. 56, 33 Am. Dec. 175. This raised a straight-out issue of fact between the charterer and wharfinger, *252 supported on one side by the testimony of the scow captain and on the other by the testimony of the hoisting engineer of the wharfinger engaged in discharging the scow. These opposing witnesses agree that from external appearance the scow was seemingly in good condition when she arrived at the dock and until on the third day the captain discovered her internal injuries, though neither man testified that before that time he had gone below or had been in a position to see her condition, thus leaving open the question when and how she sustained the injuries thus discovered, unless they were occasioned by the manner of her discharge, on which point there is a sharp conflict in the testimony of these witnesses, making a corresponding sharp difference in the inferences to be drawn from their wholly opposite accounts of the discharging operation. Aside from the probabilities of the situation, the learned trial judge was, in view of their conflicting stories, required to believe one witness and disbelieve the other. Accordingly, he rejected the testimony of the scow captain given for the charterer and accepted the testimony of the hoisting engineer for the wharfinger, basing his action, not on a finding that either witness was untruthful, but expressly on his observation of the witnesses and his appraisal of their intelligence and their power accurately to observe what had happened and correctly to testify in respect to it.
Trying the case de novo from the printed record, our inclination is that the learned trial judge was right in holding the wharfinger free from negligence, but any lingering uncertainty in that regard must be resolved in favor of the fact finding of the trial judge (who saw and heard the witnesses) which will not be disturbed by an appellate court unless shown by the evidence to be clearly wrong. American Merchant Marine Ins. Co. v. Liberty S. & G. Co. (C. C. A.) 282 F. 514; Lewis v. Jones (C. C. A.) 27 F.(2d) 72; Swenson v. Snare & Triest Co. (C. C. A.) 160 F. 459.
As both the trial court and this court have put out of the case all the evidence introduced by the charterer to disprove its negligence, the only proof remaining is the evidentiary presumption of the charterer's negligence which, not being rebutted, continues to the end of the case just as it stood at the beginning. On that presumption, now standing alone, the decree awarding the owner the right to recover from the charterer must be affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558442/ | 22 So.3d 543 (2009)
O'SICKEY
v.
STATE.
No. 1D08-2734.
District Court of Appeal of Florida, First District.
November 16, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558212/ | 22 So.3d 535 (2007)
EX PARTE DERRICK LAMAR DAVIS.
No. 1061230 (CR-06-0699).
Supreme Court of Alabama.
July 13, 2007.
Decision of the Supreme Court of Alabama Without Published Opinion Cert. denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558215/ | 22 So.3d 91 (2009)
NELAMS
v.
STATE.
No. 5D09-3705.
District Court of Appeal of Florida, Fifth District.
November 3, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1646774/ | 9 So.3d 864 (2009)
STATE ex rel. Gerald WILLIAMS
v.
STATE of Louisiana.
No. 2008-KH-1600.
Supreme Court of Louisiana.
June 5, 2009.
Reconsideration granted. Writ denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558237/ | 22 So.3d 533 (2007)
EX PARTE ORRIN MARABLE.
No. 1061030 (CR-05-2375).
Supreme Court of Alabama.
July 13, 2007.
Decision of the Supreme Court of Alabama Without Published Opinion Cert. denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558252/ | 22 So.3d 543 (2009)
MURPHY
v.
STATE.
No. 1D09-2899.
District Court of Appeal of Florida, First District.
November 17, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1646787/ | 9 So.3d 589 (2007)
JEFFERY HATFIELD
v.
STATE.
No. CR-06-1226.
Court of Criminal Appeals of Alabama.
June 11, 2007.
Decision of the Alabama Court of Criminal Appeal Without Opinion. Dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558460/ | 22 So.3d 87 (2009)
HINSON
v.
HINSON.
No. 3D09-2525.
District Court of Appeal of Florida, Third District.
December 4, 2009.
Decision without published opinion Certiorari denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2239866/ | 589 N.E.2d 943 (1992)
226 Ill. App.3d 866
168 Ill.Dec. 543
The PEOPLE of the State of Illinois, Plaintiff-Appellee,
v.
Randy HARRELL, Defendant-Appellant.
No. 4-91-0320.
Appellate Court of Illinois, Fourth District.
March 19, 1992.
*944 D. Peter Wise, Metnick, Barewin & Wise, Springfield, for defendant-appellant.
John Turner, State's Atty., Lincoln, Kenneth R. Boyle, Director, State's Attys. Appellate Prosecutor, Springfield, Robert J. Biderman, Deputy Director, Jeffrey K. Davison, Staff Atty., for plaintiff-appellee.
Justice KNECHT delivered the opinion of the court:
The State's Attorney for Logan County charged defendant, Randy Harrell, by information with unlawful possession of more than 500 grams of cannabis (count I) (Ill.Rev.Stat.1989, ch. 56½, par. 704(e)); unlawful *945 possession with intent to deliver more than 500 grams of cannabis (count II) (Ill.Rev.Stat.1989, ch. 56½, par. 705(e)); unlawful possession of less than 15 grams of a controlled substance (cocaine) (count III) (Ill.Rev.Stat.1989, ch. 56½, par. 1402(b)); unlawful use of weapons (count IV) (Ill. Rev.Stat.1989, ch. 38, par. 24-1(a)(7)); and two counts of armed violence (counts V and VI) (Ill.Rev.Stat.1989, ch. 38, par. 33A-2).
Prior to trial, defendant filed a motion to suppress evidence. Defendant alleged that on April 27, 1990, members of the Illinois State Police, without a warrant or his voluntary consent, wrongfully entered and searched his residence, conducted an unconstitutional search of a room other than the one where he was arrested, and unlawfully seized items found in this room.
At the hearing on defendant's motion to suppress, Trooper Mackins testified that on April 27, 1990, he was operating radar on Route 121 and clocked a truck exceeding the speed limit. The driver drove to a house and ran inside. Mackins knocked on the door of the house and asked for the man who just ran inside. He explained to the woman who answered the door (later to be identified as Mrs. Harrell) he had just seen a suspectwho had been speeding enter the house. She stated if he had a warrant he could search the house. He indicated to her he would be back and testified she appeared to be distraught.
Sergeant Anthony L. Walker testified he overheard a radio transmission by Mackins requesting assistance at a residence in Latham, Illinois. Walker then went to the residence. After speaking with Mackins, he knocked on the door, and Mrs. Harrell, holding a washcloth to her head, answered the door. He advised her Mackins had observed a suspect park a truck in her driveway and run into the house. He testified Mrs. Harrell appeared to have been lying down, and she stated she had a migraine. Mrs. Harrell stated no one else was in the house and responded the truck outside belonged to her son. She indicated she did not know where her son was, and she did not believe he had run into the house while she was lying down. Walker she said, "You're welcome to look if you want to." Walker asserted once they were in the house he advised her if she knew where her son was hiding, she should tell them because she would be charged with obstructing justice if she, in fact, had knowledge the man had fled into the residence. He acknowledged the report he had written did not state he was in the house when he told Mrs. Harrell this. Rather, the report indicated he said this to her immediately after she answered the door. However, he testified the report was not in chronological order.
Conversely, Lois Harrell testified she was lying down because she had a migraine when she heard the doorbell. She answered the door, and a trooper asked to see the man who had run into the house. She told the trooper she had been lying down and had not seen or heard anybody run into the house. The trooper responded, "Oh, yep, you did," and said he knew somebody had run into the house. He asked who the truck belonged to and if his name was Randy. She responded he seemed to know all the answers, and he told her he would handle this in another way and left. She lay back down and approximately 15 minutes later the doorbell rang, and there was beating on the door. Three troopers were standing on the porch. She again indicated she had not heard anyone enter the house and asked if they had a warrant. She testified the troopers told her they did not need a warrant, and they had a right to come in. If they found the suspect in the house, they were going to charge her with a felony. She testified she "sort of stepped back and they stepped in the house." She stated she did not give them permission to come into the house.
Once in the house, Walker searched the main floor. Trooper Lindemulder initially searched the basement. When nothing was found, he went to the upstairs bedroom to search. (This search will hereinafter be referred to as the first search.) While looking under a bed, which was raised six inches above the floor, he observed cannabis seeds, a pan with a screen which had cannabis seeds on it, a strong odor of cannabis, and paraphernalia on the *946 shelves adjacent to the bed. This contraband was not removed until after the defendant had been located. He estimated 5 to 10 grams of cannabis and cannabis seeds were discovered in this initial sighting. After he found the cannabis seeds, he noticed a section of paneling which was not properly intact to the wall. He peeled the paneling back and crawled through a narrow passageway which led to an unfinished portion of the attic, where he then observed the defendant. Defendant, while still in the attic, was handcuffed with his hands behind his back. He was escorted downstairs assisted by two troopers, one in front and one in back of him, and placed in Mackins' squad car.
Lindemulder, who stayed in the house while defendant was escorted to the squad car, returned to the area where he had discovered the cannabis and collected it. This recovery was clearly permissible. Walker also returned to this area to search further, in what will be referred to hereinafter as the second search. Because of the strong odor of cannabis, Lindemulder then began to pull objects from under the bed. As he pulled things out, he noticed more cannabis. This "second search" revealed a green Tupperware container containing cannabis, a brown paper bag containing a syringe and three test tubes, several baggies containing cannabis, and a red duffel bag containing several bags of cannabis. A loaded shotgun in a zippered bag (count V) was also found behind the bed. Walker indicated he could not tell it was a shotgun until it was uncased, and he did not know what was inside the red duffel bag until it was opened. Lindemulder testified the amount of cannabis found in this second search was approximately 200 to 250 grams.
After the second search, Walker and Lindemulder went downstairs and called headquarters in an attempt to obtain a search warrant. After waiting about five hours to get a warrant, Walker contacted headquarters again and was instructed to "secure the scene." Walker indicated "secure the scene" actually meant they were to leave the scene. However, the troopers instead decided to finish "the probable cause search of the subject's room" and the area where defendant had been found. No other part of the house was searched. This subsequent "third search" revealed another duffel bag containing cannabis and a sawed-off shotgun. The weapon was found under some clothing on an unused bed (count VI), and the bag was found behind the unused bed. Various containers with cannabis and cocaine also were recovered during this search from the shelves adjacent to the bed, and several bags of cannabis were found in drawers next to the bed.
During the five hours the troopers were trying to obtain a warrant, friends and family arrived at the residence. Mackins was assigned to watch them, and he had a clear view of them. Mrs. Harrell, as well as the guests, were in the living room. Natalie Foster, defendant's sister, was one of the people who came to the house. After the troopers tried to obtain a warrant, they told her they had probable cause to search the defendant's room. She testified the officers did not restrain her movement in the house.
Based on this evidence, the circuit court denied defendant's motion to suppress. Viewed in the totality of the circumstances, the court found Mrs. Harrell gave a voluntary consent and resolved the issue of credibility in favor of the State. Based on the facts(1) the officer's discovery of contraband in plain view during the first search; (2) the diligent attempt to obtain a warrant; (3) the knowledge individuals were entering the residence; (4) the knowledge contraband could be altered, disposed of, or concealed; and (5) the fact the contraband was found in an area usually controlled by the defendantthe court maintained the officers could have believed exigent circumstances existed justifying their search. Therefore, the court concluded the officers acted reasonably, and the warrantless entry was permissible.
A bench trial was held, and the court again concluded the searches were reasonable. It stated that based on the initial entry and what was found, it was not convinced the officers needed to obtain a *947 search warrant since "search probable cause appeared to exist." Turning to the charges, the judge entered a judgment of guilty on counts I, II, III, IV and VI; and found count V was not proved beyond a reasonable doubt. Thereafter, the court found the judgment on count I was merged with count II, and judgment on count I therefore was vacated and set aside. Defendant was sentenced to six years' incarceration on count II, three years on count III, five years on count IV, and six years on count VI, all to run concurrently.
The defendant appeals, contending (1) the trial court erred in ruling the State Police had obtained consent from Mrs. Harrell to enter the residence, (2) the evidence found by the police during the second search was not within his "immediate control," (3) exigent circumstances did not exist which would allow a warrantless search of a portion of his residence, and (4) the State failed to prove he committed the offense of armed violence. We hold the trial court erred in not suppressing certain of the evidence obtained during the second and third searches, i.e., that not first discovered in plain view during Lindemulder's first search of the room for defendant, and we therefore reverse defendant's convictions and remand this case with directions.
I. CONSENT
The fourth amendment generally prohibits "unreasonable searches and seizures." A warrantless search is per se unreasonable unless it falls within one of the recognized exceptions. (Katz v. United States (1967), 389 U.S. 347, 357, 88 S.Ct. 507, 514, 19 L.Ed.2d 576, 585.) In Illinois, those few exceptions are (1) a search based on consent, (2) a search incident to arrest, and (3) a search predicated upon probable cause where there are exigent circumstances which make it impractical to obtain a warrant. (People v. Gardner (1984), 121 Ill.App.3d 464, 468, 76 Ill.Dec. 761, 764, 459 N.E.2d 676, 679.) Here, the initial search was based on the theory of the consent of Mrs. Harrell.
At the hearing on the motion to suppress, there was conflicting testimony relating to whether Mrs. Harrell actually gave consent to the troopers to search the house. However, on appeal, defendant does not argue Mrs. Harrell did not consent, but rather her consent was involuntary because (1) she had a migraine; (2) was "scared to death"; and (3) was told by the police they did not need a search warrant and had a right to come in, and if they found the suspect in the house, she would be charged with obstructing justice. Alternatively, defendant argues if her consent was given voluntarily, it was strictly limited to searching for the person who had allegedly entered the house. Therefore, the troopers exceeded the scope of the consent by continuing to search the house after defendant had been apprehended and removed from the premises.
A circuit court's determination on a motion to suppress will not be overturned unless manifestly erroneous. (People v. Winters (1983), 97 Ill.2d 151, 158, 73 Ill. Dec. 439, 443, 454 N.E.2d 299, 303; People v. Holloway (1981), 86 Ill.2d 78, 91, 55 Ill.Dec. 546, 552, 426 N.E.2d 871, 877.) Further, a trial court's finding on the issue of whether consent was voluntary involves credibility determinations, and thus a reviewing court will not overturn the circuit court's findings unless they are contrary to the manifest weight of the evidence. (People v. Kenning (1982), 110 Ill.App.3d 679, 684, 66 Ill.Dec. 424, 427-28, 442 N.E.2d 1337, 1140-41; People v. Casazza (1991), 144 Ill.2d 414, 417-18, 163 Ill.Dec. 497, 499, 581 N.E.2d 651, 653 (the trial court's determination on voluntariness will not be disturbed unless clearly erroneous).) "`Because a court of review is not in a position to observe the witness as he testifies, questions of credibility and the weight to be given his testimony must be left largely in the discretion of the trial court.'" (People v. DeMorrow (1974), 59 Ill.2d 352, 358, 320 N.E.2d 1, 5, quoting People v. Peterson (1959), 17 Ill.2d 513, 515, 162 N.E.2d 380, 381.) The rule for determining the voluntariness of a consent is as follows: it must be shown from the totality of the circumstances that the consent was not the result of duress or coercion, express or implied, *948 but was, in fact, freely given. Schneckloth v. Bustamonte (1973), 412 U.S. 218, 248, 93 S.Ct. 2041, 2059, 36 L.Ed.2d 854, 875.
The voluntariness of the consent is, in part, dependent upon the testimony concerning events leading up to the search. Viewing the totality of the circumstances, it was not contrary to the manifest weight of the evidence for the court to determine the testimony of the troopers was more credible, and Mrs. Harrell's consent had been given voluntarily. Based on Mrs. Harrell's relationship to the defendant and Officer Walker's testimony that his report was not in chronological order, the court could reasonably conclude the trooper's testimony was more credible. In evaluating the voluntariness of the consent, the court could have disbelieved Mrs. Harrell's testimony that she was advised she would be arrested for obstructing justice before she consented to the search for the defendant, as well as her statement that the police said they could enter without a warrant. Mrs. Harrell's feeling ill and distraught does not render her consent involuntary. Nothing in the evidence indicated conduct by the police which rose to the level of coercion or duress. See People v. Posey (1981), 99 Ill.App.3d 943, 55 Ill.Dec. 234, 426 N.E.2d 209; People v. Paull (1988), 176 Ill.App.3d 960, 126 Ill.Dec. 381, 531 N.E.2d 1008.
We turn next to determine whether the searches exceeded the scope of the consent. Although consenting to a search waives the warrant requirement, it does so only within the scope of the consent. People v. Corral (1986), 147 Ill.App.3d 668, 674, 101 Ill.Dec. 105, 109, 498 N.E.2d 287, 291; People v. Schmoll (1943), 383 Ill. 280, 284, 48 N.E.2d 933, 934.
In Officer Walker's testimony, he stated he explained to Mrs. Harrell that Mackins saw the suspect park his truck in the driveway and run into the house. He indicated she stated she did not believe anyone was in the house, but they were welcome to look. Based on this testimony, Mrs. Harrell's consent was limited to a search for the suspect and did not include authorization for the troopers to continue to search the house once the defendant was apprehended and removed. The police never asked permission to search the house after defendant was found and taken from the premises. There is no indication Mrs. Harrell's consent was continuing in nature or extended to subsequent searches of the house for things other than the suspect, nor is there any indication in the record the officers believed it was or did. (See People v. Kelk (1991), 208 Ill.App.3d 313, 152 Ill. Dec. 958, 566 N.E.2d 835; People v. Jackson (1978), 57 Ill.App.3d 720, 15 Ill.Dec. 383, 373 N.E.2d 729.) Additionally, courts have stated it is the general rule that consent is normally given upon the understanding that such a search would be conducted forthwith and only a single search would be conducted. (People v. Shelton (1982), 110 Ill.App.3d 625, 629-30, 66 Ill. Dec. 367, 371, 442 N.E.2d 928, 932.) Therefore, the second and third searches were outside the scope of Mrs. Harrell's consent. This does not mean the evidence seized during these searches is inadmissible. Rather, it means the evidence seized without the benefit of a warrant must fall within another exception to the warrant requirement in order to be admissible.
II. PLAIN VIEW
Although the defendant does not seem to argue the first search was unconstitutional, it should be explained this search was constitutional under the "plain view doctrine." In Horton v. California (1990), 496 U.S. 128, 110 S.Ct. 2301, 110 L.Ed.2d 112, the Supreme Court ruled the fourth amendment permitted the warrantless seizure of evidence in plain view even though the discovery was not inadvertent. For warrantless seizures to be valid under the plain view doctrine, the court held two conditions must be met in addition to the essential predicate "the officer did not violate the Fourth Amendment in arriving at the place from which the evidence could be plainly viewed." (Horton, 496 U.S. at 136, 110 S.Ct. at 2308, 110 L.Ed.2d at 123.) The two requirements are straightforward: (1) the object's incriminating character must *949 be "`immediately apparent'" (Horton, 496 U.S. at 136, 110 S.Ct. at 2308, 110 L.Ed.2d at 123, quoting Coolidge v. New Hampshire (1971), 403 U.S. 443, 466, 91 S.Ct. 2022, 2038, 29 L.Ed.2d 564, 583), and (2) the officer must have a "a lawful right of access to the object itself" (Horton, 496 U.S. at 137, 110 S.Ct. at 2308, 110 L.Ed.2d at 123).
Applying these requirements to this case, it is clear the recovery and seizure of the evidence discovered in plain view during the initial search for defendant was properly admitted. The troopers were lawfully in the house searching for the defendant pursuant to Mrs. Harrell's consent. The trooper had a right to be in the position he was in when the cannabis seeds on the screen were spotted because he was looking for the defendant in a place where he could be located. Additionally, based on the officer's training, it was immediately apparent to the officer that certain of the evidence, e.g., the cannabis seeds, likely constituted contraband.
However, the State argues the seizure of additional items first discovered during the second and third searches was also lawful under the plain view doctrine. We hold the evidence initially discovered during the subsequent searches was not lawfully obtained under this doctrine. For this doctrine to apply, the police must have a lawful right to be on the premises. While the police had a right to reenter and recover the evidence of contraband which had been spotted in plain view in the first and lawful search for defendant, they had no right to go beyond collecting this contraband, i.e., to seek to discover additional contraband. Accordingly, much of which we have referred to as the second and third search exceeded the scope of consent and no other exception rendered further searching permissible. Even though the police lawfully reentered the room to retrieve evidence discovered during the first search, the officers did not have a right to continue searching. Therefore, as to certain of the evidence initially discovered in the second and third searches, the police violated the fourth amendment because they arrived at the place from which the evidence was viewed in derogation of the fourth amendment.
Additionally, the incriminating character of certain of this evidence was not "immediately apparent." The evidence was not discovered until Lindemulder began pulling things out from under the bed. Moreover, some of the contraband was found in duffel bags under the beds and in drawers. One gun was found behind a bed (count V), and the other was found under some clothing (count VI). It was not until the evidence was opened that its allegedly illegal contents was discovered. It is clear the doctrine of plain view cannot be utilized to validate these later searches.
III. IMMEDIATE CONTROL
Defendant argues the gun and contraband discovered during the second search should have been suppressed because these items were not in his immediate control. The basic guidelines for a permissible search incident to a lawful arrest were set forth in Chimel v. California (1969), 395 U.S. 752, 89 S.Ct. 2034, 23 L.Ed.2d 685. In Chimel, the Supreme Court stated:
"When an arrest is made, it is reasonable for the arresting officer to search the person arrested in order to remove any weapons that the latter might seek to use in order to resist arrest or effect his escape. Otherwise, the officer's safety might well be endangered, and the arrest itself frustrated. In addition, it is entirely reasonable for the arresting officer to search for and seize any evidence on the arrestee's person in order to prevent its concealment or destruction. And the area into which an arrestee might reach in order to grab a weapon or evidentiary items must, of course, be governed by a like rule. A gun on a table or in a drawer in front of one who is arrested can be as dangerous to the arresting officer as one concealed in the clothing of the person arrested. There is ample justification, therefore, for a search of the arrestee's person and the area `within his immediate control'construing that *950 phrase to mean the area from within which he might gain possession of a weapon or destructible evidence." Chimel, 395 U.S. at 762-63, 89 S.Ct. at 2040, 23 L.Ed.2d at 694.
Without specifically defining what constituted the area within an arrestee's "immediate control," the Court emphasized:
"There is no comparable justification, however, for routinely searching any room other than that in which an arrest occursor, for that matter, for searching through all the desk drawers or other closed or concealed areas in that room itself. Such searches, in the absence of well-recognized exceptions, may be made only under the authority of a search warrant. The `adherence to judicial process' mandated by the Fourth Amendment requires no less." Chimel, 395 U.S. at 763, 89 S.Ct. at 2040, 23 L.Ed.2d at 694.
Viewing the totality of the circumstances, we hold the area searched was not within the immediate control of the defendant. When defendant was located, he was found in an unfinished portion of the attic. To obtain entrance to this area, one must remove a piece of paneling and walk through a narrow passageway, approximately three or four feet high, before entering the unfinished portion of the attic. The entrance to the unfinished attic was eight feet to the right of the stairs to defendant's bedroom and approximately 20 feet from his bed. Subsequent to defendant being located, he was handcuffed in the unfinished portion with his hands behind his back and escorted outside to the squad car. As he was being escorted downstairs, there was a policeman in front and one in back of him. Defendant did not have access to the area the police officer later searched, nor did he walk by this area as he was escorted downstairs. Defendant was handcuffed and the troopers had complete control of the situation, so there was no fear of defendant destroying evidence or obtaining weapons to resist arrest or escape. Therefore, the evidence first discovered during the second and third search cannot be admitted under the exception for a search incident to arrest. See People v. Williams (1974), 57 Ill.2d 239, 311 N.E.2d 681; People v. Bishop (1978), 60 Ill.App.3d 940, 18 Ill.Dec. 296, 377 N.E.2d 585.
IV. EXIGENT CIRCUMSTANCES
The trial court also held exigent circumstances existed to justify the second and third searches.
In People v. Kelley (1982), 104 Ill.App.3d 51, 53, 59 Ill.Dec. 844, 846, 432 N.E.2d 630, 632, this court noted that in Jones v. United States (1958), 357 U.S. 493, 497-98, 78 S.Ct. 1253, 1256-57, 2 L.Ed.2d 1514, 1518-19, the Supreme Court concluded "probable cause for belief that certain articles subject to seizure are in a dwelling cannot of itself justify a search without a warrant." Further, this court stated "[t]he destructibility of evidence [did] not by itself excuse the lack of a warrant." (Kelley, 104 Ill.App.3d at 54, 59 Ill.Dec. at 846, 432 N.E.2d at 632.) Because the deputies were not in danger and did not know whether the defendant had arranged for the disposal of the contraband, this court held exigent circumstances did not exist.
In People v. Cohen (1986), 146 Ill.App.3d 618, 100 Ill.Dec. 166, 496 N.E.2d 1231, the State asserted an exigent circumstance was supplied because drugs could be destroyed, and the defendant had warned others the police were in the house. The court stated "the general rule in Illinois is that the potential destruction of evidence, standing alone, does not excuse obtaining a warrant." (Cohen, 146 Ill.App.3d at 625, 100 Ill.Dec. at 171, 496 N.E.2d at 1236 (and cases cited therein).) Therefore, the court concluded exigent circumstances were not present to validate the officer's warrantless entry and search of the residence. See generally Vale v. Louisiana (1970), 399 U.S. 30, 90 S.Ct. 1969, 26 L.Ed.2d 409; 2 W. LaFave, Search & Seizure § 6.5(a), at 655, 658 (2d ed. 1978); United States v. Rubin (3d Cir.1973), 474 F.2d 262; People v. Ouellette (1979), 78 Ill.2d 511, 36 Ill.Dec. 666, 401 N.E.2d 507; People v. Condon (March 12, 1992, Docket No. 70295), ___ Ill.2d ___, ___ N.E.2d ___.
Based on these cases, the searches to discover additional contrabandin contrast *951 to the trooper's conduct directed at recovering the contraband he had already seen in plain view while lawfully searching for defendantafter defendant's arrest could not be based upon exigent circumstances. Here, there was no evidence the officers knew or believed any contraband Trooper Lindemulder had seen would be destroyed. Although there were people in the house, they remained on the first floor in the presence of an officer. Neither was there any indication these people knew drugs were located in the house or would attempt to conceal, destroy, or remove the drugs. Additionally, the defendant no longer posed a threat. He was handcuffed and was sitting in the squad car. Therefore, no exigency existed, and the seizure was in derogation of the defendant's fourth amendment rights.
V. ARMED VIOLENCE
Because of resolution of the other issues in this case, we need not address defendant's argument that the State failed to prove he committed the offense of armed violence (count VI). The sawed-off shotgun identified in count VI was discovered during the illegal third search and, therefore, is inadmissible. Defendant's conviction of armed violence (count VI) is reversed.
VI. CONCLUSION
Accordingly, we reverse defendant's convictions insofar as they were based on evidence initially discovered during the second and third searches. We conclude any contraband first discovered as a result of Officer Lindemulder's initial search for the defendant, i.e., the cannabis and seeds on the screen Lindemulder observed under the bed, which he testified had a weight of 5 to 10 grams, and any contraband on the shelves which he first saw and perceived as such while lawfully searching for the defendant, was recoverable without a warrant and was admissible for criminal prosecution. We remand to the trial court for further hearing with the limited purpose of determining what items and what amounts were properly recovered as a result of Trooper Lindemulder seeing them plain view during his initial search of defendant's room and then perceiving them to be contraband. As to counts I to IV, any amounts lawfully recovered may support the entry of convictions on the charged offenses or any included offenses thereof, e.g., unlawful possession of cannabis, and defendant may thereafter be sentenced on those convictions with credit for time served to date.
Reversed and remanded with directions.
STEIGMANN and LUND, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1560663/ | 171 S.W.3d 222 (2005)
King CHAPMAN & Broussard Consulting Group, Inc. and William Broussard, Appellants,
v.
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, Appellee.
No. 01-03-00989-CV.
Court of Appeals of Texas, Houston First District.
January 6, 2005.
Rehearing Overruled February 16, 2005.
*224 Donn C. Fullenweider, Fullenweider & Wardell, L.L.P, Houston, TX, for appellants.
Jeff Nobles, David A. Clark, Beirne Maynard & Parsons, L.L.P., Houston, TX, for appellee.
Panel consists of Justices TAFT, JENNINGS, and BLAND.
OPINION
JANE BLAND, Justice.
Appellants, King Chapman & Broussard Consulting Group, Inc. (KCB) and William Broussard, sued appellee, National Union Fire Insurance Company of Pittsburgh, PA (National Union), for breaching its defense and indemnification obligations under a directors and officers' (D & O) insurance policy.[1] National Union moved for summary judgment based upon the policy exclusions for contractual liability and prior litigation, and the trial court granted National Union's motion. We hold that the trial court properly rendered summary judgment for National Union based on the policy's exclusions. We therefore affirm.
The Facts and Procedural History
Turner v. Broussard
Broussard is an officer and director of KCB, a management consulting corporation. In 1996, William Broussard and Evelyn Turner divorced. Five years later, in 2001, Turner sued Broussard in his individual capacity, seeking alimony and other contractual rights allegedly accorded to her in the divorce decree.[2] Among other allegations, Turner alleged that the divorce agreement recited: "Broussard covenants that he will be receiving funds for the benefit of Evelyn Grace Turner and as such is acting in a fiduciary capacity with regard to her interests as reflected therein." Based on this provision, Turner alleged Broussard had breached his fiduciary duty to her.
In December 2001, Broussard and Turner settled their dispute relating to the amounts owed under the divorce agreement. In addition to Broussard, the settlement agreement released KCB, its subsidiaries, and its affiliates.
The D & O Policy
In September 1999, National Union issued a D & O policy to KCB that insures KCB's directors, officers, and employees against losses for "wrongful acts" committed "in their capacities" as directors, officers, or employees.[3] The policy excludes coverage for claims that allege contractual *225 liability or that arise out of prior litigation. Under exclusion (f), National Union is not liable for claims:
alleging, arising out of, based upon or attributable to any actual or alleged contractual liability of the Company or any other Insured under any express contract or agreement, [except for employment practice claims].
Under exclusion (h), National Union is not liable for claims:
alleging, arising out of, based upon or attributable to as of the Continuity Date, any pending or prior litigation ...
The "Continuity Date" to which the prior litigation exclusion refers in this case is the policy inception date of September 9, 1999.
Broussard and KCB v. National Union
In February 2001, Broussard and KCB demanded that National Union provide coverage for Turner's lawsuit against Broussard under KCB's D & O policy. National Union denied coverage. In July 2002, after Broussard and Turner settled their dispute relating to the divorce agreement, Broussard and KCB together sued National Union in this case, seeking reimbursement for defense and settlement costs incurred in the Turner lawsuit and for National Union's breach of the duty of good faith and fair dealing in its denial of coverage and a defense of the Turner lawsuit. Broussard and KCB sought damages of $783,000, consisting of: $100,000 for Broussard's attorney's fees, $100,000 for KCB's attorney's fees, $183,000 for the present value of the agreed judgment in the divorce case, $25,000 for reproduction and photo copying costs, and $375,000 in loss to the company for time spent on the Turner matter by Broussard and others.
National Union moved for summary judgment on three grounds: (1) the allegations in Turner's lawsuit are not within the D & O policy's scope of coverage, because Turner did not allege wrongful acts committed in Broussard's capacity as a director or an officer; (2) the D & O policy excludes Broussard and KCB's claims because the Turner lawsuit arises out of prior litigation; and (3) the D & O policy excludes Broussard and KCB's claims because Turner's allegations arise out of an alleged liability under an "express contract," i.e., the divorce agreement. The trial court granted National Union's motion for summary judgment, but later set it aside.
National Union then filed a supplemental motion for summary judgment, in which it dropped the first ground and asserted only the two policy exclusions as grounds. Broussard and KCB presented evidence in opposition to the motion, including affidavits by Broussard, Don Peterson, Thomas Oldham, and Donn Fullenweider.[4] National Union objected to these, save Peterson's original affidavit.[5] The trial court rendered summary judgment in favor of National Union, ordering that Broussard and KCB take nothing. The summary judgment order does not expressly rule on National Union's objections, nor does it state the specific ground upon which the trial court granted the motion. Broussard and KCB appeal the *226 trial court's summary judgment. National Union raises a cross-issue, asking that we affirm on the alternative basis that the D & O policy does not afford coverage.
Standard of Review
We review a summary judgment under a de novo standard. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). We view all evidence in a light favorable to the nonmovant, and we indulge every reasonable inference in the nonmovant's favor. Id. For a traditional summary judgment, as here, the moving party must show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. TEX.R. Civ. P. 166a(c). If, as here, the trial court's order does not specify the grounds for its summary judgment, then we affirm should any of the theories presented to the trial court and preserved for appellate review have merit. See Knott, 128 S.W.3d at 216.
The Eight Corners Rule
Under the eight corners rule, the allegations in the pleadings and the language of the insurance policy determine an insurer's duty to defend. National Union Fire Ins. Co. of Pittsburgh, PA v. Merchants Fast Motor Lines, Inc., 939 S.W.2d 139, 141 (Tex.1997). We view the factual allegations in the petition liberally, resolving any doubt in favor of the insured. McCarthy Bros. Co. v. Cont'l Lloyds Ins. Co., 7 S.W.3d 725, 728 (Tex.App.-Austin 1999, no pet.). An insurer must defend a suit if the petition alleges facts within the scope of coverage. Merchants Fast Motor Lines, 939 S.W.2d at 141. "The duty to defend is not affected by facts ascertained before suit, developed in the process of litigation, or by the ultimate outcome of the suit." American Alliance Ins. v. Frito-Lay, Inc., 788 S.W.2d 152, 154 (Tex.App.-Dallas 1990, writ dism'd); see also Adamo v. State Farm Lloyds Co., 853 S.W.2d 673, 676 (Tex.App.-Houston [14th Dist.] 1993, writ denied) ("It is not the cause of action alleged that determines coverage but the facts giving rise to the alleged actionable conduct.") (emphasis in original).
In general, a coverage determination does not consider matters outside the policy and the pleadings. Capital Bank v. Commonwealth Land Title Ins. Co., 861 S.W.2d 84, 88 (Tex.App.-Houston [1st Dist.] 1993, no writ). We will not read facts into the pleadings, nor will we "imagine factual scenarios which might trigger coverage." Merchants Fast Motor Lines, 939 S.W.2d at 142. We therefore examine whether the allegations in Turner's petition together with the D & O policy language impose a duty upon National Union to defend and indemnify Broussard and KCB in the Turner lawsuit.
The Petition
In her petition, Turner alleges as follows:
(1) Constructive Trustee and Fiduciary Duty Obligations. In paragraphs 9-11, Turner alleges that Broussard breached his constructive trustee and fiduciary duty obligations, established under section 7.16 of the divorce agreement. Section 7.16 provides that Broussard is a constructive trustee for any property or monies he receives that are to be awarded to Turner under the agreement and "as such is acting in a fiduciary capacity with regard to her interests." Turner also alleges that Broussard is "guilty of fraud in connection with the divorce agreement and is furthermore liable for punitive damages."
*227 (2) Breach of Contractual Alimony Obligations. In paragraphs 12-15, Turner alleges that Broussard breached sections 3.02 and 3.03 of the divorce agreement, which require him to pay Turner $6,600 per month as contractual alimony and to prepay Turner a portion of the alimony. Turner alleges that failure to pay the alimony payments "as the parties agreed is a breach of contract."
(3) 1992 Personal Billings. In paragraphs 16-17, Turner alleges that Broussard failed to pay Turner 50% of all payments received by Broussard arising from his 1992 "Personal Billings" as required by schedule 2, section 11 of the divorce agreement.
(4) KCB & G Outplacement Company. In paragraphs 18-21, Turner alleges that Broussard failed to pay Turner 50% of all payments he received as a result of the sale of a certain entity, KCB & G, to AIM, Inc., as required by section 7, schedule 2 of the divorce agreement. She complains of accountings prepared by Peterson, because Peterson owes "allegiance to Broussard and the corporations in which Broussard owns an interest."
(5) Improper Income Deductions. In paragraphs 22-24, Turner alleges that Broussard made improper income deductions in calculating his alimony prepayment obligations under section 3.03 of the divorce agreement.
(6) Insurance Policy. In paragraphs 25-26, Turner alleges that Broussard failed to maintain a life insurance policy naming Turner as an irrevocable beneficiary, as required by the divorce agreement.
(7) Industrial Transformation, Ltd. Union/Labor Management Initiative Payments. In paragraphs 27-31, Turner alleges that Broussard failed to pay Turner 50% of all pre-tax revenues paid directly or indirectly to Broussard from KCB's union/labor management initiative conducted through Industrial Transformation, Ltd., as required by section 10, schedule 2 of the divorce agreement.
(8) KCB Holding Company Stock. In paragraphs 32-34, Turner alleges that she is entitled to the stock under section 2.02 of the divorce agreement, which provides that any community property omitted from the schedule to the divorce agreement shall be awarded to the party not in possession. The stock of KCB Holding Company was omitted from the schedules, and Broussard was in possession of such property.
(9) Tekniko License Debt Payment. Broussard received a distribution in connection with a Tekniko License, based on a separate debt that existed prior to the divorce agreement. In paragraphs 35-37, Turner alleges that the prior obligation was community property; therefore, she is entitled to payment under section 2.02 of the divorce agreement.
(10) Concealment of Bonus Rights. In paragraphs 38-41, Turner alleges that she is entitled to bonus rights under section 2.02 of the divorce agreement. Turner alleges that a unanimous consent of the board of directors of KCB Holding Co. deferred Broussard's bonus rights for 1993 and 1994, and Broussard omitted the bonus rights from the schedule of the divorce agreement.
(11) Breach of Fiduciary Duty/Constructive Fraud. In paragraph 42, Turner alleges, "Broussard, as Turner's *228 former spouse, becomes partner and pursuant to the terms of the Divorce Agreement had a fiduciary relationship with and a fiduciary duty to Turner." Turner claimed that Broussard violated these duties by forgiving KCB's obligations to pay 1992 personal billings, of which Turner was to receive 50%, and voting/assisting in the alleged dissolution of Industrial Transformation, Ltd.
Under the eight corners rule, we compare these allegations with the relevant D & O policy provisions to determine coverage.
The Policy Exclusions
An insurer has no duty to defend if a petition against an insured alleges facts excluded by the policy. Fidelity & Guar. Ins. Underwriters, Inc. v. McManus, 633 S.W.2d 787, 788 (Tex.1982). National Union moved for summary judgment on the basis that the D & O policy excludes coverage for claims "alleging, arising out of, based upon or attributable to" an express contract or prior litigation. Broussard and KCB respond that these exclusions do not apply, because Turner's allegations pertain at least in part to Broussard's allegiance and duty to KCB as a director and officer, and not to the Turner divorce litigation or the divorce decree contract settling that litigation.
Express Contract
Exclusion (f) of the D & O policy provides that National Union is not liable for claims "alleging, arising out of, based upon or attributable to any actual or alleged contractual liability of the Company or any other Insured under any express contract or agreement." National Union contends that the D & O policy excludes Broussard and KCB's claims because Turner's allegations arose out of an alleged liability under an "express contract"the divorce agreement. Broussard and KCB respond that Turner's petition "is riddled with allegations of malfeasance by corporate officers" and that her allegations "directly concern Broussard's conduct as an officer-not any alleged failure to abide by the divorce agreement."
Turner's suit against Broussard alleges that Broussard breached his obligations under the divorce settlement agreement by failing to pay alimony and other amounts due under the agreement. A review of Turner's amended petition, as set forth above, demonstrates that each of Turner's allegations arises out of, is based upon, and can be attributed to specific sections of the divorce decree. For example, Turner did not allege that Broussard breached any fiduciary duty in his capacity as a corporate officer or directorand the parties agree that Turner owned no stock in KCB and was not a shareholder.[6] Rather, Turner alleged that Broussard breached his constructive trustee and fiduciary duty obligations expressly established under section 7.16 of the divorce agreement. Broussard and KCB respond that a breach of fiduciary duty claim sounds in tort. In this case, however, the only breach of duty Turner alleges is one expressly created by the settlement contract. Such a claim "arises out of" and is "attributable to" the alleged breach of the divorce agreement.
Broussard and KCB further respond that certain of the alleged breaches of contract necessarily required Broussard to *229 undertake acts in his capacity as an officer of KCB. In particular, they point to paragraph 42 of Turner's petition, in which she alleges that Broussard breached the divorce agreement when he voted or assisted in the dissolution of Industrial Transformation, Ltd. Assuming that such an allegation falls within the scope of coverage under the D & O policy, it nevertheless also falls within the policy's contract exclusion, because it plainly arises out of Broussard's contractual obligation to Turner.
In addition, the jurisdiction and venue paragraphs in Turner's petition expressly refer to the divorce agreement. Turner alleges that jurisdiction is proper in the 308th District Family Court because the parties divorced in that court and "there are controversies between the parties arising under the divorce agreement which are ripe for adjudication. [Broussard] breached this agreement." Turner's venue paragraph alleges that Broussard "breached the agreement," causing damage in Harris County, Texas.
Under the eight corners rule, we evaluate whether National Union's duty to defend exists based on the allegations in Turner's petition and the D & O policy. See Merchants Fast Motor Lines, 939 S.W.2d at 142. Turner sued Broussard individually, and each of her allegations relate to Broussard's contractual liability under the divorce agreement. We hold that Turner's claims "allege, arise out of, are based upon or attributable to" the divorce agreement; therefore, exclusion (f) precludes coverage under the express contract exclusion, and the trial court properly rendered summary judgment based on this exclusion.
Prior Litigation
Exclusion (h) of the D & O policy provides that National Union is not liable for claims "alleging, arising out of, based upon or attributable to as of the Continuity Date [September 9, 1999], any pending or prior litigation." Broussard and Turner divorced in 1996; thus, the divorce litigation occurred before the 1999 continuity date. Turner sued Broussard in 2001, alleging that Broussard failed to pay alimony or other amounts due under their divorce agreement. After reviewing the allegations in Turner's amended petition, we conclude that each of Turner's allegations arises out of specific sections of the 1996 divorce decree. The prior litigation exclusion therefore precludes coverage.
Broussard and KCB rely on Whitworth v. Chiles Offshore Corp. for the proposition that the prior litigation exclusion in the D & O policy is ambiguous. No. 92-1504, 1993 WL 177186, at *1 (E.D.La. May 14, 1993). In Whitworth, the litigation alleged to trigger coverage had been pending before the insurance policy's inception date. Id. The plaintiff in the underlying litigation, however, did not name the officers and directors as defendants until after the inception date. Id. Whitworth is distinguishable, because Broussard was the sole defendant in the 1996 Turner divorce litigation, and it concluded before the D & O's policy's 1999 continuity date. Thus, no interpretive issue as to whether the divorce litigation was "prior" to the inception date arises. The prior litigation exclusion is not ambiguous in this case, and the trial court properly rendered summary judgment for National Union based on this exclusion.
The Summary Judgment Affidavits
Broussard and KCB urge this court to consider extrinsic evidence in addition to the petition and policy. For example, they point to Turner's discovery responses, in which she names KCB as "a potential party" to the suit. Broussard and KCB also rely on the affidavits they filed in opposition to National Union's motion *230 for summary judgment by Broussard, Peterson, Oldham, and Fullenweider. Broussard and KCB contend that these affidavits raise a genuine issue of material fact as to whether Broussard acted solely as Turner's ex-husband or at least in part as a KCB officer/director.
Broussard and his co-officer, Peterson, offer affidavits that interpret the factual allegations in Turner's pleadings as ones involving Broussard's role as an officer and a director. Broussard's original affidavit avers that "all of [Turner's] claims for future contingency payments through me for her shares in KCB came down to a claim that I, acting as an officer and director, took actions which prevented her from receiving her interests." Broussard's amended affidavit characterizes Turner's suit as one alleging that Broussard "defrauded [Turner] out of money she was owed by abusing my power as a corporate officer and/or director." In other words, Turner's allegations concerned business decisions requiring corporate approval. In his supplemental affidavit, Peterson, the Chief Financial Officer of KCB, similarly states that Turner's allegations refer to decisions by KCB officers and/or directions to dissolve Industrial Transformation, Ltd. and to defer certain bonuses and the AIM sale.
Broussard also offers an affidavit that interprets the legal character of the Turner lawsuit. Thomas Oldham, a professor of law at the University of Houston Law Center, opines in his affidavit that Turner's suit "would have to be sounded in tort for breach of fiduciary duty based on Broussard's being a shareholder, officer, and director of KCB. There was not a claim for breach of contract against him for failure to perform a specific provision of the [divorce agreement] because he didn't breach that agreement."
Broussard urges that these affidavits create a fact issue as to coverage, because they cast a different light on the allegations in the petition. The Texas Supreme Court, however, has never recognized an exception to the strict eight corners rule so as to allow courts to examine extrinsic evidence in determining an insurer's duty to defend. Landmark Chevrolet Corp. v. Univ. Underwriters Ins. Co., 121 S.W.3d 886, 890 (Tex.App.-Houston [1st Dist.] 2003, pet. filed). Moreover, even the Texas appellate courts that have allowed such evidence have done so in the most limited of circumstances. For example, in State Farm Fire & Cas. Co. v. Wade, the Corpus Christi Court of Appeals considered extrinsic evidence about the use of a boat that was the subject of the policy, because the court could not determine whether the personal boat owner's private liability policy provided coverage. 827 S.W.2d 448, 453 (Tex.App.-Corpus Christi 1992, writ denied). The court held that the boat's use at the time of the accidentwhether commercial or privatewas an essential fact of coverage that did not question the truth or falsity of any facts alleged in the underlying petition. Id. Here, the Turner petition specifically alleges acts that give rise to liability under the settlement agreement-which expressly determine that coverage is excluded.
For further support, Broussard and KCB cite to Utica Lloyd's of Texas v. Sitech Engineering Corp., in which the Texarkana Court of Appeals, citing to the Wade exception, stated that a court may consider extrinsic evidence if the policy terms are ambiguous, or the petition does not contain factual allegations sufficient to enable the court to determine whether the claims are within the policy coverage. 38 S.W.3d 260, 263 (Tex.App.-Texarkana 2001, no pet.). The Utica court, however, held that the trial court had erred in considering extrinsic evidence in that case, as *231 neither of the exceptions applied. Id. at 263-64. Similarly, in this case, we find the factual allegations in the Turner petition sufficient to determine whether the prior litigation and breach of contract exclusions apply.
Finally, our court has rejected the Wade exception and applies a strict eight corners rule. Landmark Chevrolet, 121 S.W.3d at 890-91; Tri-Coastal Contractors, Inc. v. Hartford Underwriters Ins. Co., 981 S.W.2d 861, 863-64 (Tex.App.-Houston [1st Dist.] 1998, pet. denied). We observe that the Fifth Circuit also recently made an Erie guess[7] that the Texas Supreme Court does not recognize any exception to the strict eight corners rule:
In light of the Texas appellate courts' unwavering unwillingness to apply and recent repudiations of the Wade type of exception, this Court makes its Erie guess that the current Texas Supreme Court would not recognize any exception to the strict eight corners rule. That is, if the four corners of the petition allege facts stating a cause of action which potentially falls within the four corners of the policy's scope of coverage, resolving all doubts in favor of the insured, the insurer has a duty to defend. If all the facts alleged in the underlying petition fall outside the scope of coverage, then there is no duty to defend. However, in the unlikely situation that the Texas Supreme Court were to recognize an exception to the strict eight corners rule, we conclude any exception would only apply in very limited circumstances: when it is initially impossible to discern whether coverage is potentially implicated and when the extrinsic evidence goes solely to a fundamental issue of coverage which does not overlap with the merits of or engage the truth or falsity of any facts alleged in the underlying case.
Northfield Ins. Co. v. Loving Home Care, Inc., 363 F.3d 523, 531 (5th Cir.2004).
We follow our precedent and decline to apply an exception to the eight corners rule. See Landmark Chevrolet, 121 S.W.3d at 891; Tri-Coastal, 981 S.W.2d at 863-64. We therefore do not consider Broussard's extrinsic evidence about the pleadings of the underlying case. See Landmark Chevrolet, 121 S.W.3d at 891; Tri-Coastal, 981 S.W.2d at 863-64.
Cross-Issue: Scope of Coverage
In its cross-issue, National Union contends that the trial court should have granted National Union's original summary judgment on its alternative ground that Broussard and KCB's claims are not within the scope of the coverage under the D & O policy. We hold that the trial court properly granted National Union's supplemental motion for summary judgment based on the policy exclusions. We therefore need not address whether Turner's petition alleges wrongful acts that afford D & O coverage under the policy under circumstances in which the two exclusions do not apply.
Conclusion
Under the eight corners rule, National Union's duty to defend depends on the allegations in Turner's petition and the scope of coverage established in the D & O policy. We hold that trial court properly granted National Union's motion for summary judgment based on the contractual liability and prior litigation policy exclusions. *232 We therefore affirm the judgment of the trial court.
NOTES
[1] The parties do not distinguish between National Union's defense and indemnification obligations in evaluating coverage under the policy. Thus, we similarly evaluate the two obligations together.
[2] The 308th District Court of Harris County issued the divorce decree. Turner sued Broussard in the same court, alleging that jurisdiction was proper because "there are controversies between the parties arising under the divorce agreement which are ripe for adjudication."
[3] National Union issued the D & O policy number XXX-XX-XX, which ran from September 9, 1999 to January 5, 2001. National Union renewed this policy with number XXX-XX-XX, which ran from January 5, 2001 to January 5, 2002. Turner filed her suit on January 30, 2001; therefore, the second policy is applicable. The relevant provisions of both D & O policies are identical.
[4] Peterson is the chief financial officer of KCB; Oldham is a professor of law at the University of Houston Law Center; and Fullenweider is the attorney for KCB and Broussard.
[5] In opposition to National Union's original motion for summary judgment, Broussard and KCB filed affidavits by Broussard, Peterson, and Oldham. In opposition to National Union's supplemental motion for summary judgment, Broussard and KCB filed Broussard's original affidavit and a revised affidavit, Oldham's original affidavit, Fullenweider's revised affidavit, and Peterson's revised affidavit.
[6] Broussard and KCB contend that Turner was a "putative" shareholder. Turner, however, never characterizes her claims against Broussard as shareholder claimsputative or otherwisenor does she allege that her claims against Broussard arise out of any obligation separate from the divorce settlement agreement.
[7] Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938); Transcontinental Gas Pipe Line Corp. v. Transp. Ins. Co., 953 F.2d 985, 988 (5th Cir.1992) ("[I]t is the duty of the federal court to determine as best it can, what the highest court of the state would decide."). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558351/ | 22 So.3d 697 (2009)
GENERAL ASPHALT COMPANY, INC., a Florida Corporation, for the use and benefit of Liberty Mutual Insurance Company, a Foreign Corporation; and Liberty Mutual Insurance Company, a Foreign Corporation, on its own behalf, Appellants,
v.
BOB'S BARRICADES, INC., Appellee.
No. 3D08-3035.
District Court of Appeal of Florida, Third District.
November 12, 2009.
Rehearing Denied December 15, 2009.
Restani, Dittmar & Hauser, and Helen Ann Hauser, for appellants.
Wicker, Smith, O'Hara, McCoy & Ford, and Shelley H. Leinicke, for appellee.
*698 Before RAMIREZ, C.J., and LAGOA and SALTER, JJ.
RAMIREZ, C.J.
General Asphalt Company, Inc. and Liberty Mutual Insurance Company appeal the trial court's entry of final summary judgment in favor of Bob's Barricades. We affirm the trial court's order because Bob's Barricades, General Asphalt's subcontractor, owed no duty to indemnify General Asphalt.
This case involves a dispute over insurance coverage arising from a tort liability suit in which an injured motorist sued General Asphalt and Bob's Barricades. The injured motorist sued to recover for injuries she received when she lost control of her car along the road General Asphalt and Bob's Barricades worked on.
In accordance with the contract between General Asphalt and Bob's Barricades, Bob's Barricades was to add General Asphalt as an additional insured to its insurance coverage for any suits arising out of Bob's Barricades duties under the contract. In her complaint, the injured motorist listed causes of action against both General Asphalt and Bob's Barricades.
Bob's Barricades and its primary insurance carrier, Lexington Insurance Company, reached a settlement agreement with the injured motorist for $1 million. In turn, the injured motorist released Bob's Barricades not only from the direct negligence claims against it, but also for any vicarious liability anyone else might have that resulted from Bob's Barricades actions. The injured motorist still preserved her claims against General Asphalt for any direct negligence claims she had against it.
General Asphalt eventually settled with the injured motorist for $7.25 million, a sum that included Liberty Mutual's $1 million primary contribution limit plus contributions from both General Asphalt and Bob's Barricades excess insurance carriers. After this, General Asphalt's excess insurer, Great American Insurance Company, brought an action in federal court against Bob's Barricades primary and excess insurer, National Union Fire Insurance, seeking to recover Great American's contributions to the settlement. See Great American Ins. Co. v. National Union Fire Ins. Co. of Pittsburgh, Pa., 574 F.Supp.2d 1294 (S.D.Fla.2008), ___ Fed.Appx. ___ (11th Cir.2009). The Southern District of Florida concluded that Great American could not recover against Lexington or National because Lexington did not owe General Asphalt a duty to defend or indemnify.
General Asphalt and Liberty filed claims against Bob's Barricades for alleged breach of contract for failure to defend and indemnify General Asphalt in the liability claim by the injured motorist. Following the results in the federal court proceedings, Bob's Barricades moved for summary judgment. The trial court found that Bob's Barricades satisfied its contractual duties to General Asphalt and granted summary judgment in favor of Bob's Barricades.
Our standard of review for the trial court's summary judgment order is de novo. Florida Dep't of Rev. v. New Sea Escape Cruises, Ltd., 894 So.2d 954 (Fla. 2005) ("A legal matter [is] subject to a de novo standard of review.").
We find persuasive, but not controlling, the Southern District's determinations as to what duties, if any, were owed in this case. After looking at the facts of the case, we agree with the trial court that Bob's Barricades did not owe General Asphalt a duty to indemnify.
Looking at the complaint filed by the injured motorist in the underlying case, we conclude that Bob's Barricades and Lexington had no duty to indemnify *699 General Asphalt. The injured motorist alleged in her complaint separate counts for each defendant and did not include a claim for vicarious liability against General Asphalt for the actions of Bob's Barricades. Florida law is clear that in order to pursue a vicarious liability claim, the claimant must specifically plead it as a separate cause of action. See Goldschmidt v. Holman, 571 So.2d 422 (Fla.1990). Under the terms of Bob's Barricades contract with General Asphalt, Bob's Barricades had a duty to indemnify General Asphalt for any claims General Asphalt might face arising from Bob's actions. In other words, Bob's Barricades had a duty to indemnify General Asphalt for any vicarious liability claims. However, the injured motorist failed to allege any vicarious liability claims in her complaint.
Further, we find that even if the injured motorist did allege vicarious liability in her complaint, Bob's Barricades met its obligations to General Asphalt when it reached the $1 million settlement with the injured motorist. As part of the settlement, the injured motorist also agreed to waive not only any direct negligence claims against Bob's Barricades, but also any vicarious liability claims she could bring resulting from the incident. Bob's Barricades thus insured that General Asphalt would not face any claims resulting from Bob's Barricades actions. As a result, the only issues that remained unresolved when General Asphalt, Liberty, and Great American settled were the injured motorist's claims against General Asphalt for its own negligence.
For the reasons stated above, we affirm the lower court's entry of summary judgment in Bob's Barricades favor.
Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2338182/ | 378 Pa. 102 (1954)
Pincus Estate.
Supreme Court of Pennsylvania.
Argued April 19, 1954.
May 25, 1954.
*104 Before STERN, C.J., STEARNE, JONES, BELL, CHIDSEY, MUSMANNO and ARNOLD, JJ.
Arthur Littleton, with him William V. Suckle, John R. McConnell and Morgan, Lewis & Bockius, for appellants.
Morris Wolf, with him Maxwell Strawbridge, Morris H. Goldman and Wolf, Block, Schorr & Solis-Cohen, for appellees.
OPINION PER CURIAM, May 25, 1954:
The decree of the Court below is affirmed on the following excerpts from the Opinion of President Judge EDWARD LEROY VAN RODEN which denied a petition for review:
"This proceeding involves a petition filed on behalf of decedent's widow and children praying that the first and final account of the executors of decedent's estate be reopened and reviewed to determine whether the executors should be surcharged for an alleged diminution in the value of certain shares of stock still held as an asset of the estate.
*105 ". . . the court finds the facts to be as follows: Decedent died November 23, 1949. By his last will and testament dated July 29, 1948, duly admitted to probate on December 2, 1949, decedent created a full marital deduction trust for the benefit of his widow, Theresa, and placed the rest of his estate in trust for the benefit of his son, Lionel, and his daughter, Shirley. He designated his nephew, Irwin Nat Pincus, and his attorney, Samuel A. Goldberg, Esquire, as executors, trustees and guardians, with the further provision that when Lionel should attain his majority, he was to become co-executor and co-trustee. At the time of decedent's death, Lionel was not quite 19 years of age. Accordingly, the other two executors took over the administration of the estate, but from time to time they consulted with Lionel, whose opinion and business acumen they apparently respected.
"At the time of his death, decedent was the owner of 1580 shares of the corporate stock of Pincus Bros., Inc., a men's clothing manufacturing concern. The said corporation had a total of 6328 issued and outstanding shares of stock at the time of decedent's death, of which 2270 shares were held by Jacob Pincus, another brother of decedent (being the father of Irwin Nat Pincus, co-executor and co-trustee). Thus, decedent had approximately a 25% interest in said corporate stock and each of his brothers had approximately 36% interest therein.
"In addition to the manufacturing corporation, the three Pincus brothers owned substantially all the common stock of certain stores which were engaged in the retail selling of men's clothing in various cities. The brothers also owned certain real estate holdings, each having approximately a one-third interest therein. Thus, the three brothers participated in three businesses, to wit, the manufacturing business, the retail *106 business and the real estate business, and each brother (either directly or by means of a family trust which he controlled) had approximately a one-third interest in each of the three businesses, and no brother had a controlling interest in any of the three businesses.
"On June 13, 1946, being more than three years prior to decedent's death and more than two years prior to the execution of his will, the three Pincus brothers entered into a written agreement restricting the sale or transfer of stock of Pincus Bros., Inc., except among the brothers, their immediate families, and trusts for members of their families.
"On October 9, 1950, about ten months after decedent's death, Nathan and Jacob M. Pincus entered into certain written agreements for the exchange of certain shares of the manufacturing corporation and shares of the retail stores companies, as a result of which Nathan acquired the controlling interest in the manufacturing corporation and Jacob M. acquired the controlling interest in the retail stores. The trustees of various trusts for the benefit of members of each of their families likewise participated in the said stock exchanges. Irwin Nat Pincus (being the son of Nathan Pincus as well as executor and trustee under decedent's will, as aforesaid was also a trustee and beneficiary of a trust established by his father, and in such capacity entered into the stock exchange transaction on October 9, 1950. Notice of the agreements was sent to all parties in interest, including the present petitioners.
"On March 14, 1951, the executors filed their first and final account, which was duly audited and confirmed by adjudication dated May 31, 1951. Lionel came of age on March 2, 1952, and in July of that year, he and his mother and sister complained about the stock exchange transaction of October 9, 1950.
*107 "The executors filed their schedule of distribution on February 21, 1953, and on February 26, 1953, the present petition to reopen and review the adjudication was filed.
"The gravamen of the present complaint of the petitioners is that Irwin Nat Pincus violated his duty of loyalty to the beneficiaries of decedent's estate in that he personally benefitted by the stock exchange transactions, both as manager of the business and as beneficiary of the trust created by his father, and at the same time caused a corresponding detriment to the beneficiaries of decedent's estate of which he was executor and trustee in that said beneficiaries were relegated to the position of a minority corporate interest without any possibility of combining with any other interest to acquire control of the corporation. In other words, although decedent never had a controlling interest in the manufacturing corporation, he had the theoretical possibility of combining with either one of his brothers and thereby exert control by their combined two-thirds majority vote. Petitioners complain that the transfer of Jacob's interest to Nathan has foreclosed the possibility of the Henry interest participating in any combination capable of exercising control, and that as a consequence thereof, Henry's shares have declined in value to the extent of at least 30%, with the further possibility that the market for such shares has been thereby totally destroyed.
"With respect to the other executor, Samuel A. Goldberg, Esquire, the complaint is that he made no effort to prevent the execution of the stock exchange agreements by or with Nat Pincus but, on the contrary, facilitated it, and that he knew or should have known that these agreements were detrimental to the best interests of the beneficiaries of decedent's estate.
*108 "Our first inquiry must be directed to the scope of permissible review of an adjudication. The Fiduciaries Act of 1949 (Act of April 18, 1949, P.L. 512 § 721, 20 PS § 320.721) provides that, `If any party in interest shall, within five years after the final confirmation of any account of a personal representative, file a petition to review any part of the account, or of an auditor's report, or of the adjudication, or of any decree of distribution, setting forth specifically alleged errors therein, the court shall give such relief as equity and justice shall require'.
"It has been well settled, however, by judicial interpretation of Section 48 of the Fiduciaries Act of 1917, replaced by the above quoted Section 721 of the 1949 Act, that `such review will be granted as of right only (1) where there are errors of law appearing upon the face of the record; (2) where new matter has arisen since the confirmation of the account or decree; (3) where justice and equity require a review and no person will suffer thereby'. Osterling's Estate, 337 Pa. 225, 227-228 (1940), cert. den. 309 U.S. 689, 60 S. Ct. 892 (1940).
"None of these factors is present in the instant case. No error of law appearing on the face of the record has been called to the attention of the court. The only new matter alleged to have arisen since the confirmation of the account in question is the rather belated discovery by the petitioners of the nature and extent of the legal financial consequences of the stock exchange transactions. Each of the petitioners had actual notice of the said stock exchange transactions at least five months prior to the filing of the executors' first and final account. Ordinary diligence on the part of the petitioners at the time of the audit of the executors' account would have required that their complaint should have been made then and there rather *109 than to defer the filing of such complaint for a period of almost two years after the adjudication became final. At the time of audit, all the petitioners were in possession of the same facts which they now allege. Each knew of the respective stock holdings of the decedent, the brothers and the various family trusts. Likewise, each knew of the identity of each of the fiduciaries involved and the extent to which their individual interests and fiduciary obligations overlapped. The present petition seeks in effect to accomplish the filing, nunc pro tunc, of exceptions which could have been filed at the time of audit. It was never intended that the statutory proceeding for review of an adjudication should be employed merely as a device to accomplish the belated filing of exceptions. Wartman's Estate, 11 W.N.C. 403 (1882). `The aim of the law is to give finality to the adjudication of the accounts of fiduciaries.' Remick, Pa. Orphans' Court Practice, Vol. 1, § 160, p. 464; and see Gottschalk's Estate, 344 Pa. 135 (1942).
"Thus, it seems readily apparent with respect to decedent's widow and daughter, both of whom were of age and sui juris at the time of the audit and adjudication, that whatever rights they may have had with respect to questioning the stock exchange transactions were lost by their own inaction, and . . . bar them from equitable relief in this proceeding.
"With respect to decedent's son, the situation is different in that he was yet a minor at the time of audit and adjudication of the executors' account, although he was then over 20 years of age. It is strenuously argued by the respondents that because of Lionel's unusual intellectual attainments and business abilities, he should not be permitted to take advantage of the plea of infancy. With this position, the court cannot agree. A person is not sui juris at any age less than *110 21 full years, regardless of his physique, mentality, education, experience or accomplishments. Inasmuch as the said minor was not represented at the time of audit by independent counsel or by any guardian other than the testamentary guardians designated in decedent's will, being the executors and trustees concerning whose actions the said late minor now complains, and inasmuch as the said late minor filed his exceptions promptly upon attaining his majority, this court cannot in good conscience refuse him his day in court. Accordingly, we shall proceed to the merits of the controversy.
"We have here a situation where the decedent designated in his will as an executor of his estate, and one of the trustees of the trust created by said will and also one of the guardians of any minor beneficiaries, his nephew, Irwin Nat Pincus, whom decedent knew to be an active participant in the corporate management of the manufacturing concern in which decedent held approximately 25% stock interest. Decedent likewise knew that although the said Irwin Nat Pincus did not individually own any shares of the said corporation, his father, Nathan Pincus owned 36% of that stock. He further knew that the said Irwin Nat Pincus was co-trustee of a trust created by said Nathan Pincus, which said trust res included certain shares of the retail stores companies and also a one-third interest in certain real estate in which decedent was likewise interested. Furthermore, when decedent executed his will, he was fully aware of the provisions and implications of the written agreement dated June 13, 1946, wherein the three Pincus brothers restricted the sale of their shares of stock in the corporation, but specifically permitted any of the brothers to sell to the others or to trusts established by the others and their families. Thus, although there may have been a conflict *111 of interest, such conflict was created by the decedent's will and such possible conflict was fully cognizable by the decedent when he wrote his will. Under such circumstances, the evidence of the conflict of interest would not ipso facto disqualify Irwin Nat Pincus from acting as he did in connection with the stock transfers now questioned. Flagg Estate, 365 Pa. 82, 88 (1950).[*] In order to effect such disqualification, bad faith on the part of the fiduciary must be affirmatively shown. `Testamentary provisions must be given effect notwithstanding the existence of the self-dealing rule.' Ibid., at p. 92.[**]
"There is not a scintilla of evidence in the instant case which could possibly be construed as establishing bad faith on the part of Irwin Nat Pincus. Decedent was possessed at the time of his death of a minority stock interest in the manufacturing corporation. The estate still owns the same quantum of stock interest therein. Being a close corporation, a minority stock interest is not readily marketable, and there is no competent evidence in this case that this particular stock could have more readily sold prior to the above-mentioned stock exchanges than at the present time. In either case, any prospective purchaser would be wary of the majority shareholders potential for absolute control. Such majority control is now definitely centered in the hands of Nathan Pincus rather than in the combined hands of Jacob and Nathan. But the fatal flaw in the syllogistic reasoning of the petitioners is that the estate's theoretical ability to unite with either the Nathan interest against the Jacob interest, *112 or with the Jacob interest against the Nathan interest, and thus participate in majority control, never progressed beyond the realm of theoretical speculation. There is no evidence whatsoever that either Nathan or Jacob were at any time obligated, or willing, or even interested in exploring the possibility of acquiring the decedent's stock interest, whether by purchase of `locked-vote' agreement or otherwise.
"The court concludes, therefore, that Irwin Nat Pincus at all times manifested good faith in the execution of the duties imposed upon him by decedent's will, and likewise manifested good faith in respect to all of his dealings with the beneficiaries under decedent's will; that he did not consciously act to the detriment of any of the said beneficiaries, nor has any such detriment been proven in fact.
"The conflict of interest was created by the decedent with full awareness of the implications and potential results thereof. The transfer of decedent's stock interest in the manufacturing concern to one of his brothers or to one of the family trusts is not prohibited by the will, but on the contrary is expressly authorized by the written agreement which antedated the will. The resulting conflict of interest on the part of Irwin Nat Pincus is only the natural and probable consequence of the situation created by the decedent himself, and cannot be attributed to any desire or motive on the part of Irwin Nat Pincus to aggrandize his own financial interest or because of his father or family trust at the expense of the beneficiaries of decedent's estate. Accordingly, the said Irwin Nat Pincus cannot be compelled to rescind the said stock exchange transactions nor is he liable to surcharge for having entered into such transactions.
"With respect to the other respondent, Samuel Goldberg, Esquire, whom decedent designated in his *113 will as co-executor, co-trustee and guardian of minor beneficiaries, it is clear beyond doubt that decedent knew at the time he wrote his will that Mr. Goldberg was a member of the law firm of Wolf, Bloch, Schorr & Solis-Cohen, who were the attorneys for the manufacturing corporation as well as for the other Pincus interests. Thus, it is obvious that decedent was aware of a possible conflict of interest by reason of diverse loyalty obligations, but nevertheless had full confidence in the judgment, discretion and integrity of Mr. Goldberg and also was confident that Mr. Goldberg would not deliberately act to the detriment of any of the beneficiaries named in decedent's will nor would he knowingly permit his co-trustee, or his law firm, or any other party in interest to act in such manner. The evidence discloses that decedent's confidence in Mr. Goldberg was well justified and that the latter took every reasonable step to protect and promote the interests of decedent's beneficiaries. Under the circumstances disclosed by the evidence in this case, there is not the slightest basis for adverse criticism of Mr. Goldberg professionally or as fiduciary, and the petitioners' request to have a surcharge imposed upon him is utterly devoid of merit. . . ."
Costs to be paid by appellants.
NOTES
[*] See also Steele Estate, 377 Pa. 250, 103 A.2d 409.
[**] Neither Flagg's Estate nor Steele Estate relieve a trustee of the duty of acting with fidelity toward and with reasonable care and prudence for the trust estate. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2466927/ | 270 S.W.2d 682 (1954)
The STATE of Texas, Appellant,
v.
John F. MAY, Appellee.
No. 12782.
Court of Civil Appeals of Texas, San Antonio.
July 29, 1954.
*683 Gerald Weatherly, Falfurrias, for appellant.
John F. May, Karnes City, John Peace, San Antonio, for appellee.
PER CURIAM.
This is an appeal from the District Court of Duval County, Texas, from an order of Honorable Maxwell Welch, Judge of the 5th Judicial District of Texas, sitting as Special Judge of the 79th Judicial District in Duval County, refusing John G. Gonzales, Assistant District Attorney of the 79th Judicial District, leave to file a petition for a writ quo warranto against John F. May, who had theretofore been appointed as attorney pro tempore, by Judge Maxwell Welch, to prosecute and otherwise conduct certain criminal cases now pending in Duval County, as well as any other cases based upon any indictment which may be returned in the future by the present grand jury of Duval County.
There are several procedural questions raised here which we do not deem necessary to consider and determine.
The record shows that heretofore, after a full hearing, Raeburn, Norris, District Attorney of the 79th Judicial District, of which Duval County is a part, was held to be disqualified to prosecute and otherwise conduct, on the part of the State of Texas, the following criminal proceedings now pending on the docket of the District Court of Duval County, to wit: State of Texas v. C. T. Stansell, Jr., Nos. 2754, 2755, 2756, 2757, 2758, 2759, 2760, 2761, 2762, 2763, 2764, 2765, 2766, 2767, 2768, 2769, 2770; State of Texas v. George B. Parr, No. 2771; State of Texas v. R. L. Adame, Nos. 2772, 2773, 2774, 2775, 2776, 2777, 2778, 2779; State of Texas v. D. C. Chapa, No. 2780; State of Texas v. O. Carrillo, Sr., No. 2781; as well as other cases founded upon indictments which may be returned by the present Grand Jury of Duval County, Texas, and all proceedings incident to such cases.
After the disqualification of the District Attorney of the 79th Judicial District, it was stipulated by the parties that R. F. Luna, County Attorney of Duval County, was likewise disqualified, Whereupon, John G. Gonzales, Assistant District Attorney, asked that he be permitted to conduct such prosecutions, and, without hearing any further evidence, the court ruled that such Assistant District Attorney was also disqualified to conduct the prosecutions.
The court thereafter appointed John F. May, District Attorney of the 81st Judicial District of Texas, as District Attorney Pro Tempore, to conduct such prosecutions.
Gonzales then requested leave of the Supreme Court to file an original application for mandamus to compel Judge Welch to permit him to represent the State in all criminal cases pending on the docket of *684 the 79th District Court. This motion for leave to file the petition for mandamus was overruled.
Gonzales then presented to Judge Welch a motion for leave to file a quo warranto petition, questioning the authority of John F. May to conduct the prosecutions. This petition was likewise based upon the contention that Gonzales was not disqualified in such cases. This motion was overruled by Judge Welch.
The Assistant District Attorney was appointed by the District Attorney under the provisions of art. 326k-15, Vernon's Ann.Civ.Stats., and serves at the will and pleasure of the District Attorney. 34 Tex.Jur. 605, § 155; Neeper v. Stewart, Tex.Civ.App., 66 S.W.2d 812; Findley v. Calloway, Tex.Civ.App., 246 S.W. 681. Under such circumstances it would seem that if the District Attorney was disqualified, his assistant, who was appointed by him and who serves at his will and pleasure, would also be disqualified. People ex rel. Livers v. Hanson, 290 Ill. 370, 125 N.E. 268; People ex rel. Elliott v. Benefield, 405 Ill. 500, 91 N.E.2d 427; State v. Buhler, 132 La. 1065, 62 So. 145.
Appellant relies strongly upon the case of State ex rel. Drew v. Smith, 8 Ohio Dec. Reprint, 136, 5 Cinc.L.Bul. 881. In that case the Assistant District Attorney was not appointed by the District Attorney, but by a committee of judges. Thus the District Attorney did not have the power to employ or discharge such Assistant District Attorney, and a very different situation was there presented.
The trial court, after a hearing, concluded that the District Attorney and his assistant were disqualified. A record of the testimony adduced at that hearing is not before us and no contention is here made that the District Attorney was improperly disqualified. The sole contention is that, despite the disqualification of the principal, the assistant, as an appointee of the disqualified District Attorney, had a right to control the prosecution of the criminal cases involved. In our opinion, in any event the District Judge in the exercise of his discretion could properly reject the services of an appointee of the disqualified District Attorney.
We are of the opinion that this record does not show that the trial judge abused his discretion in refusing leave to file the petition for a writ of quo warranto.
The judgment of the trial court is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558574/ | 644 F.Supp.2d 612 (2008)
Marshall MARTIN, Petitioner
v.
David DIGUGLIELMO; the Attorney General of the State of Pennsylvania; the District Attorney of the County of Allegheny, Respondents.
Civil Action No. 07-1694.
United States District Court, W.D. Pennsylvania.
September 25, 2008.
*615 Marshall Martin, Graterford, PA, pro se.
Rusheen R. Pettit, Office of the District Attorney, Pittsburgh, PA, for Respondents.
MEMORANDUM OPINION AND ORDER
AMY REYNOLDS HAY, United States Magistrate Judge.
Marshal Martin ("Petitioner") seeks, by means of a Section 2254 habeas petition, to challenge the state courts' setting of bail at $150,000. Because Petitioner fails to demonstrate that the state courts' adjudication of his federal claims was contrary to or an unreasonable application of Supreme Court precedent, his petition will be denied.
Petitioner was convicted by a jury on March 26, 2002 of criminal attempt to commit homicide and firearms violations in connection with the shooting of Robert Epps, who was, at the time, a college fraternity member. The shooting arose *616 due to a fight between Petitioner and an apparent rival for the affections of Petitioner's wife. The rival was a fraternity brother of Mr. Epps.
Petitioner was sentenced to 10 to 20 years. After unsuccessfully appealing his conviction, Petitioner filed a Post Conviction Relief Act ("PCRA") Petition and after conducting a hearing, the PCRA trial court granted him a new trial based on claims of ineffectiveness of counsel. The Commonwealth appealed the order of the PCRA trial court granting the new trial to the Superior Court and that appeal is now pending. Petitioner requested bail pending appeal. Specifically, Petitioner requested house arrest, i.e., electronic monitoring. After some proceedings in the state courts, a bail hearing was conducted by the PCRA court and bail was set at $150,000 straight. Petitioner thereafter filed a petition for modification/reduction of bail, Dkt. [10-2] at 15, which was denied. Id., at 16. Rather than appeal that order, it appears that Petitioner filed a motion to modify/reduce bond in the Superior Court, which was denied by the Superior Court on June 7, 2007. Dkt. [10-2] at 20. Thereafter, Petitioner filed an application for modification/reduction of bail in the Pennsylvania Supreme Court, which denied the application on July 26, 2007. See id., at 19.
Thereafter, Petitioner filed pro se the instant Section 2254 habeas petition, Dkt. [1] and a brief in support, Dkt. [2]. Petitioner raises the following issue in that petition:
DID THE STATE COURT ERROR [sic] LEGALLY AND ABUSE ITS DISCRETION WHEN SETTING BAIL PENDING APPEAL THAT IS EXCESSIVE AND UNREASONABLE, VIOLATING THE DUE PROCESS AND EQUAL PROTECTION CLAUSES OF [the] EIGHTH AND FOURTEENTH AMENDMENTS OF THE UNITED STATES CONSTITUTION.
Dkt. [1] at 7, ¶ 12. After being granted an extension of time, the Respondents filed an answer, wherein they contend that Petitioner is not entitled to relief on the merits. Dkt. [10]. In the answer, the Respondents included, inter alia, a copy of the transcript of the bail hearing. Dkt. [10-2] at 1 to 10.
More recently, Petitioner filed a motion for judgment on the pleadings, Dkt. [15], that was denied as duplicative of the habeas petition. Dkt. [16].
A. Applicable Legal Standards
An inmate confined pursuant to a state court order may seek federal habeas corpus relief only if he is in custody in violation of the United States Constitution or federal law. 28 U.S.C. § 2241(c)(3); § 2254(a). Smith v. Phillips, 455 U.S. 209, 102 S.Ct. 940, 71 L.Ed.2d 78 (1982); Zettlemoyer v. Fulcomer, 923 F.2d 284 (3d Cir.1991). Violations of state law or state procedural rules alone are not sufficient; a petitioner must allege a deprivation of federal rights before habeas relief may be granted. Engle v. Isaac, 456 U.S. 107, 102 S.Ct. 1558, 71 L.Ed.2d 783 (1982); Wells v. Petsock, 941 F.2d 253 (3d Cir.1991).
The parties agree that this Court's jurisdiction to entertain this petition is premised on 28 U.S.C. § 2254.[1] Because *617 Petitioner is alleging a violation of the Eighth Amendment clause banning excessive bail, he meets the threshold requirement of alleging a Constitutional violation cognizable in federal habeas proceedings. See, e.g., Sistrunk v. Lyons, 646 F.2d 64 (3d Cir.1981) (finding that the Eighth Amendment ban on excessive bail is one of the rights enshrined in the Bill of Rights that applies by the doctrine of selective incorporation against the States via the substantive due process clause of the Fourteenth Amendment). Contra Garson v. Perlman, 541 F.Supp.2d 515 (E.D.N.Y. 2008). See also Kathleen Sullivan & Gerald Gunther, Constitutional Law, 446-47 (14th ed. 2000) ("As a result of the selective incorporation technique illustrated by Duncan, all the criminal process guarantees of the Bill of Rights are applicable to the states, with the exception of the grand jury indictment provision of the 5th Amendment and arguably, the `excessive bail' provision of the 8th Amendment....").
Given that the parties present this as being properly a Section 2254 petition, the following standard of review applies. Where the state courts have reviewed a federal issue presented to them and disposed of the issue on the merits, and that issue is also raised in a federal habeas petition, AEDPA provides the applicable deferential standards by which the federal habeas court is to review the state courts' disposition of that issue. See 28 U.S.C. § 2254(d) and (e). Section 2254(d)(1), which, in light of Petitioner's arguments, is applicable herein, provides as follows:
(d) An application for a writ of habeas corpus on behalf of a person in custody pursuant to the judgment of a State court shall not be granted with respect to any claim that was adjudicated on the merits in State court proceedings unless the adjudication of the claim
(1) resulted in a decision that was contrary to, or involved an unreasonable application of, clearly established Federal law, as determined by the Supreme Court of the United States
In Williams v. Taylor, 529 U.S. 362, 120 S.Ct. 1495, 146 L.Ed.2d 389 (2000), the Supreme Court has expounded upon the standard found in Section 2254(d)(1). In Williams, the Court explained that Congress intended that habeas relief may only be granted in two situations: (1) where the state court decision was "contrary to ... clearly established Federal law as determined by the Supreme Court of the United States" or (2) where that state court decision "involved an unreasonable application of[ ] clearly established Federal law as determined by the Supreme Court of the United States." The Court explained the two situations in the following terms:
Under the "contrary to" clause, a federal habeas court may grant the writ if the state court arrives at a conclusion opposite to that reached by this Court on a question of law or if the state court *618 decides a case differently than this Court has on a set of materially indistinguishable facts. Under the "unreasonable application" clause, a federal habeas court may grant the writ if the state court identifies the correct governing legal principle from this Court's decisions but unreasonably applies that principle to the facts of the prisoner's case.
Williams, 529 U.S. at 412-13, 120 S.Ct. 1495. The Court of Appeals for the Third Circuit has also elucidated the "contrary to" clause by noting that "it is not sufficient for the petitioner to show merely that his interpretation of Supreme Court precedent is more plausible than the state court's; rather, the petitioner must demonstrate that Supreme Court precedent requires the contrary outcome." Werts v. Vaughn, 228 F.3d 178, 197 (3d Cir.2000) (quoting Matteo v. Superintendent, SCI Albion, 171 F.3d 877, 888 (3d Cir.1999) (en banc), cert. denied, 528 U.S. 824, 120 S.Ct. 73, 145 L.Ed.2d 62 (1999)). In elucidating the "unreasonable application" clause, the Court in Werts v. Vaughn explained that
[i]n analyzing the "unreasonable application of" provision, we are not authorized to grant habeas corpus relief simply because we disagree with the state court's decision or because we would have reached a different result if left to our own devices. A contrary holding would amount to de novo review which we have held is proscribed by the AEDPA. Thus, the appropriate inquiry at this juncture is whether the state court's application of Supreme Court precedent was objectively unreasonable. Williams, 120 S.Ct. at 1521; Matteo, 171 F.3d at 889-90. In other words, "[t]he federal habeas court should not grant the petition unless the state court decision, evaluated objectively and on the merits, resulted in an outcome that cannot reasonably be justified under existing Supreme Court precedent." Matteo, 171 F.3d at 890.
Werts v. Vaughn, 228 F.3d at 197 (some citations omitted). Moreover, it is Petitioner's burden to prove the state court decision is either contrary to or an unreasonable application of clearly established federal law. See Matteo, 171 F.3d at 888. Under the "contrary to" clause, the "petitioner must demonstrate that Supreme Court precedent requires the contrary outcome." Matteo, 171 F.3d at 888. Under the "contrary to" clause, the relevant universe of analysis is restricted to the holdings of United States Supreme Court cases as they existed at the time of the state court decision. Williams, 529 U.S. at 412, 120 S.Ct. 1495 (the "statutory phrase [i.e., `clearly established Federal law, as determined by the Supreme Court'] refers to the holdings, as opposed to the dicta, of this Court's decisions as of the time of the relevant state court decision.").
To the best of this Court's knowledge, the Supreme Court of the United States has never held that the Eighth Amendment prohibition on excessive bail applies to the States via the incorporation doctrine of the Fourteenth Amendment's substantive due process clause. Hence, the state courts' decisions to not grant Petitioner a reduction in bail cannot, as a matter of logic, be said to be contrary to Supreme Court precedent. If the United States Supreme Court has never held that the excessive bail provision applies to the States then whatever the decision of the state courts with respect to bail cannot be contrary to the United States Supreme Court's silence on this matter. The Court presumes that it remains open to Petitioner to show that the State Courts' decision not to lower the bail below $150,000 was an unreasonable application of Supreme Court precedent. But see Dobynes v. Hubbard, 81 Fed.Appx. 188, 189 (9th Cir.2003) ("Decisions of the Supreme Court are the only ones that can form the basis justifying habeas relief; *619 `lower federal courts cannot themselves establish such a principle with clarity sufficient to satisfy the AEDPA bar.'") (quoting, Williams v. Taylor, 529 U.S. 362, 381, 120 S.Ct. 1495, 146 L.Ed.2d 389 (2000)). However, if the Supreme Court has failed to hold that the Eighth Amendment right to non-excessive bail applies to the States, it is conceptually difficult to see how the state courts' actions with respect to Petitioner's bail could be said to be an unreasonable application of Supreme Court precedent. Even if the state courts had absolutely denied bail, such would not seem to be an unreasonable application of then extant Supreme Court precedent, where the Supreme Court has failed to hold that state prisoners have any Eighth Amendment (as incorporated into the Fourteenth Amendment) right to such.
Nevertheless, assuming that Petitioner could merit habeas relief by showing that the state courts' adjudication of his bail reduction request constituted an unreasonable application of then extant federal Supreme Court precedent, Petitioner nonetheless loses, as he has utterly failed to show that the state courts' adjudication of his claim was unreasonable.
None of the cases Petitioner cites to this Court establishes the unreasonableness of the state courts' action and in fact, the cases, which he cites suggest that the setting of bail by a state court is reviewed in a federal habeas case under a highly deferential standard of abuse of discretion or of constitutional arbitrariness and that there is no absolute right to bail pending appeal. See, e.g., United States ex rel. Garcia v. O'Grady, 812 F.2d 347, 352 (7th Cir.1997) ("In determining whether the bail is `reasonably calculated,' the federal courts cannot be expected to conduct a de novo bond hearing for every habeas corpus case that comes before it. This would not only further burden the federal court system that now is having difficulty dealing with the increasing number of habeas corpus petitions, but would also represent an unwarranted interference in the operation of the state's criminal justice system. ... We also stated in Fitzgerald that `the only issue to be resolved by a federal court presented with a habeas corpus petition that complains of excessive bail is whether the state judge has acted arbitrarily in setting that bail.'"); Nowaczyk v. New Hampshire, 882 F.Supp. 18, 21 (D.N.H.1995) ("A federal court is also not empowered to `substitute its opinion as to what an appropriate amount of bail should be.' United States ex rel. Garcia, 812 F.2d at 355. Instead, `the only issue [a federal court may consider]... is whether the state judge has acted arbitrarily' in setting petitioner's bail. Id.").
Perhaps, the strongest case Petitioner cites to this Court is Bandy v. United States, 82 S.Ct. 11, 7 L.Ed.2d 9 (1961) (Douglas, J., in chambers). We note that the case is a decision rendered by a single justice, and hence of no binding force upon the federal courts. See Territorial Court of Virgin Islands v. Richards, 674 F.Supp. 180, 181 n. 2 (D.Vi.1987) ("Moreover, since he was sitting as a Circuit Justice, his decision does not carry the precedential value of an opinion of the United States Supreme Court."). Moreover, the facts of the case and the procedural posture of the case make it distinguishable from the case at hand. The facts of Bandy were that an indigent federal prisoner sought release on his personal recognizance pending disposition of his petitions for certiorari in the Supreme Court. Bail had been set by the federal courts for the indigent prisoner but he was unable to make the amount of bail. The request for release was addressed to a single justice. Notwithstanding the fact that the single Justice stated in dicta that "reflection has led me to conclude that no man should be denied release because of indigence. Instead, under our constitutional system, a man is entitled to be released *620 on `personal recognizance' where other relevant factors make it reasonable to believe that he will comply with the orders of the Court[,]" Bandy, 82 S.Ct. at 13, the single justice declined to grant such relief because the Supreme Court had "reserved decision as to whether or not a single Justice or Circuit Justice had the power to fix bail pending disposition of a petition for certiorari of that kind[ i.e., a petition for certiorari seeking review of the Circuit Court's denial of a reduction of bail]. If the relief were granted by a single Justice, it would make the petition for certiorari moot." Id.
The Bandy case involved a federal prisoner, seeking release on personal recognizance pending disposition of his petitions for certiorari and the issue presented was whether under the Federal Rules of Criminal Procedure in place at the time, the single Justice should grant such a release. The single justice declined to grant any relief under the Rules. In contrast, here we are dealing with a State prisoner who is seeking habeas relief from a state court decision regarding the proper amount of bail. Unlike in Bandy, where there were no considerations of comity, considerations of comity weigh heavily here. Unlike Bandy, we are confronted with constitutional questions not questions of interpreting the Federal Criminal Rules or the proper practice of single justices of the Supreme Court. Hence, it is clear that the holding, as opposed to the dicta in this single justice non-binding opinion, utterly fails to render the state courts' disposition of Petitioner's claims contrary to or an unreasonable application of Supreme Court precedent.
Accordingly, as Petitioner has failed to show that the state courts' disposition of his claims was contrary to or an unreasonable application of extant Supreme Court precedent, relief should be denied.
In the alternative, even if this case were not properly brought as a Section 2254 petition, (and hence Petitioner is not required to show the state courts' disposition was contrary to or an unreasonable application of Supreme Court precedent) but should be properly considered a Section 2241 petition,[2] such would not *621 change the outcome. Assuming this is properly brought as a Section 2241 petition, the burden upon Petitioner is as follows:
Moreover, bail after conviction is not constitutionally guaranteed. See Finetti v. Harris, 609 F.2d 594, 597 (2d Cir.1979) ("there is no absolute federal constitutional right to bail pending appeal after a conviction in the state courts") (cited with approval in Landano v. Rafferty, 970 F.2d 1230, 1240 (3d Cir.1992) (dicta) and Marks v. Zelinski, 604 F.Supp. 1211, 1213 (D.N.J.1985)). See also Young v. Hubbard, 673 F.2d 132 (5th Cir.1982). Nevertheless, "once a state makes provision for such bail, the Eighth and Fourteenth Amendments require that it not be denied arbitrarily or unreasonably." Finetti, 609 F.2d at 599.
In reviewing state court proceedings denying bail, "considerations of federal-state comity require that federal courts... must presume regularity on the part of the state courts and ... denial of bail without a statement of reasons is not arbitrary per se." Id. Instead, "the defendant bears the burden of showing that there is no rational basis in the record for the denial of bail." Id. at 601.
Burr v. Sherrer, No. Civ. 05-3894, 2005 WL 2007026, at *3-4 (D.N.J.2005); Levin v. Hall, 946 F.Supp. 368, 368 (E.D.Pa.1996) ("In order to demonstrate such an arbitrary or unreasonable deprivation, petitioner must demonstrate that no rational basis can be found in the record for the denial of bail pending appeal, and he has not met this burden.").
Moreover, unlike in Burr and Levin, wherein the state courts denied bail altogether, the state courts here granted bail but set it at $150,000, which is the exact amount set for Petitioner prior to his first trial. If such an amount were properly set prior to a jury ever hearing any evidence against Petitioner and before the jury found the evidence sufficient to convict him of third degree murder beyond a reasonable doubt, (and Petitioner does not contend the State Court's setting of bail prior to the first trial was unconstitutional), then surely setting the amount of bail at $150,000 after a jury found Petitioner guilty beyond a reasonable doubt cannot be unreasonable, or constitutionally excessive. Cf. Garson v. Perlman, 541 F.Supp.2d at 526 ("all of the cases [by the Supreme Court that suggest the Eighth Amendment's excessive bail clause may apply to the States] rely upon the presumption of innocence ... This consideration is obviously absent in post-conviction bail applications. The fact that there is no constitutional right to bail means that liberty pending appeal is not the norm for one convicted of a crime."). At the very least, Petitioner has not shown that there is no rational basis for setting such an amount as bail.
The hearing transcript together with the uncontroverted evidence pointed to by the Respondents in their answer,[3] i.e., Petitioner's attempt, prior to his trial, to contact a potential witness,[4] amply demonstrate *622 that the state courts were not irrational in setting the bail amount as they did. At the very least, Petitioner has not carried his burden to rebut the presumption of regularity of State proceedings and his burden to show that there is no rational basis in the record to support the state courts' determination. Hence, Petitioner's Eighth Amendment excessive bail claim affords him no relief.
In addition to an Eighth Amendment claim, Petition raises, in passing, an Equal Protection claim. Dkt. [1] at 7, ¶ 12 (referencing the Equal Protection clause); Dkt. [2] at 8 to 9.
The Equal Protection Clause of the Fourteenth Amendment provides that no state shall "deny to any person within its jurisdiction the equal protection of the laws." U.S. Const. Amend. XIV, § 1. In order "[t]o state an equal protection claim, plaintiff must show that: (1) the person, compared with others similarly situated, was selectively treated, and (2) the selective treatment was motivated by an intention to discriminate on the basis of impermissible considerations, such as race or religion, to punish or inhibit the exercise of constitutional rights, or by a malicious or bad faith intent to injure the person." Sabatini v. Reinstein, No. 99-2393, 1999 WL 636667, at *4-5 (E.D.Pa. Aug. 20, 1999). See also Zahra v. Town of Southold, 48 F.3d 674, 683 (2d Cir.1995). Essentially, to demonstrate an equal protection violation, a habeas petitioner has the burden of proving under the second prong the existence of purposeful discrimination. Hernandez v. New York, 500 U.S. 352, 111 S.Ct. 1859, 114 L.Ed.2d 395 (1991); McCleskey v. Kemp, 481 U.S. 279, 292, 107 S.Ct. 1756, 95 L.Ed.2d 262 (1987).
Petitioner only baldly alleges a denial of equal protection without any elaboration. He simply claims that the imposition of $150,000 bail violated his equal protection rights. Such an allegation fails to make out an equal protection violation because Petitioner failed to allege that others who were similarly situated to him were granted bail at a lesser amount. Indeed, in the context of individualized assessments necessarily performed by state courts in the bail context, it is difficult to establish that anyone is similarly situated to another vis a vis bail bond so as to succeed on an equal protection theory. See e.g., Sistrunk v. Lyons, 646 F.2d at 72 ("As the Supreme Court has emphasized, bail, although generally applicable, is an individualized determination. `Even on a conspiracy charge defendants do not lose their separateness or identity[.] The question when application for bail is made relates to each one's trustworthiness to appear for trial and what security will supply reasonable assurance of his appearance. Stack v. Boyle, 342 U.S. 1, 9, 72 S.Ct. 1, 96 L.Ed. 3 (1951) (opinion of Jackson, J.). The mere fact that one co-defendant had bail set at $300,000 while another co-defendant was refused bail or had his bail set at six times that amount is, without more, insufficient evidence to establish a discrimination. Yet that is all that the record discloses on this point."); Rowe v. Cuyler, 534 F.Supp. 297, 301 (E.D.Pa.1982) (it is difficult to believe that any two prisoners could be considered `similarly situated' for the purpose of judicial review on *623 equal protection grounds of broadly based discretionary decisions" such as bail), aff'd, 696 F.2d 985 (3d Cir.1982) (Table); Perry v. Vaughn, NO. CIV.A. 04-CV-0934, 2005 WL 736633, at *11 (E.D.Pa. March 31, 2005) ("Here, however, Petitioner has not identified any other similarly-situated individuals who the Board treated more favorably without a rational basis. With no averments of fact alleging the different treatment of similarly-situated persons, Petitioner cannot state a violation of equal protection. Consequently, we must dismiss Petitioner's equal protection claim as well."). Petitioner's equal protection claim fails.
Lastly, Petitioner also makes, in passing, a "due process" claim. To the extent that Petitioner is attempting to make a substantive due process claim (separate from the substantive due process claim which incorporated the Eighth Amendment excessive bail standards that Petitioner made above), such is barred by the doctrine of Albright v. Oliver, 510 U.S. 266, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994) and Graham v. Connor, 490 U.S. 386, 109 S.Ct. 1865, 104 L.Ed.2d 443 (1989). In both cases, the Supreme Court held that "where a particular Amendment provides an explicit textual source of constitutional protection against a particular sort of government behavior, that Amendment, not the more generalized notion of substantive due process, must be the guide for analyzing these claims." Albright v. Oliver, 510 U.S. at 274, 114 S.Ct. 807, citing, Graham v. Connor, 490 U.S. at 395, 109 S.Ct. 1865. This is so because, as the Third Circuit Court of Appeals has held in Sistrunk v. Lyons, the specific standards of the Eighth Amendment excessive bail apply herein. See, e.g., McCullah v. Gadert, 344 F.3d 655, 658 (7th Cir.2003) ("[C]onstitutional claims should, where possible, go forward under rights rooted in an explicit textual command of the Constitution rather than more generalized notions of substantive due process."); Vera-Natal v. Hulick, NO. 05 C 1500, 2005 WL 3005613 (N.D.Ill. Nov. 7, 2005) (applying Albright doctrine in habeas case); James v. Ramirez-Palmer, No. C 01-3893, 2001 WL 1528409, at *2 (N.D.Cal. Nov. 19, 2001) ("However, [the habeas] petitioner provides no authority for his claim that due process limits the use of prior convictions to enhance a sentence where the prior convictions predate the sentence enhancement statute. Such retroactivity concerns are addressed by the Ex Post Facto Clause, not the Due Process Clause.") (citing Albright v. Oliver); U.S. ex rel. Smith v. Nelson, No. 96 C 5589, 1997 WL 441309, at *6 (N.D.Ill. July 28 1997) (since Eighth Amendment supplied the relevant standards for determining the constitutionality of punishments, habeas petitioner had no additional claim under substantive due process).
To the extent that Petitioner is arguing a procedural due process claim, i.e., the state courts denied Petitioner a liberty interest in a lower bail without procedural protections, the Court is unconvinced. Conducting a procedural due process analysis involves a two step inquiry: the first question to be asked is whether the complaining party has a protected liberty interest within the contemplation of the Due Process clause and, if so, the second question to be asked is whether the process afforded the complaining party comported with constitutional requirements. Shoats v. Horn, 213 F.3d 140, 143 (3d Cir.2000). Assuming for the sake of argument that Petitioner had a liberty interest in bail and/or in the reduction of his bail, denying him such a reduction was not accomplished without procedural due process. It is undisputed that Petitioner had notice and an opportunity to be heard at the bail hearing conducted by the state trial court. Cleveland Bd. of Educ. v. *624 Loudermill, 470 U.S. 532, 546, 105 S.Ct. 1487, 84 L.Ed.2d 494 (1985) ("[t]he essential requirements of due process ... are notice and an opportunity to respond."). Hence, this issue does not afford Petitioner relief.
Accordingly for any and /or all of the foregoing reasons, the petition is properly DENIED. To the extent one is required, a Certificate of Appealability is DENIED.[5]
Petitioner is advised that he has the right for thirty (30) days to file a notice of appeal from our order denying his petition, see 28 U.S.C. § 2253(a); Fed. R.App. P. 4(a)(1)(A), and that our denial of a certificate of appealability does not prevent him from doing so, as long as he also seeks a certificate of appealability from the court of appeals. See Federal Rule of Appellate Procedure 22(b)(1).
NOTES
[1] Notwithstanding the parties' apparent agreement, it is not entirely clear to this Court whether we have jurisdiction over this petition pursuant to Section 2241(c)(3) or Section 2254(a). See Prince v. Bailey, 464 F.2d 544 (5th Cir.1972) (where, at time of filing application for federal writ of habeas corpus, petitioner was incarcerated awaiting state trial so that his incarceration was not pursuant to a state court judgment, federal district court was without jurisdiction pursuant to Section 2254 to consider application); McGuire v. Blubaum, 376 F.Supp. 284 (D.Ariz. 1974) (petitioner in pre-trial detention could not use § 2254 because there was no "judgment" and hence court treated petition as one filed pursuant to Section 2241). In either case, this Court definitely has jurisdiction pursuant to one or the other of the provisions. In any event, the Court of Appeals for the Third Circuit appears to have assumed that an attack on a state court's determination of bail pending retrial (in a case factually similar to the case at hand) is brought under Section 2254. Sistrunk v. Lyons, 646 F.2d 64 (3d Cir.1981). Cf. Coady v. Vaughn, 251 F.3d 480 (3d Cir.2001). However, the focus of the Sistrunk Court was whether the state prisoner had a federal constitutional right to bail, and not on whether Section 2254 or Section 2241 was the proper vehicle by which to bring the claim. Resolution of the question as to whether this is properly a Section 2254 or Section 2241 petition may have implications for the proper standard of review and the necessity of a certificate of appealability.
[2] For example, the Court in Johnson v. Chatham County Detention Center, No. CV406-196, 2006 WL 3408215, at *1 (S.D.Ga. Nov. 27, 2006), held that
Petitioner has filed a petition for writ of habeas corpus using the standard form developed for prisoners who wish to challenge the constitutionality of their convictions under 28 U.S.C. § 2254. That statute provides a habeas remedy for persons held "in custody pursuant to the judgment of a State court...." 28 U.S.C. § 2254(a). Petitioner, however, is a pretrial detainee at the Chatham County Detention Center who seeks to challenge the revocation of his bond by a state court judge. Because a state pretrial detainee is not in custody pursuant to a state court judgment, he may not utilize § 2254 but may only seek federal habeas relief to 28 U.S.C. § 2241, which provides a remedy for any person held in violation of "the Constitution, laws, or treaties of the United States," including those who have yet to be convicted and, therefore, are not held under a "judgment."
Similarly, the Court in Love v. Ficano, 19 F.Supp.2d 754, 755 n. 2 (E.D.Mich. 1998) held that
Petitioner initially filed this action under 28 U.S.C. § 2254. On July 31, 1998, petitioner filed a motion to amend the statutory authority under which his petition is being filed to 28 U.S.C. § 2241(c)(3). This Court finds that 28 U.S.C. § 2241(c)(3) is the proper statutory authority, because, inter alia, petitioner is not seeking review of his judgement of conviction in this habeas action.... In the instant case, petitioner does not seek review of his state judgment of conviction, which has already been undermined by the trial court's opinion granting him a new trial. Petitioner seeks only release on bond, arguing that the Michigan Court of Appeals unexplained order vacating his release on bond by the trial court violates due process of law. 28 U.S.C. § 2241 "applies to persons in custody regardless of whether final judgment has been rendered and regardless of the present status of the case against him." Atkins v. People of the State of Michigan, 644 F.2d 543, 545, n. 1 (6th Cir.), cert. denied, 452 U.S. 964, 101 S.Ct. 3115, 69 L.Ed.2d 975 (1981). Accordingly, this Court concludes that the instant petition is properly brought under § 2241.
See also Lewis v. South Carolina, C/A No. 9:07-1717, 2007 WL 2822243, at *2 (D.S.C. Sept. 26, 2007) ("If a person is in state custody pursuant to something other than a state court judgment, for example a state pre-trial bond order, then his habeas petition is not governed by § 2254, and he may seek relief pursuant to § 2241."), appeal dismissed by, 275 Fed.Appx. 258 (4th Cir.2008).
[3] Dkt. [10] at 5.
[4] See, e.g., United States v. Salerno, 481 U.S. 739, 765 n. 7, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987) (Marshall, J., dissenting) ("It is also true, as the majority observes, that the Government is entitled to assurance, by incarceration if necessary, that a defendant will not obstruct justice through destruction of evidence, procuring the absence or intimidation of witnesses, or subornation of perjury. But in such cases the Government benefits from no presumption that any particular defendant is likely to engage in activities inimical to the administration of justice, and the majority offers no authority for the proposition that bail has traditionally been denied prospectively, upon speculation that witnesses would be tampered with.").
[5] This Court need not definitively resolve whether a COA is needed because the Court of Appeals has discretion to treat a notice of appeal as an application for a certificate of appealability and vice versa. In either event, if Petitioner files a notice of appeal and the Court of Appeals determines that certificate of appealability is needed, that Court certainly has the discretion to treat the notice of appeal as a request for a certificate of appealability and act accordingly. See Slack v. McDaniel, 529 U.S. 473, 483, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000) ("as AEDPA applied, the Court of Appeals should have treated the notice of appeal as an application for a COA."); Lozada v. United States, 107 F.3d 1011, 1017 (2d Cir. 1997) ("we will treat the notice of appeal as a `request' for a COA"), overruled on other grounds by, United States v. Perez, 129 F.3d 255, 259-60 (2d Cir.1997); Fed.R.App.P. 22(b) ("If no express request for a certificate is filed, the notice of appeal constitutes a request addressed to the judges of the court of appeals."). Alternatively, if the petitioner files a request for a certificate of appealability, but should have filed a notice of appeal, the Court has discretion to consider it as such. See, e.g., United States v. Spencer, 21 Fed.Appx. 803, 804 (10th Cir.2001) ("We agree that Mr. Spencer's filing of his COA application constitutes a timely filing of a notice of appeal.") (citing, Rodgers v. Wyoming Att'y Gen., 205 F.3d 1201, 1205 (10th Cir.2000) ("A document, such as an application for a ... certificate of appealability, is the functional equivalent of a notice of appeal if it contains the three elements ... required by Rule 3(c)."), overruled on other grounds as recognized by, Moore v. Marr, 254 F.3d 1235, 1239 (10th Cir.2001)). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558255/ | 22 So.3d 539 (2009)
PUNSKY
v.
CLAY COUNTY SHERIFF'S OFFICE.
No. SC09-879.
Supreme Court of Florida.
November 10, 2009.
Decision Without Published Opinion Review denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558290/ | 22 So.3d 807 (2009)
Ivan Waylen EASTERLY, Appellant,
v.
STATE of Florida, Appellee.
No. 1D08-3802.
District Court of Appeal of Florida, First District.
November 24, 2009.
*808 Brooke Elvington, Tampa, for Appellant.
Bill McCollum, Attorney General, and Trisha Meggs Pate, Assistant Attorney General, Tallahassee, for Appellee.
LEWIS, J.
Ivan Waylen Easterly, Appellant, seeks review of his conviction of engaging in sexual activity with a minor between the ages of twelve and eighteen while in a position of familial or custodial authority. He raises three issues: (1) whether the trial court abused its discretion in declining to dismiss the State's second amended information due to its refusal to narrow the timeframe of the charged offenses; (2) whether the trial court abused its discretion in admitting similar fact evidence; and (3) whether fundamental error occurred when the prosecutor argued, in the State's rebuttal closing argument, that the evidence had "torn away" the presumption of innocence. Finding no error, we affirm and write to explain our decision.
FACTS
The State filed an amended information charging Appellant with two crimes: engaging in sexual activity with a child twelve years of age or older but less than eighteen, while standing in a position of familial or custodial authority, in violation of section 794.011(8)(b), Florida Statutes (2004) (count one); and unlawful activity by a person twenty-four years of age or older with a person sixteen or seventeen years of age, in violation of section 794.05, Florida Statutes (2004) (count two). The time period alleged for the commission of both crimes was "on or about or between April 1, 2004, and June 30, 2004." The alleged victim was K.D., who was Appellant's stepdaughter and the mother of his *809 biological child, according to the State's uncontested evidence.
Upon Appellant's motion, the trial court ordered the State to file a statement of particulars with as much detail as possible about the date, time, and location of the offenses. After the State failed to timely comply with the order, Appellant filed a motion to compel the State's compliance. In response, the State filed a second amended information, which contained essentially the same language as the amended information, except that it added an allegation that the offense listed in each count occurred "one or more times." Appellant, in turn, filed a motion to dismiss, arguing that the alleged offenses were not "continuing offenses" and that the changes in the second amended information had compounded the problem by making issues of time, date, and place more uncertain.
At a hearing on the motion, defense counsel argued that the State was required to narrow the timeframe because it knew of at least two separate dates when K.D. alleged Appellant sexually abused her. The prosecutor explained that Appellant had sexually abused K.D. on a regular basis, but that K.D. could recall only one or two specific incidents. The prosecutor further explained that K.D. had a clear memory of one incident in particular and that the State intended to elicit the details of that event at trial. Finally, the prosecutor argued that the State's difficulty in narrowing the timeframe resulted from the fact that, although it had conclusive evidence that K.D. had conceived a child by Appellant, there was no evidence that either of the specific incidents K.D. recalled was the one that led to the conception.
Defense counsel argued that the issue was not when K.D. became pregnant, but when she was sexually abused. Defense counsel pointed out that, in deposition, K.D. had specifically described an incident that occurred on May 1, 2004, and one that occurred on May 2, 2004. The court asked defense counsel if he was willing to stipulate to one of those incidents as the one that resulted in the pregnancy, and defense counsel responded that he was not required to do so. The trial court denied the motion to dismiss, opining that the State had narrowed the timeframe as much as possible.
The State had previously filed a Williams[1] rule notice, indicating that it intended to introduce evidence of five offenses that Appellant perpetrated against K.D. outside the timeframe alleged in the information. Two of these offenses occurred between February 1, 2001, and March 24, 2001; one occurred between March 25, 2001, and December 31, 2001; and two occurred between January 20, 2005, and March 19, 2005. The offenses varied in detail, from the fondling of K.D.'s breasts and vaginal area, to penile-vaginal penetration or union, to the penetration of or union with K.D.'s vagina by Appellant's tongue. One of the offenses included the use of force. The State alleged that three of these offenses occurred in the family home in the vicinity of Chiefland, Florida, and two occurred in the family home in the vicinity of Trenton, Florida.
Appellant filed a motion in limine, arguing that the proposed Williams rule evidence was improper because his identity was not at issue and the acts were not similar enough to one another. He also argued that, due to the number of incidents and the length of time they spanned, the proposed Williams rule evidence would become a feature of the trial.
After hearing oral arguments from both parties, the trial judge observed that, *810 based on arguments he had previously heard, it appeared that Appellant intended to argue that he was asleep when he impregnated K.D. and did not know what he was doing. The judge opined that if Appellant raised such a defense, the number of instances would "become relevant as to whether that was a reliable defense." The trial court also agreed with the State that the evidence was admissible to show absence of mistake, and accordingly, denied the motion in limine.
Prior to trial, Appellant requested a special jury instruction, which included his knowledge that he was committing the charged act as an element of the crime. The trial court denied the request, determining instead to use the standard instruction. The case proceeded to trial.
In the defense's opening statement, counsel conceded that K.D. was sixteen years old in April, May, and June of 2004 and that a DNA test established that her child's DNA matched Appellant's DNA. Defense counsel stated that Appellant had "no clue" how K.D. became pregnant with his child and that he could only speculate. Defense counsel alleged that "there was one event," that Appellant could not describe it, and that Appellant "was not the one [who] initiated it."
K.D. gave the following testimony. One night between April 1, 2004, and June 30, 2004, she was alone with Appellant in the family home in Trenton. The home was not air-conditioned, so K.D. went to lie down in the coolest room in the house, the one Appellant and her mother shared. K.D. later awoke to find Appellant under the covers with her, fondling her breasts and, later, her vagina. She tried to push Appellant off of her and to knee him, but he did not stop. Later in the encounter, Appellant "started performing penis-vaginal" intercourse. K.D. again tried to push Appellant off and to knee him, and Appellant held her by the shoulders, pushing her "more down onto the bed." During this encounter, Appellant's eyes were closed but would "open once in a while, basically quiver[ing] open and then close, like he was trying to pretend that he was asleep." Appellant had sexual intercourse with K.D. more than once between April 1, 2004, and June 30, 2004, but she could specifically recall only one incident that occurred during that timeframe.
K.D. testified that she learned she was pregnant in June of 2004 and that her child was born on January 19, 2005. The State later presented evidence that, based on a DNA test, there was a greater than 99.99 percent probability that Appellant was the biological father of this child. Based on this evidence, an expert in forensic DNA and population genetics opined that Appellant was the father.
After the trial court gave a limiting instruction regarding the Williams rule evidence, K.D. testified as follows regarding three events that occurred in the family home in Chiefland. K.D.'s first sexual encounter with Appellant occurred when she was "about 12 going on 13." At that time, K.D. and her sister were sharing a bedroom, and Appellant came in to say "good night." K.D. was lying on a mattress on the floor, and her younger sister was lying in a twin bed. After saying "good night," Appellant lay on the floor next to K.D. and acted as if he had fallen asleep. As K.D. was beginning to fall asleep, she felt Appellant's arm around her. Appellant had placed his hand under her shirt and was beginning to fondle her. K.D.'s sister was "sound asleep" at the time. There was no talking between K.D. and Appellant. Appellant later began to fondle her vaginal area. A week or two later, Appellant repeated the "same general routine," but this time, he engaged in penile-vaginal intercourse with her. Another incident occurred *811 where Appellant woke K.D. up and "started performing oral sex on [her]." This incident also occurred while she was sleeping in the room with her sister.
K.D. testified that Appellant continued to sexually abuse her after she gave birth. Specifically, she recalled an incident that occurred when her family was moving residences. Because the family had already packed most of its belongings, there was only one bed in the house, the one that Appellant and K.D.'s mother had shared. K.D. went to sleep on that bed and was awakened by Appellant, who was having vaginal intercourse with her.
K.D.'s sister testified that she had never seen Appellant "wandering around at night" and had never awakened to find him near her bed.
In his own defense, Appellant testified that K.D. would sometimes sleep on a camping mat, but that he had never gone into her bedroom and lain down next to her on the mat. He denied ever touching K.D. "in her sexual, private areas" or fondling her breasts or vaginal area while the family was living in Chiefland. He also denied having had "any sort of sexual intercourse" with K.D. in that home. Appellant testified that, to his knowledge, he had also never sexually molested K.D. in the home in Trenton or at any time after the birth of her child.
Appellant further testified that he would often awake to find K.D. in the bed with him instead of his wife. He stated that he would argue with his wife about this occurrence and that it would then "stop for a short period of time." He claimed that his wife had informed him that she would sometimes have sex with him while he was asleep. He recalled that such occurrences "gained in frequency as [they] were married a longer time" and continued throughout the marriage. Appellant testified that when he heard of the accusations against him, he requested a DNA test because "[w]hat was being said wasn't rationale [sic]," as he "had no knowledge of anything like that ever happening." Appellant's parents corroborated his claim that he had a tendency to engage in sexual intercourse while he was sleeping. They testified that Appellant's wife had bragged to them about such occurrences.
At the charge conference, defense counsel again raised the issue of inserting "knowingly" into the jury instructions. The State acquiesced in the request, and the trial court approved it. The case proceeded to closing arguments.
The State began its closing argument by echoing comments from its opening statement that K.D. had lost her childhood "at the hands of this man." The prosecutor then discussed the May 2004 incident in detail. The prosecutor argued that the May 2004 incident "was not the first time this had ever happened, nor was it the last time." Arguing that Appellant began taking a "markedly different approach" toward K.D. once she reached puberty, the prosecutor recalled some of K.D.'s testimony regarding inappropriate kissing, hugging, and compliments from Appellant. After stating that Appellant's inappropriate behavior began before K.D. was sixteen years old, the prosecutor advised the jury that it could consider the previous events only for "very specific reasons," according to the court's instructions. The prosecutor discussed testimony from Appellant's wife that he had not had any sleeping disorders and testimony from K.D.'s sister that Appellant had never approached her during the night. The prosecutor then pointed out that Appellant had "unerringly" found K.D. in the night, indicating that he was conscious of his actions. The State did not discuss the details of the pre-2004 incidents again except to state that Appellant began to abuse K.D. when *812 she reached puberty. In the State's rebuttal closing argument, the prosecutor made the following claim:
The testimonial evidence in this case, the physical evidence in this case, has not only removed the presumption of innocence from this man, it has torn it away and shown him for what he did to [K.D.] on [sic] May of 2004 when he raped her.
There was no objection to this comment. Later, the trial court instructed the jury that it must presume Appellant's innocence. The court further explained, "The presumption stays with the defendant as to each material allegation in the information through each stage of the trial unless it has been overcome by the evidence to the exclusion of and beyond a reasonable doubt."
Ultimately, the jury found Appellant guilty as charged of both counts alleged in the information. The trial court adjudicated Appellant guilty only as to the charge of engaging in sexual activity with a minor between the ages of twelve and eighteen while in a position of familial or custodial authority, and Appellant was sentenced to thirty years in prison.
ANALYSIS
I. Timeframe Alleged in Information
First, we consider Appellant's argument that the trial court erred in declining to dismiss the second amended information after the State refused to provide a statement of particulars as ordered. Generally, a trial court's ruling on a motion to dismiss based on the State's failure to comply with an order requiring a statement of particulars is reviewed under the abuse of discretion standard. State v. Del Gaudio, 445 So.2d 605, 608 (Fla. 3d DCA 1984) (limitation of holding on other grounds recognized in McKinney v. Yawn, 625 So.2d 885, 888 n. 1 (Fla. 1st DCA 1993)).
Florida Rule of Criminal Procedure 3.140(n) entitles a criminal defendant to a statement of particulars "when the indictment or information on which the defendant is to be tried fails to inform the defendant of the particulars of the offense sufficiently to enable the defendant to prepare a defense." Rule 3.140(n) provides that "[t]he statement of particulars shall specify as definitely as possible the place, date, and all other material facts of the crime charged that are specifically requested and are known to the prosecuting attorney."
The Florida Supreme Court's opinion in Dell'Orfano v. State, 616 So.2d 33 (Fla. 1993), provides strong guidance for when a trial court must require the State to narrow a timeframe alleged in an information charging crimes of child sexual abuse. In Dell'Orfano, the court considered whether a trial court erred in dismissing an information charging sexual abuse of a child because the State had failed to provide a statement of particulars narrowing the timeframe of the alleged crimes to less than twenty-seven months. See id. at 34. In considering the propriety of the dismissal, the supreme court observed that the issue implicated "two conflicting public policy concerns": (1) the State's interest in vigorously enforcing laws against child abuse; and (2) defendants' interests in being sufficiently apprised of the charges against them "such that they can prepare an adequate defense." Id. at 34. The supreme court declined to adopt a bright-line rule governing when a timeframe is too lengthy. Id. It observed, however, that "a multi-year period clearly would be excessive where the State is able to narrow the time-frame further but simply refuses to do so." Id. Similarly, the court noted, "Obviously, if the State knows the *813 specific date on which an offense occurred, the State must provide that information when ordered to give a statement of particulars." Id. at 35 n. 1.
The Dell'Orfano court held that "a trial court on a proper motion is required to dismiss an information or indictment involving lengthy periods of time if the State in a hearing cannot show clearly and convincingly that it has exhausted all reasonable means of narrowing the time frames further." Id. The court noted that a defendant would be entitled to a hearing if he or she made allegations that, if true, "would support the existence of prejudice in preparing a defense attributable to the length of time stated in the charging instrument." Id. at 35 n. 2. Under the Dell'Orfano holding, once the defendant shows entitlement to a hearing, and the State shows that it cannot narrow the timeframe, the burden shifts to the defendant to show that the defense more likely than not will be prejudiced by the length of the timeframe. Id. at 35. The Dell'Orfano court declined to hold that the twenty-seven month period at issue was too lengthy as a matter of law. See generally id. Instead, it remanded the case to the trial court for a hearing. Id. at 36.
In its arguments below, the State made it clear that the crime with which it was attempting to charge Appellant was the one that led to K.D.'s pregnancy. Although the State knew the specific date of one incident of sexual abuse, it could not be certain that this incident was the one that caused the pregnancy. At the same time, the State could not be certain that this incident did not cause the pregnancy. For this reason, it would have been improper for the State to charge Appellant with two separate crimes based on both the pregnancy and the May 1, 2004, incident.[2] To be sure the timeframe alleged in the information captured the act that led to the pregnancy, the State needed to expand it beyond May 1, 2004.[3]
We are aware that the State could have chosen to proceed specifically on the May 1, 2004, incident without attempting to prove that Appellant fathered the victim's child. However, the State's decision to charge Appellant for the offense that led to the pregnancy, even though it could not pinpoint a date of the offense, was a matter of prosecutorial discretion. In Dell'Orfano, the supreme court noted, "[C]ommon sense dictates that admitted wrongdoing should not be shielded from prosecution merely because the State is unable to provide greater specificity in an information or indictment." Dell'Orfano v. State, 616 So.2d 33, 35 (Fla.1993). Similarly, when evidence as conclusive as a defendant's fathering his stepdaughter's child exists, the defendant should not be shielded from prosecution for the offense leading to that pregnancy simply because the State cannot isolate the date of the offense leading to the pregnancy. Under the circumstances of this case, the State satisfied the Dell'Orfano requirement that it exhaust all reasonable means of narrowing the timeframe.
*814 Moreover, even if the State had not satisfied that requirement, Appellant did not show prejudice in the State's failure to narrow the timeframe further, which he was required to do under the supreme court's opinion in Dell'Orfano. Although the State did not provide the date of the May 1, 2004, incident in a statement of particulars, Appellant was aware that the State would question K.D. regarding this incident. Appellant was prepared to cross-examine her about the date of that offense, but he chose not to do so. Furthermore, at the pre-trial hearing, Appellant did not argue that he had an alibi defense or any other defense that would have made the narrowing of the three-month timeframe advantageous to him. In view of these facts, the three-month timeframe, which is far shorter than the timeframes in the cases Appellant cites, was not excessive, and the trial court did not abuse its discretion in refusing to dismiss the case.
II. Similar fact evidence
Next, we consider Appellant's argument that the trial court erred in admitting evidence of the other acts of sexual abuse he perpetrated against the victim. A trial court's decision to admit similar fact evidence, or Williams rule evidence, is reviewed for abuse of discretion. See Moore v. State, 943 So.2d 296, 297 (Fla. 1st DCA 2006) (finding no abuse of discretion in the admission of evidence of similar acts of child molestation); Hodges v. State, 885 So.2d 338, 357 (Fla.2004) (stating, generally, that the admission of collateral crime evidence is within a trial court's discretion).
Under the Williams rule, evidence of a criminal defendant's other crimes or bad acts is generally admissible if it is relevant to a material fact in issue, unless it is relevant only to demonstrate the defendant's bad character or propensity to engage in criminal conduct. Hodges, 885 So.2d at 357 (citing Williams v. State, 110 So.2d 654, 663 (Fla.1959)). Generally, such evidence is admitted to show "motive, intent, absence of mistake, common scheme, identity or a system or general pattern of criminality." Schwab v. State, 636 So.2d 3, 7 (Fla.1994) (quoting Williams, 110 So.2d at 662)). The Williams rule has been codified at section 90.404(2)(a), Florida Statutes (2007), which provides as follows:
Similar fact evidence of other crimes, wrongs, or acts is admissible when relevant to prove a material fact in issue, including, but not limited to, proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident, but it is inadmissible when the evidence is relevant solely to prove bad character or propensity.
Courts applying the Williams rule have observed that "the relevance of collateral crime evidence is often a function of similarity." McLean v. State, 934 So.2d 1248, 1255 (Fla.2006) (citations omitted). As a general rule, similarity is of particular importance when the similar fact (or collateral crime) evidence is being admitted to show identity, absence of mistake, or common plan or scheme. Id.
The Legislature has adopted a relaxed standard of admissibility for similar fact evidence in child molestation cases. See § 90.404(2)(b), Florida Statutes (2007); McLean, 934 So.2d at 1258-59. Section 90.404(2)(b) states, "In a criminal case in which the defendant is charged with a crime involving child molestation, evidence of the defendant's commission of other crimes, wrongs, or acts of child molestation is admissible, and may be considered for its bearing on any matter to which it is relevant." The Florida Supreme Court has explained that this provision "broadly provides that evidence of the defendant's *815 commission of other acts of child molestation is admissible regardless of whether the charged and collateral offenses . . . share any similarity." McLean, 934 So.2d at 1259.
Even under the relaxed standard of admissibility codified at section 90.404(2)(b), however, evidence of other acts of child molestation is subject to relevancy requirements and the section 90.403 balancing test. McLean, 934 So.2d at 1259. For this reason, the similarity of the charged offense to the collateral offenses is still important to a trial court's decision regarding the admissibility of the collateral offenses. Id. As the supreme court explained in McLean, the less similar the collateral offenses are to the charged offense, the less relevant they are and the more likely it is that their probative value will be "substantially outweighed by the danger of unfair prejudice, confusion of issues, misleading the jury, or needless presentation of cumulative evidence." Id. (quoting § 90.403, Fla. Stat. (2005)). The McLean court cautioned that, "[w]hen necessary to ensure that a defendant receives a fair trial, the trial court should either exclude the evidence or substantially limit its presentation so that it does not become a feature of the trial." Id. at 1251. Evidence of similar past acts becomes a feature of the trial when it "transcends the bounds of relevancy to the crime being charged" and "the prosecution devolves from development of facts pertinent to the main issue of guilt or innocence into an assault on the character of the defendant." Conde v. State, 860 So.2d 930, 945 (Fla. 2003) (quoting Williams v. State, 117 So.2d 473, 475 (Fla.1960)).
Here, the collateral offense evidence the trial court admitted was highly relevant due to Appellant's defense that he did not know he had molested K.D. All of the acts were similar because they occurred against the same victim in a familial setting while the victim was asleep or attempting to go to sleep. The acts show an absence of mistake and a plan, particularly because the State adduced evidence that Appellant never molested K.D.'s sister, even though he claimed to have been unaware of his actions. Appellant argues that the number of similarities is insufficient. However, the number of similarities is not as important as the nature of the similarities in comparison to the purpose in admitting the evidence because, even under the general Williams rule standard, similarity is only a way of showing relevance. Appellant argues that the evidence was irrelevant because if he was unconscious of his actions during one incident, he also may have been unconscious of his actions during the others. The State correctly argues, however, that the evidence showed that Appellant targeted K.D., as opposed to any other person in the house. The State's arguments at trial show that it used the evidence for this purpose.
Appellant contends that the collateral offense evidence was unduly prejudicial because it tended to show that he was a child predator. However, as explained above, the evidence was made necessary by the defense strategy and the jury instructions. Each separate offense made it less likely that Appellant was molesting K.D. unconsciously because the evidence showed that, each time, Appellant targeted K.D. rather than her sister, who testified that she never had an experience similar to the ones K.D. described. Under these facts, we cannot agree with Appellant that the trial court abused its discretion in determining that the potential for this evidence to cause unfair prejudice substantially outweighed its probative value.
In contesting the admission of the similar fact evidence, Appellant also argues such evidence improperly became a feature *816 of the trial, due to the State's theme that Appellant took K.D.'s childhood. This specific argument was not preserved for review by a contemporaneous objection. To preserve an argument for appeal, trial counsel must make an objection that is sufficiently specific both to apprise the trial judge of the putative error and to preserve the issue for intelligent review on appeal. Castor v. State, 365 So.2d 701, 703 (Fla.1978). If an error is not preserved, it may not form the basis for a reversal unless it constitutes fundamental error. See F.B. v. State, 852 So.2d 226, 229 (Fla. 2003). An error is generally not considered fundamental if it could have been readily cured by a contemporaneous objection. See Rodriguez v. State, 664 So.2d 1077, 1077 (Fla. 3d DCA 1995).
Below, Appellant argued that the evidence threatened to become a feature of the trial due to the number of incidents and the amount of time it would take for the State to elicit testimony about them. He did not raise any concerns regarding the State's argument that K.D.'s childhood was taken. All of the discussion of the tendency of the evidence to become a feature of the trial occurred during the pre-trial stage of the case. The theme of the State's case emerged only at trial, where there was no objection. The unfair prejudice caused by the State's theme could have been averted if Appellant had raised a proper objection when the State began its arguments regarding the loss of K.D.'s childhood. Accordingly, we find no reversible error in the trial court's allowing the State to use such a theme.
To the extent Appellant argues that the evidence became a feature of the trial independently of the State's theme, there is no error. A review of the State's arguments reveals that it did not unduly focus on the collateral offenses, other than, perhaps, by forwarding this theme. The prosecutor went into more detail about the May 1, 2004, incident than any other. He also cautioned the jury that evidence of the other acts were to be considered for limited purposes, and he made clear that the relevance of that evidence was to show absence of mistake.
III. Comment on the Presumption of Innocence
Finally, Appellant argues that fundamental error occurred when the prosecutor made the following argument to the jury:
The testimonial evidence in this case, the physical evidence in this case, has not only removed the presumption of innocence from this man, it has torn it away and shown him for what he did to [K.D.] on May of 2004 when he raped her.
Fundamental error is that which "reach[e]s down into the validity of the trial itself to the extent that a verdict of guilty could not have been obtained without the assistance of the alleged error." Odom v. State, 15 So.3d 672, 675 (Fla. 1st DCA 2009) (citations omitted). As noted above, any error that could be readily cured by a contemporaneous objection is generally not considered fundamental. See Rodriguez, 664 So.2d at 1077.
Appellant contends that the challenged comment is indistinguishable from one deemed erroneous in Nurse v. State, 932 So.2d 290 (Fla. 2d DCA 2005). In Nurse, the court opined that the following comment was "improper":
At the beginning of this trial in jury selection and when the judge read to you the law he explained to you that the defendant carries the presumption of innocence and that the State has the burden of proving this case beyond a reasonable doubt. [Mr. Nurse] no longer has that presumption.
Id. at 292. Notably, the Nurse court did not decide the case on that basis or opine *817 that the comment constituted fundamental error. See id. In fact, there was no basis for the Nurse court to decide whether the comment could rise to the level of fundamental error because the defense counsel in that case had raised a contemporaneous objection.
The comment in the instant case is distinguishable from the comment in Nurse because, here, the comment was tied directly to the prosecutor's perspective on the strength of the evidence, while in Nurse, the comment suggested that the presumption of innocence no longer applied at all, simply because the presentation of the evidence had concluded. Because the prosecutor in the instant case tied the comment to his belief that the evidence was strong, the comment comes across as an opinion about the evidence, rather than a statement of the law, unlike in Nurse. Moreover, any confusion the jurors may have had regarding the presumption of innocence was likely cleared up by the subsequent, proper instruction on the subject. Thus, Appellant has not shown error. Furthermore, even if we found the comment to be erroneous, we would not find it fundamentally so because any potential misinterpretation of the prosecutor's comment could have been readily cured by a contemporaneous objection, followed by a curative instruction.
CONCLUSION
For the foregoing reasons, Appellant's conviction for engaging in sexual activity with a person between the ages of twelve and eighteen while in a position of familial or custodial authority is AFFIRMED in all respects.
WEBSTER and DAVIS, JJ., concur.
NOTES
[1] Williams v. State, 110 So.2d 654 (Fla.1959).
[2] Although the State did charge Appellant with two separate crimes occurring during the relevant timeframe, and Appellant was found guilty as charged, the trial court did not adjudicate Appellant guilty of count two. It is unclear what facts the State was relying on to support its allegations in count two.
[3] Arguably, the State could have isolated the date of conception to within a smaller period of time. However, Appellant has not contested the State's contention that it could not do so. Instead, he has maintained simply that the date of conception is irrelevant, as he was not charged with impregnating the victim. This argument misses the point that the State's intention was to charge him with committing the offense that led to the pregnancy. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558291/ | 22 So.3d 78 (2009)
COFIELD
v.
STATE.
No. 2D08-5159.
District Court of Appeal of Florida, Second District.
October 21, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558313/ | 22 So.3d 353 (2009)
Billy J. COSSEY, Appellant,
v.
Nancy L. COSSEY, Appellee.
No. 2008-CA-00829-COA.
Court of Appeals of Mississippi.
November 10, 2009.
*354 Helen Bagwell Kelly, Adam A. Pittman, Batesville, attorneys for appellant.
Joe M. Davis, New Albany, attorney for appellee.
Before MYERS, P.J., ISHEE and MAXWELL, JJ.
MAXWELL, J., for the Court.
¶ 1. Billy J. Cossey alleges the Pontotoc County Chancery Court erred in (1) granting him a divorce from his wife, Nancy L. Cossey, on irreconcilable differences grounds; (2) awarding unreasonable visitation rights between him and his nineteen-year-old son, Tyler Cossey; (3) ordering him to pay one-half of the college expenses for Tyler; and (4) administering the equitable distribution of assets. Finding no error, we affirm.
FACTS AND PROCEDURAL HISTORY
¶ 2. Billy and Nancy have been married to each other twice. Their most recent marriage took place on March 4, 1977. The couple has three children: Dionne Guter *355 Cossey; Billy Cossey Jr.; and Tyler. Their youngest son, Tyler, was born on July 18, 1988, and was not emancipated at the time of trial.[1]
¶ 3. Billy and Nancy separated in January 2002. Over five years later, on September 5, 2007, Billy filed his complaint for divorce. He alleged adultery, desertion, and habitual cruel and inhuman treatment as grounds for the divorce. The complaint also contained an alternative claim that irreconcilable differences existed between him and Nancy. Nancy denied the allegations, and filed a counter-complaint for divorce on the grounds of desertion, adultery, and habitual cruel and inhuman treatment. In the alternative, she argued irreconcilable differences existed between the two of them. Nancy also sought legal and physical custody of Tyler. Billy denied the allegations in Nancy's counter-complaint.
¶ 4. Thereafter, on March 17, 2008, Billy and Nancy filed a consent agreement. The two agreed to a divorce based on irreconcilable differences, but set forth twenty-three separate areas of dispute for the chancellor to resolve. Among the contested issues were identification, valuation, and distribution of the marital assets. Nancy also requested past and future child support, medical expenses, and college expenses for Tyler. They also disagreed over the paternity of Tyler, whom Billy contended was not his natural son, though he had raised him as his son since birth.
¶ 5. After a two-day trial, the chancellor granted Billy and Nancy a divorce based on irreconcilable differences. The chancellor entered a twenty-eight page judgment in which he directed the equitable distribution of the marital assets, and ordered the parties and Tyler to undergo paternity testing.[2] The chancellor conditioned his rulings concerning custody, visitation, and past and future child support, medical expenses, and college expenses on the outcome of the paternity tests.[3]
¶ 6. The chancellor awarded legal and physical custody of Tyler to Nancy. He granted Billy visitation with Tyler according to Tyler's wishes. The chancellor also ordered Billy to provide child support to Nancy. The child support award was based on fourteen percent of Billy's adjusted gross income. The chancellor further held the college expenses of Tyler would be borne equally by Billy and Nancy.
¶ 7. Nancy was also awarded $10,403.05 for past school expenses, child support, and medical expenses.
STANDARD OF REVIEW
¶ 8. We will not disturb the findings of a chancellor when supported by substantial evidence unless the chancellor abused his or her discretion, was manifestly wrong, clearly erroneous, or applied an erroneous legal standard. Sanderson v. Sanderson, 824 So.2d 623, 625-26(¶ 8) (Miss.2002). We review questions of law de novo. Estate of Jones v. Howell, 687 So.2d 1171, 1174 (Miss.1996).
ANALYSIS
I. Divorce on Ground of Irreconcilable Differences
*356 ¶ 9. "[D]ivorce in Mississippi is a creature of statute." Perkins v. Perkins, 787 So.2d 1256, 1261(¶ 11) (Miss.2001) (quoting Gardner v. Gardner, 618 So.2d 108, 111-13 (Miss.1993)). A divorce based on irreconcilable differences has certain statutory requirements that must be strictly complied with. Id.; see also Irby v. Estate of Irby ex rel. Marshall, 7 So.3d 223, 239(¶ 54) (Miss.2009). Mississippi Code Annotated section 93-5-2 (Supp. 2008) provides the procedure for divorce on the ground of irreconcilable differences. Specifically, section 93-5-2(3) allows parties who desire an irreconcilable differences divorce, but cannot agree on custody, maintenance, or property division, to consent to allow the chancery court to decide the disputed issues. The consent agreement must be in writing and signed by both parties. Id. In addition, the parties must acknowledge that the decision of the court will be a binding and lawful judgment. Id.
¶ 10. Section 93-5-2(5) requires withdrawal or cancellation of a party's original denial or contest before an irreconcilable differences divorce may be granted as follows:
Except as otherwise provided in subsection (3) of this section, no divorce shall be granted on the ground of irreconcilable differences where there has been a contest or denial; provided, however, that a divorce may be granted on the ground of irreconcilable differences where there has been a contest or denial, if the contest or denial has been withdrawn or cancelled by the party filing same by leave and order of the court.
¶ 11. Billy alleges the chancellor erred in granting an irreconcilable differences divorce because the parties did not withdraw or cancel their former contests or denials, as required by section 93-5-2(5). However, Nancy argues the filing of a consent agreement, pursuant to section 93-5-2(3) satisfied the statutory requirements for a divorce based on irreconcilable differences.
¶ 12. Recently, in Irby, the supreme court addressed this identical issue. Irby, 7 So.3d at 236, 239-40 (¶¶ 43, 54). In Irby, the supreme court found that where parties filed a consent agreement in compliance with Mississippi Code Annotated section 93-5-2(3), a chancellor may order a divorce on the ground of irreconcilable differences even though the parties did not move to withdraw their contests. Irby, 7 So.3d at 239-40(¶ 54) (citing Miss.Code Ann. § 93-5-2). More specifically, the supreme court instructed:
The plain language of subsection (5) mandates that a contest or denial be withdrawn or canceled, by leave and order of the court, by the party who filed the contest or denial. This is a procedural safeguard which has existed within the framework of [s]ection 93-5-2 since its promulgation. However, the exception clause, which was added in 1990 when the statute was amended to provide for "trial by mutual consent," clearly indicates that subsection (5) should be read in conjunction with subsection (3). Once the parties fully and properly acceded to the procedural strictures of subsection (3), the safeguards provided by subsection (5) were no longer necessary.
Id. (emphasis added and internal citation omitted). We recently applied Irby's holding in Sellers v. Sellers, 22 So.3d 299, 2007-CA-01459-COA (¶ 22) (Miss. Ct.App. June 23, 2009).[4] A few months later, in *357 O'Neal v. O'Neal, 17 So.3d 572 (¶ 18) (Miss.2009), the supreme court revisited this identical issue and reaffirmed Irby's holding, noting "[t]he Irby decision made it exceedingly clear that, pursuant to Mississippi Code [Annotated] Section 93-5-2, no. . . withdrawal of the initially asserted fault-based grounds is necessary."
¶ 13. In the present case, the parties complied with the requirements of subsection (3) and filed a consent agreement prior to trial. This written agreement, which was signed by both parties, indicated "the parties have agreed there are irreconcilable differences between them and agree and consent that a divorce be granted to them on grounds [sic] of irreconcilable differences." The consent agreement also contained stipulated issues of dispute between the parties for the chancellor to determine. Further, the terms of the consent agreement made clear that after the chancellor commenced the hearing, the parties could not withdraw their consent without leave of court.
¶ 14. We find the parties provided express written consent to permit the chancellor to decide each of the issues and explicitly acknowledged they understood the chancellor's decisions would be binding. Because the parties fully and properly acceded to the procedural strictures of Mississippi Code Annotated section 95-5-2(3), we find the safeguards provided by subsection (5) namely the withdrawal of any contest or denial were no longer necessary.
¶ 15. We reach this decision, as we did in Sellers, by strictly applying the supreme court's recent interpretation of section 95-5-2(3) and (5). Accordingly, we find the chancellor did not err in granting a divorce based on irreconcilable differences.
II. Visitation
¶ 16. Billy next argues the chancellor abused his discretion in granting Billy limited visitation with Tyler. His complaint is based on the chancellor's acceptance of Tyler's desires, rather than Billy's.
¶ 17. The right and obligation for visitation ceased upon Tyler's twenty-first birthday, which was July 15, 2009. Miss.Code. Ann. § 93-11-65(8)(i); see also Caldwell v. Caldwell 579 So.2d 543, 549 (Miss.1991) ("In a general sense, parental emancipation signifies a surrender and renunciation of the correlative rights and duties touching the care, custody, and earnings of the child."). The supreme court has stated that "[c]ases in which an actual controversy existed at trial but the controversy has expired at the time of review, become moot." Allred v. Webb, 641 So.2d 1218, 1220 (Miss.1994). Because Tyler is now emancipated, this issue is moot.
III. College Expenses
¶ 18. Billy also contends the chancellor erred in requiring him to pay one-half of Tyler's college expenses.
¶ 19. "[A]n award of child support is a matter within the discretion of the chancellor and that determination will not be reversed unless the chancellor was manifestly wrong in his finding of fact or manifestly abused his discretion." Fancher v. Pell 831 So.2d 1137, 1141(¶ 20) (Miss. 2002) (citing Gillespie v. Gillespie, 594 So.2d 620, 622 (Miss.1992)). Further, "[t]he process of weighing evidence and arriving at an award of child support is essentially an exercise in fact-finding, which customarily significantly restrains [appellate] review." Id.
¶ 20. In Mississippi, the duty to send a child to college is not absolute. Wallace v. Wallace, 965 So.2d 737, *358 745(¶ 27) (Miss.Ct.App.2007). Rather, it is dependent upon the child's aptitude for college, the child's behavior toward and relationship with the parent, and the parent's ability "to pay for the education without affecting his customary lifestyle." Id. (citing Saliba v. Saliba, 753 So.2d 1095, 1101(¶ 21) (Miss.2000); Lawrence v. Lawrence, 574 So.2d 1376, 1383 (Miss.1991)). "[O]ne or both parents may be ordered to pay part or all of a child's college tuition and related expenses." Wallace, 965 So.2d at 745(¶ 27) (citing Saliba, 753 So.2d at 1101(¶ 21)). The supreme court has also held that payments of a child's educational expenses are seldom used "as offset for child support, `as they do not diminish the child's need for food, clothing and shelter.'" Fancher, 831 So.2d at 1141(¶ 23) (quoting Varner v. Varner, 588 So.2d 428, 435 (Miss.1991)).
A. Aptitude for College
¶ 21. The record reflects that Tyler is presently enrolled in community college in his fourth semester and has attained good grades. The evidence before us also shows Billy had the ability to pay for his son's college expenses without substantially affecting his customary lifestyle. In fact, Billy testified he would pay one-half of Tyler's college expenses until he turned twenty-one years old. After that, his educational support would depend upon Tyler's performance in school.
B. Behavior and Relationship with Parent
¶ 22. With regard to Tyler's relationship with Billy, it appears that prior to the couple's separation, Billy and his son had a good relationship. However, the chancellor noted the relationship began to deteriorate when Billy denied he was Tyler's father after raising him since birth.
C. Parent's Ability to Pay
¶ 23. Billy argues the chancellor did not specifically find he had the financial ability to pay Tyler's college expenses. He also complains the chancellor did not apportion Tyler's college expenses according to Billy's and Nancy's respective incomes. We note the chancellor found Billy's adjusted gross income was $2,555 per month, but he also pointed out that Billy was engaged in heavy-equipment dirt work, which resulted in "much unreported, untaxed income." In addition, the chancellor held that both Billy and Nancy would be financially secure considering the property division and child support since "[b]oth of the [parties were] gainfully employed, ha[d] their separate incomes and retirements, and [Billy] . . . exhibited an outside earning capacity in heavy-equipment work." Thus, we find the chancellor did not abuse his discretion in determining that Billy had the financial ability to pay for one-half of Tyler's college expenses.
¶ 24. Billy's argument that the chancellor must apportion college expenses between parents based on their respective incomes also lacks merit. Saliba, 753 So.2d at 1101(¶ 22). In Saliba, the supreme court considered and rejected a similar argument raised by a father who claimed the chancellor erred in equally apportioning responsibility for college expenses where the mother's net worth exceeded the father's. Id. The supreme court noted the chancellor "does not merely apply a mathematical proportionality formula" in apportioning college expenses. Id. at (¶ 22). Here, the chancellor found both parents had ample means to pay. Based on our review, the chancellor's findings on this issue are supported by substantial evidence and are not clearly erroneous.
IV. Equitable Distribution of Marital Assets
*359 ¶ 25. Chancellors have the authority to order an equitable division of property accumulated through the joint efforts and contributions of the parties. Christopher v. Christopher, 766 So.2d 119, 121(¶ 7) (Miss.Ct.App.2000). In equitably dividing marital property, chancellors must consider the following guidelines, commonly known as the Ferguson factors:
(1) contribution to the accumulation of property, (2) dissipation of assets, (3) the market or emotional value of assets subject to distribution, (4) the value of assets not subject to distribution, (5) the tax and economic consequences of the distribution, (6) the extent to which property division may eliminate the need for alimony, (7) the financial security needs of the parties, and (8) any other factor that in equity should be considered.
Hults v. Hults, 11 So.3d 1273, 1281(¶ 36) (Miss.Ct.App.2009) (citing Ferguson v. Ferguson, 639 So.2d 921, 928-29 (Miss. 1994)).
¶ 26. Billy acknowledges the chancellor used the correct legal standard outlined in Ferguson for the equitable distribution of marital property. However, he claims the chancellor's judgment is unclear as to which assets were subject to equitable distribution. Billy also alleges the chancellor erred by valuing Billy's retirement as of the date of trial and valuing Nancy's retirement on the date of separation.
¶ 27. This Court has held that "when making an equitable distribution of marital property, [chancellors] are not required to divide the property equally." Goellner v. Goellner 11 So.3d 1251, 1264(¶ 45) (Miss. Ct.App.2009) (quoting McLaurin v. McLaurin, 853 So.2d 1279, 1283(¶ 11) (Miss.Ct.App.2003)). And, in reviewing a chancellor's judgment concerning property division, the appellate court does not conduct a Ferguson analysis anew. Instead, the judgement is reviewed to ensure the chancellor followed appropriate standards and did not abuse his or her discretion. Goellner, 11 So.3d at 1264(¶ 45) (citing Phillips v. Phillips, 904 So.2d 999, 1001(¶ 8) (Miss.2004)).
¶ 28. Here, the chancellor's judgment consists of twenty-eight pages. Nineteen of those pages are committed to the chancellor's determination of (1) what constituted marital property, (2) his valuation of the property, and (3) the manner of distribution of the property. The chancellor was faced with the daunting task of untangling assets and allegations which arose over the course of a thirty-year marriage, including a six-year period of separation. After a thorough review, we find the chancellor fully examined each of the Ferguson factors in reaching his determination. In addition, he was confronted with evidence that Billy concealed marital property, had friends and neighbors lie about their ownership of property, and ceased contributing to his retirement account upon his and Nancy's separation.
¶ 29. While Billy complains the judgment did not clearly describe which assets were marital, the chancellor pointed out "all properties described herein are marital properties accumulated during their marriages and subject to equitable distribution, unless stated otherwise." The chancellor specifically identified the items and value of the marital property, and then directed the disposition of the property. Therefore, we find the chancellor's judgment clearly states the identity, value, and disposition of the marital property.
¶ 30. Billy next complains the chancellor erred in valuing his retirement account as of the date of trial, and Nancy's retirement account as of the date of separation. Specifically, the chancellor valued *360 Nancy's retirement as of the date of separation as "part of [the c]ourt-determined equitable distribution, as opposed to the current-amount balance." However, Billy fails to cite any authority to support his argument that the chancellor erred in valuing the retirement accounts at differing times; therefore, this issue is procedurally barred. See, e.g., Dampier v. State, 973 So.2d 221, 228-29(¶ 20) (Miss.2008) (citation omitted). Notwithstanding the procedural bar, we note the record reflects that the chancellor valued the retirement accounts after considering undisputed evidence that upon separation from Nancy, Billy discontinued contributions to his retirement account, while Nancy continued making contributions to her retirement account. Thus, we find the chancellor did not abuse his discretion in valuing the retirement accounts from different dates.
¶ 31. Further, Billy alleges the chancellor's distribution of the property is not supported by substantial evidence because it is unclear what assets the chancellor considered in entering a monetary judgment of one-half of the total assets subject to equitable distribution. The chancellor entered $343,598.59 as the total marital assets in paragraphs 23 and 24 of his corrected judgment, and awarded one-half of this amount, $171,799.29, to each of the parties.
¶ 32. After reviewing the corrected judgment, we find the chancellor's calculations were clearly based on the values assigned to all marital property set forth in the judgment. However, in comparing the original judgment with the corrected judgment, we note that it is apparent the chancellor did not accurately recalculate the total assets subject to equitable distribution upon entering his corrected judgment,[5] which revised an error found in the valuation of the lumber in the original judgment.[6] This miscalculation in the corrected judgment is obviously a clerical error, which the chancellor should be given an opportunity to correct. Using the corrected value of the lumber, the total value of assets subject to equitable distribution is $344,108.59; one-half of which is $172,054.29.
¶ 33. Though we find the chancellor did not commit reversible error in equitably dividing the property, as his calculations were properly based on all marital property, we must remand the case to the chancellor for the limited purpose of correcting the sole clerical error present in his corrected judgment.
¶ 34. THE JUDGMENT OF THE PONTOTOC COUNTY CHANCERY COURT IS AFFIRMED, AND THE CASE IS REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., LEE AND MYERS, P.JJ., IRVING, GRIFFIS, BARNES, ISHEE, ROBERTS AND CARLTON, JJ., CONCUR.
NOTES
[1] Since the trial, Tyler has become emancipated. See Miss.Code. Ann. § 93-11-65(8)(i) (Supp.2008).
[2] The chancery court later entered a corrected judgment for divorce wherein he revised typographical errors.
[3] The parties acknowledge the court-ordered paternity tests established Billy was Tyler's natural father.
[4] We note that Sellers is not a final decision due to a pending motion for rehearing. See Gray v. Univ. of Miss. Sch. of Med., 996 So.2d 75, 79(¶ 11) (Miss.Ct.App.2008) (citation omitted).
[5] We find the miscalculation in this case calls for the same course of action taken in Parker v. Mississippi Department of Human Services, 827 So.2d 18, 20(¶ 5) (Miss.Ct.App.2002). There, we remanded the case for the chancellor to correct a similar error in the chancellor's child-support order. Id.
[6] In section VII, number 2(e) of the corrected judgment, the chancellor revised a typographical error in the valuation of lumber, but did not use the substituted value when calculating the total marital assets, resulting in a $510 deficit. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1646796/ | 9 So.3d 588 (2007)
EX PARTE ERIC L. COLEMAN.
No. CR-06-1109.
Court of Criminal Appeals of Alabama.
May 18, 2007.
Decision of the Alabama Court of Criminal Appeal Without Opinion. Mandamus petition dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558424/ | 224 F.Supp. 347 (1963)
INTERNATIONAL ASSOCIATION OF MACHINISTS AND LOCAL LODGE #954, Plaintiff.
v.
SHAWNEE INDUSTRIES, INC., a subsidiary of Thiokol Chemical Company, and Jonco Aircraft Corporation, a subsidiary of Fairchild Engine and Airplane Corporation, Defendants.
Civ. No. 9696.
United States District Court W. D. Oklahoma.
November 6, 1963.
*348 Parsons & McKinney, Shawnee, Okl., for plaintiff.
*349 Mosteller, Fellers, Andrews, Snyder & Baggett, Oklahoma City, Okl., for defendant Jonco Aircraft Corp.
Spurr & Steed, Shawnee, Okl., for Shawnee Industries.
DAUGHERTY, District Judge.
This action was originally instituted in the District Court in and for Pottawatomie County, State of Oklahoma, by the International Association of Machinists and Local Lodge No. 954, hereinafter referred to as the Union, against Shawnee Industries, Inc., a subsidiary of Thiokol Chemical Company and Jonco Aircraft Corporation, a subsidiary of Fairchild Engine and Airplane Corporation, hereinafter referred to as Shawnee Industries and Jonco respectively, and removed to this Court pursuant to the provisions of 28 U.S.C.A. § 1441, this Court, exercising its jurisdiction herein pursuant to Section 301(a) of the National Labor Relations Act, 29 U.S.C.A. § 185(a) and 28 U.S.C.A. § 2201.
The plaintiff herein seeks a declaration of the respective rights of the parties under a collective bargaining agreement entered into between plaintiff and Jonco on September 20, 1959, and extended on September 20, 1960, for a period of two years. Plaintiff seeks a judgment construing this contract and based upon such construction a decree of specific performance and injunctive relief or in the alternative a money judgment for damages incurred by reason of the alleged breach of said contract.
At a pre-trial conference held on January 16, 1963, pursuant to an order of this Court the issues were separated by the Court as follows:
(1) Is Shawnee Industries the legal successor of Jonco and, as such, bound by contractual obligations of Jonco not specifically assumed and particularly the collective bargaining agreement between Jonco and the Union, and
(2) If Shawnee Industries is determined to be the legal successor of Jonco and bound by the terms of said collective bargaining agreement, then
(a) whether the arbitration clause of the collective bargaining agreement provides the exclusive remedy to the plaintiff, and,
(b) if not, the proper relief to which the plaintiff is entitled.
A detailed Agreed Stipulation of Facts consisting of 11 typewritten pages and 35 pages of exhibits was entered into between the parties and filed with the Court herein. This matter has been submitted to the Court at this time as to issue No. 1 above upon the stipulation of facts, the pre-trial stipulation and order filed herein, and the briefs submitted by the parties. The stipulation of fact entered into is quite comprehensive in nature and thus the Court deems it unnecessary to reiterate herein with particularity these facts as set out therein.
Basically and broadly set out, the plaintiff asserts that the defendants herein have breached a collective bargaining agreement entered into between the plaintiff and Jonco in which the plaintiff was the properly certified bargaining unit for the maintenance and production employees of the Jonco plant in Shawnee, Oklahoma. It is not clearly set out by the plaintiff how it deems the liability of Jonco to now attach under this collective bargaining agreement in view of the fact that Jonco is no longer in existence as a going concern nor as an employer of the employees involved and no violations of the said agreement by Jonco are asserted or shown during its business operations. But plaintiff asserts with some degree of particularity the breaches alleged to have been committed by Shawnee Industries. Plaintiff asserts that Shawnee Industries is bound by the terms of the collective bargaining agreement as entered into between it and Jonco by reason of Article 35 therein making the agreement binding on the "successors and assigns" of Jonco.
The defendant Jonco does not deny the execution of the contract in question, but states that the contract expired by its *350 own terms on September 20, 1962, and that Jonco no longer operates as an employer of the employees in question and has ceased doing business. Jonco denies that it is liable for any breach of the contract by reason of ceasing to do business. Shawnee Industries alleges that it has no identity with Jonco as a successor or assignee, and, further, that it purchased only certain tangible assets of Jonco and assumed only certain specified obligations of Jonco. Shawnee Industries further alleges that it assumed no obligations or liabilities of Jonco either expressly or impliedly with relation to this collective bargaining agreement between plaintiff and Jonco. Thus, Shawnee Industries states that not being a party to the bargaining agreement and not assuming any obligation under same it is not bound by or subject to its provisions.
The plaintiff in its brief asserts two propositions in support of its argument as to issue No. 1; first, that the appropriateness of the certified bargaining unit survives the transfer from Jonco to Shawnee Industries, and second, equitable estoppel.
As the matter stands before this Court the Union brings this suit against the defendants seeking a declaration of their liability under the collective bargaining agreement and for a breach of said collective bargaining agreement pursuant to the authority of Section 301 (a) of the National Labor Relations Act, 29 U.S.C.A. § 185. We are not concerned here with labor disputes or unfair labor practices. This Court is without jurisdiction to entertain any complaint in so far as it seeks to recover against the defendants for unfair labor practices, such as refusing to bargain collectively with the plaintiff. Reed v. Fawick Airflex Co., D.C., 86 F.Supp. 822. The matter before the Court is singularly a breach of contract question. A breach of a collective bargaining agreement is not an unfair labor practice under the Labor Management Relations Act. The appropriateness of the bargaining unit as it might relate to a subsequent employer (that is, a successor or assignee) and the refusal of such employer to bargain collectively with the properly certified bargaining unit are matters properly to be submitted in the first instance to the National Labor Relations Board and then to the Court of Appeals if an appeal is deemed appropriate by the aggrieved party. Such questions as the appropriateness of the bargaining unit, its survival of a change of employer-owners, and a refusal to bargain toward a collective bargaining agreement are not before this Court. See N. L. R. B. v. McFarland, et al., 10 Cir., 306 F.2d 219; N. L. R. B. v. Alamo White Truck Service, 5 Cir., 273 F.2d 238; N. L. R. B. v. Armato, 7 Cir., 199 F.2d 800. The question presented here is not whether the defendant Shawnee Industries should bargain or should recognize plaintiff as the appropriate unit, but whether the defendant Shawnee Industries is now bound by the terms of a previously bargained contract made by the appropriate bargaining unit with another party.
In other words, we cannot here be concerned with whether or not the Union was the appropriate bargaining unit for the employees of Jonco or is such for the employees of Shawnee Industries. We can only be concerned here with whether Shawnee Industries is bound by the Jonco contract with the Union by reason of Shawnee Industries being a successor or assignee of Jonco as those terms are used in said contract. If Shawnee Industries is a successor or assignee of Jonco it would be bound by the contract and liable for a breach thereof. If Shawnee Industries is not a successor or assignee of Jonco it is not bound by the contract and could not be held to breach the same.
The cases cited by the plaintiff in support of the first proposition deal with the term "successor" in relation to an unfair labor practice proceeding and turn upon a successor's refusal to bargain with a properly certified union as the bargaining representative of the employees of its predecessor. The cases cited are not in point as to the question now before the Court. Even aided by the interpretation *351 put upon the "successor doctrine" as set out in those cases the plaintiff's position herein is not aided as will be pointed out hereinafter, for, under the criteria set out in the cases cited by the plaintiff, the facts herein do not support the assertion that Shawnee Industries was the successor or assignee of Jonco as the term is used in the collective bargaining agreement.
As to plaintiff's second proposition it asserts that Shawnee Industries is subject to the equitable doctrine of estoppel by its silence toward the Union during its purchase negotiations with Jonco. The doctrine arises where a person, or other legal entity acting through its agent, who by force of the circumstances existing is under a duty to another to speak, refrains from doing so and thereby leads the other to believe in the existence of a state of facts in reliance on which the latter acts to his prejudice. 31 C.J.S. Estoppel § 87. The stipulated facts show that Shawnee Industries has never recognized the Union contract executed by Jonco, and has at all times denied that it is bound or obligated by the same. (See page 11, Agreed Stipulation). Notwithstanding such stipulation a consideration of all the facts herein does not indicate that the defendants or either of them conducted themselves in such a manner as to be subjected to the application of the equitable principle of estoppel.
There is no evidence before the Court that the transfer herein between Jonco and Shawnee Industries was an attempt to evade the collective bargaining contract. All the evidence before the Court indicates that the sale was a bona fide one and that Shawnee Industries assumed no position in relation to Jonco other than that of a purchaser of certain assets of Jonco and assuming certain of its fixed obligations, not including, however, the contract in question herein. The liability of Shawnee Industries as a successor or assignee under the bargaining contract, as the terms are used therein, would depend upon the actual relationship of Jonco and Shawnee Industries. As indicated by the evidence the necessary relationship between the parties so as to establish liability on the part of Shawnee Industries under this contract is not present in this case. There is indicated by the facts that:
(1) There was only a transfer of certain assets, the parties to the transaction assuming the positions of buyer and seller.
(2) There was only an assumption of certain specified fixed obligations of Jonco.
(3) There was no transfer of intangibles such as good will or trade name.
(4) There was no transfer of accounts receivable.
(5) Jonco retained no control over or business interest in Shawnee Industries.
(6) There was no continuity of business operations by the two concerns.
(7) The products of the two concerns are not the same though similar machine shop techniques may have been employed by each firm.
(8) The personnel represented by the Union were not employed by Jonco at the time of the sale of certain assets and the assumption of certain obligations between Jonco and Shawnee Industries since Jonco had ceased doing business.
(9) There was no continuity of key personnel though Shawnee Industries employed some of the same key personnel after their termination with Jonco which termination preceded the sale in question.
(10) At the time of the sale, Jonco was a wholly owned subsidiary of Fairchild Engine and Aircraft Corporation whereas Shawnee Industries was an Oklahoma corporation with its stock owned locally.
(11) Jonco ceased its business operations at the location in question not for the purpose of selling out to Shawnee Industries but because its operations there were deemed not economically desirable.
Shawnee Industries is thus clearly not the successor to Jonco as that *352 term is generally applicable to corporations wherein one corporation by a process of amalgamation, consolidation or duly authorized legal succession becomes vested in the rights and assumes the burdens of its predecessor corporation. In re New York S. & W. R. Co., 3 Cir., 109 F.2d 988; New York Trust Co. v. New York S. & W. R. Co., 310 U.S. 633, 60 S. Ct. 1075, 84 L.Ed. 1402; International Assn. of Machinists, Lodge No. 6 v. Falstaff Brewing Corp., Tex.Civ.App., 328 S.W.2d 778. The purchase of certain of the assets of Jonco and the assumption of some of their outstanding obligations in and of themselves do not make Shawnee Industries a legal successor of Jonco and as such bound by the collective bargaining agreement. See Sec. 7122, Vol. 15, Fletchers Cyclopedia of the Law of Private Corporations. Generally stated, the rule is that when one company sells and otherwise transfers its assets to another company the latter company is not liable for the debts and liabilities of the seller-transferor. Exceptions to this rule are (1) where there is an agreement to assume such debt, (2) where the circumstances surrounding the transaction warrant a finding that there was a consolidation of the two corporations; (3) where the purchasing corporation was a mere continuation of the selling corporation; and, (4) where the transaction was fraudulent in fact. Coline Oil Corp. v. State, 184 Okl. 545, 88 P.2d 897; Burkholder v. Okmulgee Coal Co., 82 Okl. 80, 196 P. 679; First State Bank of Mangum v. Lock, 113 Okl. 30, 237 P. 606; Union Coal Co. v. Wooley, 54 Okl. 391, 154 P. 62, 19 A.L.R. 312. The facts in this case indicate that none of the above stated exceptions to the general rule are applicable here.
Neither was Shawnee Industries an assignee of Jonco. The evidence as indicated above does not show a general assignment of its business interests to Shawnee Industries by Jonco. There is no evidence of an assignment of the contract in question by Jonco to Shawnee Industries. The term "assigns" as it is used in the contract in conjunction with the term "successors" undoubtedly related to any person or concern that took a specific assignment of the contract from Jonco or that took a general assignment from Jonco of the whole of its business estate, functions, rights and liabilities and continued its activities. Such was not the case here in the transfer of only certain assets to and the assumption of only certain obligations by Shawnee Industries and for the other reasons set out numerically above.
Jonco had the right to quit business without prejudice to the collective bargaining agreement. There is no evidence that Jonco ceased doing business for the purpose of evading the agreement and thereby establish liability to plaintiff by curtailing its manufacturing functions. United Steel Workers of America Local Union No. 4264 v. Newpark Mining Co., 10 Cir., 273 F.2d 352; Local Lodge No. 2040, International Assn. of Machinists v. Servel Inc., 7 Cir., 268 F.2d 692; Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed. 2d 972.
Thus, it is the opinion of the Court that the defendants herein are not liable to the plaintiff for a breach of the collective bargaining agreement. This is so as to Jonco because no violations of same by Jonco are shown. This is so as to Shawnee Industries because it is not a party to said collective bargaining agreement and is not a successor or assignee of Jonco under the terms of same and therefore is not bound by its provisions. Accordingly, judgment should be rendered in favor of the defendants and the complaint should be dismissed. Counsel for the defendants will prepare a judgment pursuant to Rule 58 and submit it to the Court for filing in the case within ten days of the date of this memorandum opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/8304434/ | Mb. Justice Chattin
delivered the opinion of the Court.
This action was originally brought in the Circuit Court of Anderson County by Rudy C. Beavin against Paul Polishuk for personal injuries sustained while riding as a guest in an automobile owned and operated by Poli-shuk. Both parties were employees of the Federal Government.
Defendant removed the suit to the United States District Court for the Eastern District of Tennessee, Northern Division, insisting plaintiff’s exclusive remedy was against the United States under the Federal Tort Claims Act, 28 U.S.C.A., Section 2679(b), defendant being a Federal employee and operating his automobile in the scope of his employment at the time of the accident and resulting injuries to plaintiff.
Thereafter, the United States District Attorney General intervened and certified defendant was a government employee on government business at the time of the accident and moved the Court the United States be substituted in the place and stead of defendant. This motion was granted.
*290Subsequently, the United States District Attorney General filed a motion for summary judgment on the ground the pleadings and exhibits thereto presented no genuine issue as to any material fact and the United States was entitled to a judgment as a matter of law.
Plaintiff then filed a motion to remand the suit to the Circuit Court of Anderson County.
The Honorable Robert L. Taylor, United States District Judge, in granting the motion, said:
“* * * Since plaintiff was injured while on active duty as a member of the armed services in the course of an activity incident to such service, he does not have a cause of action under the Federal Tort Claims Act. Feres vs. United States, 340 U.S. 135, 71 S.Ct. 153, 95 L.Ed. 152 (1950).
“It is, therefore, ordered that the motion of plaintiff to remand the cause to the State Court pursuant to 28 U.S.C. 2679(d) be, and the same is granted.”
Upon the remand, the matter was heard by Honorable Roland Prince, Law and Equity Judge for Anderson County, without the intervention of a jury. Judge Prince entered a judgment for plaintiff in the sum of $42,500.00 against defendant.
Defendant’s motion for a new trial was overruled and he perfected an appeal to the Court of Appeals. That Court affirmed the judgment. Defendant petitioned this Court for the writ of certiorari, which was granted. The matter has been ably argued at the Bar of this Court and excellent briefs filed on behalf of the parties and amici curiae. We have concluded we must reverse both lower courts and dismiss the suit.
*291It was the insistence of defendant in the trial court and in the Court of Appeals that he was operating his automobile in the scope of his employment with the United States of America on the occasion of the accident; and, therefore, plaintiff’s exclusive remedy was against the United States under the provisions of 28 U.S.C.A., Sections 1346(b), 2671 et seq., the Federal Tort Claims Act.
The same contention is made in this Court and insisted we should reverse the lower courts and dismiss the suit.
To meet this insistence in the lower courts, plaintiff insisted, as he does here, at the time of the accident resulting in injuries to him, defendant was not operating his automobile within the scope of his employment; and, therefore, defendant was personally liable to him. Specifically, plaintiff insists defendant on the previous night had detoured or deviated from his master’s route and had not reached the point of deviation at the time of the accident.
In order to fully understand the contentions of the respective parties, it is necessary we set forth the facts prior to the filing of the suit.
On the occasion of the accident, plaintiff was a Lieutenant in the United States Air Force and defendant a civilian employee of the Air Force. Both were engaged as physicists at Wright-Patterson Air Force Base near Dayton, Ohio.
On May 26,1965, plaintiff and defendant were ordered to report to Oak Ridge Technical Enterprises at Oak Ridge, Tennessee, the following day for temporary duty. Defendant was to receive mileage allowance for the use of his automobile in traveling to Oak Ridge. The *292mileage was to be calculated on the shortest route from Dayton to Oak Eidge shown by certain maps.
The orders clearly contemplated an overnight trip. Each were allowed $16.00 per diem to cover lodging and meals with no instructions as to where they should obtain lodging and meals en route to Oak Eidge; nor did the orders require them to travel a designated route.
They left Dayton on May 26, 1965. They arrived in Clinton, Tennessee, about eight P.M. Instead of proceeding to Oak Eidge, they decided to turn left at Clinton and travel toward Knoxville and obtain lodging for the night.
It is undisputed the reason they decided not to proceed to Oak Eidge that night was on a previous visit to Oak Eidge, the Holiday Inn there had no vacancies, the accommodations at another motel in which they did stay on the occasion were unsatisfactory and they knew of no other facilities in that city.
They traveled about eight or nine miles beyond Clinton on Highway 25-W toward Knoxville and obtained lodging for the night at the Knox Motel. Thereafter, they decided to drive into Knoxville for dinner.
When they awakened the next morning it was raining. They decided to drive to Oak Eidge and have breakfast there. The record shows the distance to be approximately fifteen miles.
The accident occurred at approximately seven thirty A.M., at a point about four or five miles from the Knox Motel on Highway 25 toward Clinton. Defendant’s car skidded into the path of an automobile traveling in the opposite direction.
*29328 U.S.C.A., Section 1346(b) of the Federal Tort Claims Act provides:
“Subject to the provisions of Chapter 171 of this Title, the district courts * * shall have exclusive jurisdiction of civil actions on claims against the United States, for money damages, accruing on and after January 1,1945, for injury or loss of property, or personal injury or death caused by the negligent or wrongful act or omission of any employee of the Government while acting within the scope of his office or employment, under circumstances where the United States, if a private person, would be liable to the claimant in accordance withrthe law of the place where the act or omission occurred.”
We quote the pertinent subsections of the Federal Drivers Act, 28 U.S.C.A. sec. 2679(b)-(d), inclusive:
“The remedy by suit against the United States as provided by Section 1346(b) of this Title for damage to property or for personal injury, including death, resulting from the operation by any employee of the Government of any motor vehicle while acting within the scope of his office or employment, shall hereafter be exclusive of any other civil action or proceeding by reason of the same subject matter against the employee or his estate whose act or omission gave rise to the claim.”
Subsection (c) :
“The Attorney General shall defend any civil action or proceeding brought in any court against any employee of the Government or his estate for any such damage or injury. The employee against whom such civil action or proceeding is brought shall deliver with*294in such time after date of service or knowledge of service as determined by the Attorney General, or process served upon him or an attested true copy thereof to his immediate superior or to whomever was designated by the head of his department to receive such papers and such person shall promptly furnish copies of the pleadings and process therein to the United States attorney for the district embracing the place wherein the proceeding is brought, to the Attorney General, and to the head of his employing Federal Agency. ’ ’
Subsection (d):
“Upon a certification by the Attorney General that the defendant employee was acting within the scope of his employment at the time of the incident out of which the suit arose, any such civil action or proceeding commenced in a State court shall be removed without bond at any time before trial by the Attorney General to the district court of the United States for the district and division embracing the place wherein it is pending and the proceedings deemed a tort action brought against the United States under the provisions of this title and all references thereto. Should a United States District Court determine on a hearing on a motion to remand held before a trial on the merits that the case so removed is one in which a remedy by suit within the meaning of subsection (b) of this section is not available against the United States, the case shall be remanded to the State court. ”
The parties agree the order of remand of Judge Taylor was not reviewable on appeal or otherwise by virtue of 28 U.S.C.A., Section 1447(d).
*295Tke record shows Judge Taylor found from the evidence before him defendant was, at the time of the accident, operating the automobile in the course of his employment. See Jones v. Polishuk and the United States, D.C., 252 F.Supp. 752 (1967).
Neither the trial court nor the Court of Appeals made any finding on the issue of whether Polishuk, at the time of the accident, was operating his automobile in the course of his governmental employment.
After hearing the evidence, the trial judge stated from the bench the evidence showed defendant was neglignt and the injuries suffered by plaintiff were the result of his negligence.
The Court of Appeals, as we understand its opinion, held the order of remand by Judge Taylor was conclusive on the issue of whether plaintiff could maintain his action against Polishuk in the state court.
We think such was error. The order of remand was conclusive only as to the right of plaintiff to recover under the Federal Tort Claims Act. But it was not conclusive on the issue of whether defendant was immune from personal suit by plaintiff by virtue of the provisions of the Federal Drivers Act quoted above. In the case of Vantrease v. United States, United States Court of Appeals for the Sixth Circuit, 400 F.2d 853, decided September 4, 1968, the Court said:
“Plaintiff was injured while within the scope of his employment as a mail carrier for the United States Post Office when struck by a car driven by another Post Office employee, Cameron, who was also within the scope of his employment. Plaintiff received benefits under the Federal Employees’ Compensation Act (5 *296U.S.C. sec. 751 et seq.) (now recodified, 5 U.S.C. (Supp. II) sec. 8101 et seq.) and then brought a common law negligence action against Cameron in the state courts of Michigan. Upon certification by the United States Attorney that Cameron was acting within the scope of his employment at the time of the incident, the cause was removed to the United States District Court for the Western District of Michigan under the Federal Drivers Act (28 U.S.C. Section 2679(d)), and the United States was substituted as the party defendant. From the District Court’s order dismissing the action on the government’s motion for summary judgment, and denying plaintiff’s motion to remand the cause to the state courts for his negligence claim against Cameron, plaintiff appeals.
“The Federal Drivers Act (28 U.S.C. sec. 2679(b)) was enacted in 1961 to protect or immunize government drivers from personal liability on claims arising from vehicular accidents occurring during the course of their employment, and to accordingly relieve such employees of the burden of acquiring private automobile liability insurance for driving while on the job. See S. R. Rep. No. 297, 87th Cong., 1st Sess.; S.Rep. No. 736, 87th Cong., 1st Sess.; 107 Cong.Rec. 18,499-500, 87th Cong., 1st Sess., U.S.Code Cong. & Admin.News 1961, p. 2784. See Generally Annot. 16 A.L.R.3d 1394, 1402 (1967). The purpose of the Act is accomplished by making ‘ [t]he remedy by suit against the United States as provided by section 1346(b) (Federal Tort Claims Act) of this title for damage * * or * * * personal injury, including death, resulting from the operation by any employee of the Government of any motor vehicle while acting within the scope of his office or employ*297ment * #, exclusive of any other civil action or proceeding by reason of the same subject matter against the employee * *.' 28 U.S.C. sec. 2679(b). This section is implemented by subsection (d) which makes provision for removal to an appropriate district court of state court suits against a federal driver upon certification by a United States Attorney that the driver was within the scope of his employment at the time of the incident out of which the suit arose, the cause thereafter being ‘deemed a tort action brought against the United States’ under the Federal Tort Claims Act. However, when a claimant such as plaintiff here is a federal employee who is entitled to benefits under the Federal Employees’ Compensation Act, he cannot recover against the United States under the Tort Claims Act since the compensation act provides that ‘the liability of the United States or any of its instru-mentalities under sections 751-756, 757-781, 783-791 and 793 of this title or any extension thereof with respect to the injury or death of an employee shall be exclusive, and in place, of all other liability of the United States or such instrumentality to the employee * * *. ’ 5 U.S.C. sec. 757(b) (now recodified, 5 U.S.C. (Supp. II) sec. 8116(c)). The District Court in the instant case sustained the government’s position that the above statutory provisions not only precluded plaintiff’s claim for damages against the United States, but also precluded his common law action against the alleged tortfeasor individually. This determination is in accord with Noga v. United States, 272 F.Supp. 51 (N.D.Calif.1967); Beechwood v. United States, 264 F.Supp. 926 (D.C.Mont.1967); and Van Houten v. Ralls, 290 F.Supp. 67 (D.C.Nev., No. 1911-N, 1967).
*298“Plaintiff’s principal contention is that the denial of his common law action against the alleged tortfeasor thwarts the legislative intent behind the Federal Employees’ Compensation Act. In this respect, plaintiff cites four cases in support of the proposition that a federal employee who has sustained injuries as a result of an automobile accident may receive compensation benefits under the federal act and still bring suit against the federal employee who allegedly caused the injury. One case, with which we disagree, does support this assertion, Gilliam v. United States, 264 F.Supp. 7 (E.D.Ky.1967); two cases are factually distinguishable from the present situation. Allman v. Henley, 302 F.2d 559 (5th Cir. 1962) and Seligman v. Gerlach, 28 Misc.2d 632, 215 N.Y.S.2d 634 (1961); and the court in the fourth did not mention the Drivers Act, presumably because suit was commenced prior to its effective date, Marion v. United States, 214 F.Supp. 320 (D.C.Md.1963) (See Section 2 of the Drivers Act, 75 Stat. 539.).
“The purported congressional intent to permit state actions against an alleged tortfeasor where plaintiff has received compensation benefits from the federal government is allegedly evidenced by the fact that Congress has never prohibited such suits. In contrast to the conjectured legislative intent which might be presumed from congressional silence, is the declared policy reflected by the Drivers Act and its legislative history to insulate federal drivers from personal liability for accidents occurring while they are within the course of employment. To ignore the clear and unambiguous language of this Act, as plaintiff would have us do, would create the unwarranted exception that government drivers are not exonerated from personal *299liability if the injured party is another federal employee. See Van Houten v. Ralls, supra.”
It is quite clear the Drivers Act was enacted to immunize or insulate government drivers from personal liability on claims arising from automobile accidents occurring while in the course of their employment, and also to relieve them of the burden of obtaining private automobile liability insurance for personal protection while driving in the course of their employment.
Judge Taylor remanded the case on authority of Feres v. United States, supra, in which case the Court said:
“This court, in deciding claims for wrongs incident to service under the Tort Claims Act, cannot escape attributing some bearing upon it to enactments by Congress which provide systems of simple, certain, and uniform compensation for injuries or death of those in armed services. We might say that the claimant may (a) enjoy both types of recovery, or (b) elect which to pursue, thereby waiving the other, or (c) pursue both, crediting the larger liability with the proceeds with the smaller, or (d) that the compensation and pension remedy excludes the tort remedy. There is as much statutory authority for one as for another of these conclusions. If Congress had contemplated that this Tort Act would be held to apply in cases of this kind, it is difficult to see why it should have omit- " ted any provision to adjust these two types of remedies to each other. The absence of any such adjustment is persuasive that there was no awareness that the Act might be interpreted to permit recovery for injuries incident to military service.”
Accordingly, an officer of the armed services receiving injuries due to the negligent operation of an auto*300mobile of a Federal employee acting in the course of his employment has recourse under one of the various Acts providing compensation benefits for personal injuries to such serviceman. But he has no recourse against the United States under the Federal Tort Claims Act nor the tortfeasor acting in the course of his employment.
This record shows Beavin was hospitalized at Oak Ridge after the accident. Later .he was transferred to the Lackland Air Force Base Hospital where he remained until the first of August, 1965. He was then transferred to the Wright-Patterson Air Force Base Hospital. All his hospital and medical expenses while a patient in the government hospitals were assumed by the government.
At the time of the accident his base pay was approximately $500.00 monthly, which he continued to receive during his hospitalization. He returned to his duties September 1, 1965. He did the same type of work as he had been doing prior to the accident. He received a promotion to Captain.
In July, 1966, he received a fifty per cent temporary disability retirement from the Air Force of $300.00 monthly. He then was employed as a civilian employee under civil service and received an annual salary of $9,800.00. At the time of the trial his salary had been raised to $12,800.00 annually. His civilian duties were the same he was performing prior to the accident.
The record shows his disability is revaluated in eighteen months intervals for five years, and if found permanent at that time he will be retired from the Air Force on a permanent disability retirement basis.
However, it remains to be seen whether defendant, in the instant case, was acting within the scope of his *301employment at the time of the accident and injuries to plaintiff.
As stated, neither the trial court nor the Court of Appeals considered this issue. However, the proof as to this matter is undisputed and the issue is one of law.
We are of the opinion, under the undisputed facts, defendant was operating his automobile on the occasion of the accident in the course of his employment.
In the case of Cunningham v. Union Chevrolet Company, 177 Tenn. 214, 147 S.W.2d 746, 148 S.W.2d 633 (1941), the Court quoted with approval the following:
“We have concluded that it is essential, by some process or other, to determine whether, at the outset, the trip in question was that of the employer, or that of the employee. Having* determined that it was the employer’s trip, the employee is engaged in his employer’s business and acting within the scope of his employment while going to and returning from the terminus of the trip. If it is the employee’s trip, he is not within the scope of his employment while en route to, or returning from, the terminus of his trip. In case it is the employer’s trip, and there are any detours for purely personal objectives, such detours must be separated from the main trip and the employee held to be outside the scope of his employment during such detour. If it is his own trip, then such detours as are made for the purpose of dispatching business for his employer must be held to be within the scope of his employment.”
There can be no doubt the trip was that of the employer. Both parties had been ordered to report to Oak Ridge for temporary duty. An overnight trip was contemplated *302by the employer. Plaintiff was not instructed to stay at any particular lodging place on the route. Nor was he directed to travel any designated route. Both plaintiff and defendant agreed to make the slight detour at Clinton from the direct route to Oak Bidgc not to transact any business personal to them but to obtain suitable accommodations for the night as contemplated by their orders.
In other words, the parties obtained lodging at the Knox Motel for their personal comfort and for the purpose of proceeding to their temporary duties the next morning.
“The courts are agreed that the employee remains in the scope of his employment when he combines his own purposes with those of his employer.” 8 Am.Jur. 2d, Automobiles and Highway Traffic, Section 618, page 170.
“The mere fact that the employee was, at the time of the accident, proceeding toward his business designation by a route somewhat longer than absolutely necessary has been held not to require the conclusion that he had abandoned his employment, at least in the absence of a showing that he had received specific instructions as to the route to be followed.” 8 Am.Jur. 2d, supra, Section 625, page 175.
The deviation at Clinton was not unauthorized and was reasonable. It was merely a slight or incidental departure from a direct route from Dayton to Oak Ridge.
“Employer’s liability does not terminate until there has been a marked departure or deviation from the employee’s line of duty. In case where the departure or deviation was slight and not unusual the court may, and often will, as a1 matter of law, determine that the *303driver was still executing his employer’s business, * * *.” 8 Am.Jur.2d, supra, Section 618, page 170.
We think under the undisputed facts, plaintiff was in the course of his employment on the occasion of the accident.
The judgments of the courts below are reversed and the suit dismissed at the cost of plaintiff.
Burnett, Chief Justice, and DyeR, Creson and Humphreys, Justices, concur. | 01-03-2023 | 10-17-2022 |
https://www.courtlistener.com/api/rest/v3/opinions/1644948/ | 994 So. 2d 29 (2008)
STATE ex rel. Louie M. SCHEXNAYDER
v.
STATE of Louisiana.
No. 2008-KH-1804.
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/1558379/ | 22 So.3d 1018 (2009)
Party PARADISE
v.
AL COPELAND INVESTMENTS, INC.
No. 2009 CA 0315.
Court of Appeal of Louisiana, First Circuit.
September 14, 2009.
*1019 Philip Bohrer, Keith D. Jones, Baton Rouge, Louisiana, for Plaintiff-Appellee, Debra Maddox d/b/a Party Paradise.
Charles A. Schutte, Jr., Baton Rouge, Louisiana, for Defendant-Appellant, Al Copeland Investments, Inc.
Before PARRO, KUHN, and McDONALD, J.
KUHN, J.
Defendant-appellant, Al Copeland Investments, Inc. (ACI), appeals the trial court's judgment certifying a class in this suit filed by plaintiff-appellee, Debra Maddox doing business as Party Paradise (Party Paradise), based on allegations of violations of the Telephone Consumer Protection Act. Finding plaintiff failed to objectively define the class, we reverse.
*1020 FACTUAL AND PROCEDURAL BACKGROUND
On September 24, 2004, Party Paradise filed a petition against ACI on its own behalf and for certification as the representative of a class consisting of all recipients of unsolicited telefacsimile (fax) messages and/or advertisements within the states of Louisiana and Mississippi, which were transmitted and/or initiated by or on behalf of ACI between the dates of September 24, 2000, through the present, in violation of the Telephone Consumer Protection Act (TCPA), 47 U.S.C.A. § 227 et seq. Expressly excepted from the alleged class were "any recipients from whom [ACI] has received the prior express invitation or permission to receive [fax] advertisements."
Party Paradise moved to have the class certified and also filed a motion for sanctions for willful spoliation of evidence, seeking to have an adverse evidentiary presumption imposed. ACI filed various exceptions. After a hearing on September 10, 2007, the trial court issued "FINDINGS OF FACT AND CONCLUSIONS OF LAW," in which it designated "Display South" as the class representative and stated that the class consisted of:
[a]ll recipients of unsolicited [fax] messages and/or advertisements within the states of Louisiana and Mississippi which were transmitted and/or initiated by or on behalf of [ACI] between the dates of September 1, 2002 and April 1, 2004, excluding any recipients from whom [ACI] received prior express invitation or permission to receive [fax] advertisements.
A hearing on ACI's exceptions was subsequently held on January 14, 2008. The trial court issued an order on May 30, 2008, sustaining in part and overruling in part ACI's objections of improper cumulation of claims and improper joinder. The trial court's order stated:
With regard to plaintiff's claim to certify an action which joins claims for receipt of faxes sent in 2002 and 2004, the exceptions are granted. With regard to plaintiffs claim to certify an action which joins claims for receipt of faxes sent to both Louisiana and Mississippi residents, the exceptions are denied. Plaintiff is entitled to seek certification of a class comprised only of recipients of faxes in 2004 that are residents of Louisiana and Mississippi[.]
On that same day, the trial court issued "AMENDED FINDINGS OF FACT AND CONCLUSIONS OF LAW,"[1] which narrowed the class in conformity with the May 30, 2008 order and designated Debra Maddox on behalf of Party Paradise as the class representative. A judgment was signed on June 3, 2008, which designated the class as:
[a]ll recipients of unsolicited [fax] messages and/or advertisements within the states of Louisiana and Mississippi which were transmitted by and/or initiated *1021 by or on behalf of [ACI] between the dates of January 1, 2004 and April 1, 2004, for claims under the TCPA.
ACI timely appealed.
APPLICABLE LAW
The TCPA makes it a violation of federal law to use any telephone facsimile machine, computer, or other device to send an "unsolicited advertisement" to a telephone facsimile machine. See 47 U.S.C.A. § 227(b)(1)(C). An "unsolicited advertisement" is defined as "any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission, in writing or otherwise." 47 U.S.C.A. § 227(a)(5). Private citizens whose rights under the TCPA have been violated may sue to enjoin future transmissions, recover the greater of actual monetary damages or $500 in damages for each such fax, or obtain injunctive relief plus damages. See 47 U.S.C.A. § 227(b)(3). For willful or knowing violations of the TCPA, the court has discretion to increase the amount of the award to not more than three times the amount of damages specified above. See 47 U.S.C.A. § 227(b)(3); Display South, Inc. v. Graphics House Sports Promotions, Inc., XXXX-XXXX (La. App. 1st Cir.6/6/08), 992 So.2d 510, 515, writ not considered, XXXX-XXXX (La.10/10/08), 993 So.2d 1274.
The class action is a nontraditional litigation procedure permitting a representative with typical claims to sue, on behalf of a class of similarly situated persons, when the question is of common or general interest to persons so numerous as to make it impractical to bring them all before the court. The purpose of the procedure is to adjudicate and obtain res judicata effect on all common issues applicable not only to the representatives who bring the action, but to all others who are similarly situated, provided they are given adequate notice of the pending class action and do not timely exercise the option of exclusion from the class. Id.; Ford v. Murphy Oil U.S.A., Inc., 96-2913 (La.9/9/97), 703 So.2d 542, 544.
Class actions in Louisiana are governed by La. C.C.P. arts. 591-597. Article 591 states in relevant part:
A. One or more members of a class may sue or be sued as representative parties on behalf of all, only if:
(1) The class is so numerous that joinder of all members is impracticable.
(2) There are questions of law or fact common to the class.
(3) The claims or defenses of the representative parties are typical of the claims or defenses of the class.
(4) The representative parties will fairly and adequately protect the interests of the class.
(5) The class is or may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case.
B. An action may be maintained as a class action only if all of the prerequisites of Paragraph A of this Article are satisfied....
The only issue to be considered by the trial court in ruling on certification, and by this court on review, is whether the case at bar is one in which the procedural device of a class action is appropriate. In determining the propriety of a class action, the court is not concerned with whether the plaintiff has stated a cause of action or the likelihood that it ultimately will prevail on the merits. A trial court's decision to certify a class is a two-step process. Therefore, appellate review of such decisions *1022 also follows a two-step analysis. The trial court must first determine whether a factual basis exists for certifying the matter as a class action. These factual findings are reviewed on appeal pursuant to the manifest error standard of review. If the trial court finds that a factual basis exists for certifying the action, it then exercises its discretion in deciding whether to certify the class. This aspect of the judgment is reviewed pursuant to the abuse of discretion standard. Unless a trial court committed manifest error in its factual findings or abused its discretion in deciding that class certification is appropriate, we must affirm the trial court's determination. Display South, Inc., 992 So.2d at 516.
DISCUSSION
On appeal, ACI challenges the trial court's conclusion that plaintiff satisfied the prerequisites set forth in La. C.C.P. art. 591 A(5). On this element of class certification, the trial court's May 30, 2008 factual findings state:
This class may be defined objectively in terms of ascertainable criteria, such that the court may determine the constituency of the class for purposes of the conclusiveness of any judgment that may be rendered in the case. Specifically, any recipients of any faxed advertisements transmitted by or on behalf of [ACI] between the dates of January 1, 2004 and April 1, 2004 is an objectively definable class of persons which satisfies the requirement of La. C.C.P. art. 591(A)(5).
Further, the identity of the class members is readily ascertainable through the [re-creation] of the lists of intended recipients. While [ACI] argues that this [re-creation] process does not adequately identify the putative class members, the Court is convinced, based on the evidence presented at the hearing, that [Party Paradise has] identified an accurate methodology by which the proposed class can be objectively defined. The [re-created] data lists, which identify each class member by name, address, phone number and fax number, adequately identify the putative class members, and the methodology utilized to generate these lists is an acceptable method for doing so.
ACI maintains that the trial court was manifestly erroneous in concluding that the methodology used by Party Paradise to identify the recipients of the faxes sent in 2004 was a method that objectively identified the putative class.
Determination Based on Evidence Admitted at the Hearing
The evidence admitted at the hearing to certify the class included the deposition testimony of Charlotte Womac,[2] a corporate representative for ACI, who worked in the marketing department in 2004 as a field local marketing coordinator. She testified that the idea of utilizing faxes as a way to advertise was hers. After presenting the idea to her supervisor, Linda Carver Poiner, Womac was authorized to pursue the idea. Womac was ACI's sole representative in the fax campaign. Through a website, cheapfaxes.com, Womac eventually contacted Protus IP Solutions, Inc. ("Protus"). Her primary contact at Protus was Peter Komoto. With Protus, she discussed a campaign of faxing advertisements in conjunction with a Mardi Gras Madness promotion ACI was undertaking, specifically targeting businesses within certain zip codes and different mile radii around ACI restaurants. Womac's goal was to have advertisements faxed to *1023 any business that had a fax machine located within specified parameters around the Essen Lane restaurant in Baton Rouge. She identified an email she received from Komoto, dated March 16, 2004, which indicated "counts" of "5 mi = 3997" and "10 mi = 6315" for "Essen Lane" and "5 mi = 1802" and "10 mi = 4281" for "Ridgewood Rd." Womac explained that Ridgewood Road was the location of an ACI restaurant in Mississippi and stated that she was uncertain whether a fax campaign had been undertaken for that restaurant. Womac admitted that she was most likely the person who had drawn circles around the geographic indicators of "5 mi = 3997" for Essen Lane and "10 mi = 4281" for Ridgewood Road on the hard copy of the email but did not explain what the encircling represented. Based on the email, Womac believed that ACI had probably engaged in a five-mile fax campaign in connection with the Essen Lane location.
Womac thought that she had not directed Protus to specific businesses to which advertisements should be faxed, recalling it was an essentially blind advertisement campaign. She testified that ACI had hired Protus to send one-page faxes, which specified ACI goods and services that were available to the recipient, and identified a single-page advertisement that had been created by an outsource company for ACI. Womac explained that the success of transmissions was relayed to her by email, with Protus advising her of the number of intended recipients as well as the number of actual recipients. ACI was billed only for the number of actual recipients. The email correspondence between Womac and Komoto would have been on a computer Womac used when she worked in ACI's marketing department. Protus invoiced ACI for $143.00 on February 29, 2004; and $824.80 on March 31, 2004. Womac stated that she had no knowledge of the prohibitions contained in the TCPA at the time of the fax campaigns, and it was her impression that no one at ACI did either.
Introduced into evidence was the affidavit of Thomas Martin, the chief financial officer for and authorized representative of Protus. He stated that ACI engaged Protus to send faxes to numbers provided by a third party provider. In February and March of 2004, according to Martin, 9,768 faxes were successfully transmitted over Protus' network on behalf of ACI. ACI paid $143.00 for the fax transmissions and had an outstanding balance of $824.80 on the account.[3] Martin stated:
At the time of the transmissions ... it was Protus' established protocol and procedure not to be involved in the determination of recipient fax numbers to whom Protus' customers sent faxes. Rather, Protus' customers either provided the recipient fax numbers to Protus directly or acquired recipient fax numbers from third party list providers.
In his affidavit, Martin neither explained whether ACI had provided the recipient fax numbers directly to Protus nor identified a third party list provider who may have. The record contains no other testimonial evidence from Protus representatives.
In responses to interrogatories, ACI admitted that Womac had been advised by Komoto that faxes "totaling 3997 pages had been transmitted within a five-mile radius of the Restaurant" and faxes "totaling 6,315 pages had been transmitted within a ten-mile radius of the Restaurant." It also admitted that Protus had sent invoices *1024 to ACI for 8,249 fax transmissions, which ACI had not paid. ACI stated that it did not have any information regarding the persons who may have received faxes transmitted by Protus or how Protus obtained the fax numbers for which Protus invoiced ACI. Additional responses to interrogatories include admissions by ACI that it engaged Protus to send faxes in March 2004 and that the request may have included businesses located in Baton Rouge who might patronize the Essen Lane restaurant; and businesses located in Jackson, Mississippi who might patronize the Ridgewood Road restaurant.
The deposition testimony of Brent Wadman, corporate counsel for infoUSA, Inc. (infoUSA), who was designated as the company's representative, was also introduced into evidence at the class certification hearing. Wadman explained that infoUSA licenses its customers to use lists supplied from its database, which contain information gathered on businesses throughout the world. Generally and for purposes of this litigation, Wadman described how a customer provides selection criteria, and infoUSA supplies lists of businesses based on that criteria. He stated that the two other big suppliers of lists of the sort infoUSA creates are Dunn & Bradstreet and Axiom. According to Wadman, infoUSA lists were usually of a higher quality while the other two list providers usually had more businesses included in their lists.
Although Wadman was aware of a prior business relationship with Protus, his search of infoUSA's records revealed no information identifying fax numbers it may have supplied to Protus to use in any fax campaign for ACI. A historical search for invoices for transactions with ACI, or with the Protus customer identification number assigned to ACI, revealed none. Wadman had no personal knowledge of any relationship between infoUSA and Protus before 2005. According to Wadman, any records of a relationship between infoUSA and Protus before 2005 would have been destroyed in accordance with company procedure, although he found records indicating that Protus was invoiced for the first time in 2000.[4]
Wadman testified that it was possible that Protus had obtained the fax numbers it used in an early-2004 fax campaign on behalf of ACI from any source. He explained that other list provider companies may have provided different businesses (counts) in the respective lists in response to selection criteria based on geography, particularly when the customer further narrowed its selection criteria to fax numbers, noting that each company may have different methods of compiling their respective databases. Wadman testified that infoUSA does not guarantee either the accuracy or the legal compliance of any information it provides on a list.
Based on this evidence, Party Paradise cannot establish the actual identity of the putative class. Compare Display South, Inc., 992 So.2d at 520 (the record included a print out showing the fax numbers of the 461 recipients of defendant's faxes as well as testimony that the identity of the recipients could be ascertained and verified) and Display South, Inc. v. Express Computer Supply, Inc., 06-1137 (La.App. 1st Cir.5/4/07), 961 So.2d 451, 457 (the testimony established defendant possessed a database of customers and prospective customers that indicated faxes were sent to over 700 potential class members).
*1025 Nevertheless, Party Paradise contends that a class should be certified suggesting that it proved a reasonable methodology for ascertaining the putative class.[5] Thus, it asserts, the trial court's conclusion that an objectively defined class exists is supported by the evidence and, therefore, not manifestly erroneous.
Relying on the Protus invoices and the affidavit of Martin, Party Paradise claims it established that 9,768 faxes were successfully transmitted. Next, Party Paradise maintains that the circled numbers on the email from Komoto to Womac establish the scope of the putative class, i.e., 3,997 faxes within a five-mile radius of the Essen Lane restaurant and 4,281 faxes within a ten-mile radius of the Ridgewood Road restaurant. We note two problems with this assumption: first, the record contains no evidence supporting a finding that the circled numbers on the email corresponded to the number of faxes successfully transmitted; and second, the sum of 3,997 and 4,281 is 8,278, which does not correspond to the invoiced transmissions or Martin's affidavit stating that 9,768 had been successfully transmitted.
The next step in the methodology Party Paradise outlined was to utilize the geographic selection criteria (i.e., five-mile radius from the Essen Lane restaurant and ten-mile radius from the Ridgewood Road restaurant) and request of infoUSA a list of businesses and their fax numbers. Attached to Wadman's deposition were lists of businesses, and their fax numbers, within the five and ten-mile radii of the two restaurants. Although Wadman could not authenticate the printed hard copies of the lists, he believed they corresponded to the lists that infoUSA had electronically produced for Party Paradise in conjunction with this litigation. Admitted into evidence was a letter dated August 28, 2006, from Party Paradise to ACI written after Wadman's deposition stating:
The purpose of the [Wadman] deposition was to discuss the database search performed by [infoUSA] at our request. Specifically, prior to that deposition, we asked [infoUSA] to perform a search of its archive databases for all businesses with fax numbers within certain geographical radii from different ... addresses. It was represented to us, and subsequently to you at the deposition, that the lists provided by [infoUSA], and ultimately produced to you, represented the information as it existed in ... 2004 from their archive databases.
After we returned ... a senior account executive ... of [infoUSA] ... advised that the previous search performed by [infoUSA], and paid by us, did not accurately reflect what we sought to obtain. Specifically, she advised that the [infoUSA] representative we dealt with did not perform a search of the archive information. Instead, he retrieved current information. Accordingly, the lists produced by [infoUSA] to you represent the same search parameters as described above, but includes only current information.
... We have endeavored to obtain accurate relevant information from [infoUSA]. During our discussions with [the senior account executive], she advised *1026 that not only was the search conducted of current information, but in... 2004 [infoUSA] could not perform searches based on the search parameters we provided. Specifically, she said that they could not, at that time, perform searches based on geographical radii. In other words, they could not determine which businesses had fax numbers within a five or ten mile radius of each address.
However, [infoUSA] advised us that they could perform a search of all businesses with fax numbers with zip codes that touched within a certain geographical radii from each address. In other words, they can perform a search of all their archived databases to provide a list of all businesses with fax numbers with zip codes that are within a five or ten mile radius of each address. This search result will produce a list of businesses with fax numbers that is over inclusive, because the search will produce a list of all businesses with the same zip codes, as long as part of the zip code falls within the specified radius. We have requested that [infoUSA] perform this updated search....
Our next step is to perform a geocoding of all of the addresses provided in response to the [infoUSA] search to verify that they are within a certain radius of each address. At that point, we will have effectively generated a list of all businesses with fax numbers within a five or ten mile radius of each address, as that information existed in ... 2004.
At the class certification hearing, the trial court admitted lists of businesses ostensibly produced in accordance with the methodology outlined above.
In addition to the previously noted factual deficiencies, we find additional deficiencies in the proposed methodology for determining the putative class. Nothing in the record establishes that infoUSA was the third-party provider of fax numbers utilized by Protus in its early 2004 fax campaign undertaken on behalf of ACI. Wadman's deposition testimony clearly established that no records existed to support a finding that infoUSA supplied any lists of businesses to Protus in 2004, more particularly a list that was utilized by Protus on behalf of ACI. Wadman also testified that the lists generated by one list provider did not conform to the lists generated by another, especially when the collection of fax numbers was based on a selection criterion. Moreover, the letter itself and the reassessment of the basis of collection of the list data set forth in the letter demonstrate the unreliability of Party Paradise's methodology. We conclude the trial court's finding that the methodology utilized by Party Paradise was an acceptable method for identifying the potential putative class is manifestly erroneous. Not only did Party Paradise fail to prove the basis for a selection criteria to support a finding that 3,997 faxes had been sent by ACI in 2004 within a five-mile radius of the Essen Lane restaurant and 4,281 within a ten-mile radius of the Ridgewood Road restaurant, it also failed to establish that the database it proposed to use to identify the recipients was the same database Protus utilized to send the transmission. Thus, the record lacks a factual basis to apply the methodology proposed by Party Paradise.[6]
Adverse Presumption Based on Spoliation of Evidence
Party Paradise asserted before the trial court that it was entitled to an *1027 adverse presumption based on spoliation of evidence. At Womac's deposition, she testified that her correspondence with Protus usually occurred by email, generally between her and Komoto. She indicated that "possibly" there were internal emails that would have included Poirier. At Womac's deposition, which occurred on July 27, 2005, Party Paradise requested an opportunity to inspect the computers that Womac and Poirier were using at the time of the fax campaigns. On August 15, 2005, Party Paradise followed up its verbal request with a letter seeking an inspection of the computers.
On November 22, 2006, Party Paradise filed a motion for sanctions based on spoliation of evidence, seeking an adverse evidentiary presumption. In granting relief, the trial court ordered an adverse presumption that "the hard drive did contain evidence that was detrimental to defendant's case." On appeal, Party Paradise urges that the adverse presumption establishes that Poirier's computer contained the fax numbers corresponding to each intended fax recipient of advertisements faxed by Protus on behalf of ACI. Thus, Party Paradise claims that it has satisfied the element of objectively defining the class.
Initially, we question whether Party Paradise can assert a spoliation claim on behalf of the class. Since Party Paradise is a known fax recipient whose fax number has been identified, it is not similarly situated with those unknown recipients it seeks to identify with the evidence that could have been contained on Poirier's hard drive. See La. C.C.P. art. 591 A(3).
Moreover, under an intentional or negligence theory of spoliation, the presumption does not apply if the failure to produce the record is adequately explained. See Wilhite v. Thompson, 42,395 (La.App.2d Cir.8/15/07), 962 So.2d 493, 498, writ denied, 2007-2025 (La.2/15/08), 976 So.2d 175; see also Randolph v. General Motors Corp., 93-1983 (La.App. 1st Cir.11/10/94), 646 So.2d 1019, 1026, writ denied, 95-0194 (La.3/17/95), 651 So.2d 276. To employ the presumption otherwise would be to treat the failure to produce evidence under the terms of strict liability, such that the mere failure to produce evidence, regardless of the reason, would trigger the adverse presumption. This is not the standard. Wilhite, 962 So.2d at 498.
The testimony of ACI's senior director of information in charge of the IT department, Cynthia Dimitry, was adduced at the hearing on the motion. She stated that Womac's computer was inspected by Party Paradise and she was involved in the process of the inspection. Dimitry testified that shortly after ACI relocated to temporary facilities on the Northshore after Hurricane Katrina had flooded the lower floor of ACI's Metairie office, Poirier's hard drive had crashed. She did not know why the hard drive failed. The marketing department computers, including Poirier's, which had been located on the second floor of the ACI Metairie building, were the only electronic equipment that survived the storm. Dimitry explained that after the storm, the IT department had to reestablish the ACI network, which included the retrieval of fifteen servers from the Metairie office, the purchase of new computers for nearly every user at ACI, the reinstallation of software, the setting up of electronics at temporary offices on the Northshore, the enhancement of phone systems, and "pretty much reestablishing everything."
She conceded that tending to Poirier's crashed hard drive was not an important concern in the scheme of things. After unsuccessfully attempting to recover data through a software recovery program, *1028 Dimitry said she threw the hard drive out "pretty quickly" after it crashed, well before March 2006. According to Dimitry, all Poirier's documents, except her emails, had been saved in a back-up system to one of the servers. Only emails that had been sent within 30 days prior to the crashing of the hard drive or that Poirier had saved to a folder were recoverable and available for inspection. Dimitry explained that even before the storm, the ACI server only saved emails for 30 days and that any emails of an individual user that existed after the lapse of that time would have been as a result of the user having moved the email to a folder. She said that emails transferred to a folder in that manner would remain on the hard drive of a computer.
Poirier testified at the hearing as well. She stated that she did not recall having any direct communication with Protus or having received any emails or faxes from Womac regarding the fax campaign. According to Poirier, ACI never had any lists of potential customers with their fax numbers so none would have been there were not any on her computer before the hard drive crashed. Poirier remembered that prior to Hurricane Katrina she was made aware that there was a request to examine her computer made in conjunction with this litigation and had been advised to preserve it. She was asked to go through her files, and she did so, providing any information she found on the fax campaign to ACI's staff attorney. She continued using the computer, and it was available for inspection while she used it. In conformity with Dimitry's testimony, Poirier said that soon after a temporary office had been set up for her in Abita Springs, which she recalled was in late September, her hard drive crashed. After providing her with a new computer, the IT department took the crashed computer and she had not seen it since. In light of all the up-heaval due to the impact of Hurricane Katrina, Poirier bluntly admitted that when the IT departmental took her computer, the request to preserve her computer "did not cross my mind at all."
Thus, the evidence provides a reasonable explanation for ACI's failure to produce the crushed hard drive. About a month after Womac's deposition, which was the first notice ACI had of Party Paradise's intent to examine Poirier's computer, Hurricane Katrina left ACI's offices in disarray. That Poirier may have overlooked an order to preserve the crashed hard drive is understandable. Importantly, the testimony established that any evidence Poirier's hard drive may have contained about the relationship between Womac and Protus would have been communications initiated on Womac's computer, which was produced and made available for Party Paradise's inspection. Although a trial court is granted broad discretion on evidentiary rulings, see Everhardt v. Louisiana Dep't of Transp. and Dev., XXXX-XXXX (La.App. 4th Cir.2/20/08), 978 So.2d 1036, 1045, because a reasonable explanation has been provided for ACI's failure to produce the crashed hard drive, the trial court abused its discretion in ordering an adverse presumption.
DECREE
The trial court's conclusion that Party Paradise established an objectively defined class based on the evidence is manifestly erroneous; and any adverse presumption it may have given Party Paradise in finding that the class had been objectively defined was an abuse of discretion. Since we have found a factual basis does not exist for certification, the trial court legally erred in its certification. Therefore, its judgment certifying the class is reversed. *1029 Appeal costs are assessed against Debra Maddox doing business as Party Paradise.
REVERSED.
NOTES
[1] The May 30, 2008 order directed Party Paradise "be given fifteen (15) days from the date of this Judgment to submit Amended Findings of Fact and Conclusions of Law which [clarify] that the claims asserted by the class are limited to claims under the TCPA and [exclude] from the certification order and definition any claim for the receipt of fax advertisements prior to January 1, 2004." Although the parties do not complain, we note that the practice of one party preparing the reasons for a trial court's judgment has been questioned on previous occasions. See Bell v. Ayio, 97-0534, p. 3 (La.App. 1st Cir. 11/13/98), 731 So.2d 893, 896; accord City of Plaquemine v. North American Constructors, Inc., 2000-2810, p. 3 (La.App. 1st Cir.11/8/02), 832 So.2d 447, 450-55. But compare Hall v. Folger Coffee Co., XXXX-XXXX, p. 3 n. 4 (La.4/14/04), 874 So.2d 90, 95 n. 9; see also Miller v. Smith, 402 So.2d 688 (La.1981) (Lemmon. J., dissenting).
[2] At times, this witness is identified as "Charlie" and "Charli" Womac.
[3] Documents evidencing these representations by Martin were also admitted into evidence.
[4] Wadman further explained that infoUSA would have kept records for which a customer requested a list, but it would not retain a historical recording of the selection criteria used to generate a given list.
[5] See CE Design v. Beaty Const., Inc., 2009 WL 192481 (N.D.Ill.2009) (in which an Illinois federal district court rejected the notion that a master list of potential plaintiffs is necessary for class certification: "A class is identifiable if its members can be ascertained by reference to objective criteria. It is not fatal for class definition to require some inquiry into individual records, as long as the inquiry is not so daunting as to make the class definition insufficient." citing another federal district court's decision in Sadowski v. Medl Online LLC, 2008 WL 2224892 (N.D.Ill. 2008)).
[6] We find noteworthy that in the year between the time of Party Paradise's letter and the hearing on the certification motion, plaintiff did not join one other person as a party to this lawsuit. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558381/ | 22 So.3d 1247 (2009)
SKL INVESTMENTS, INC., Appellant
v.
AMERICAN GENERAL FINANCE, INC., Appellee.
No. 2008-CA-01575-COA.
Court of Appeals of Mississippi.
December 1, 2009.
*1248 Parker Hays Still, Batesville, Mark Thompson Segars, Iuka, attorneys for appellant.
Douglas L. Tynes, Pascagoula, attorney for appellee.
EN BANC.
ROBERTS, J., for the Court.
¶ 1. On August 31, 2002, a one-acre tract of land located in Booneville, Mississippi that was owned by Genise Roland was sold to SKL Investments, Inc., (SKL) for unpaid county taxes for the 2001 fiscal year. At some point prior to the two-year redemption period, the Prentiss County Chancery Clerk sent notice of the tax sale to all proper parties, including American General Finance, Inc. (American General), a lienholder. After the two-year redemption period had expired, the chancery clerk executed a tax deed to SKL.
¶ 2. On August 16, 2006, SKL filed a complaint in the Prentiss County Chancery Court to quiet title to the property.[1]*1249 American General answered and asserted that the tax sale was void because it did not receive notice pursuant to Mississippi Code Annotated section 27-43-5 (Rev. 2006). American General also asserted that the tax sale was void because the chancery clerk failed to follow the proper procedures as set forth in Mississippi Code Annotated section 27-43-9 (Rev.2006).
¶ 3. After a hearing, the chancellor found that American General did not receive notice of the tax sale; thus, the tax sale was void as to American General. However, the chancellor confirmed SKL's tax sale purchase of the property, subject to American General's lien. SKL appeals, asserting the following issues: (1) the chancellor erred in finding that American General failed to receive proper notice of the tax sale; (2) the chancellor erred in confirming the SKL's tax-sale purchase of the property subject to American General's lien; and (3) the chancellor erred in failing to award SKL damages and interest. Finding no error, we affirm.
STANDARD OF REVIEW
¶ 4. Our standard of review of a chancellor's decision is well settled: We will not disturb a chancellor's findings unless they are manifestly wrong, clearly erroneous, or the chancellor applied an erroneous legal standard. Stokes v. Campbell, 794 So.2d 1045, 1047-48(¶ 9) (Miss.Ct.App.2001). We review questions of law de novo. Gillespie v. Kelly, 809 So.2d 702, 705(¶ 9) (Miss.Ct.App.2001).
ANALYSIS
I. NOTICE
¶ 5. SKL argues that the chancellor erred in finding that American General failed to receive notice of the tax sale. Mississippi Code Annotated section 27-43-5 establishes the chancery clerk's duty to provide notice of a tax sale to lienholders when land is to be sold for taxes. Section 27-43-5 provides as follows:
It shall be the duty of the clerk of the chancery court to examine the record of deeds, mortgages and deeds of trust in his office to ascertain the names and addresses of all mortgagees, beneficiaries and holders of vendors liens of all lands sold for taxes; and he shall, within the time fixed by law for notifying owners, send by certified mail with return receipt requested to all such lienors so shown of record the following notice, to-wit:
[Notice form omitted.]
¶ 6. Sometime in June 2004, American General received, by certified mail, an instrument entitled "2001 Delinquent Tax Notices." The document did not contain the name of the property owner, a description of the land, the book and page number of the deed of trust, or the purchaser of the property at the tax sale. During the subsequent hearing, the chancery clerk testified that it was customary to send a cover page to lienholders with the list of properties attached and the property identified by a "PPIN" number. However, a copy of the notice sent to American General was not retained in the chancery clerk's files.
¶ 7. Furthermore, the chancery clerk failed to follow the requirements of Mississippi Code Annotated section 27-43-9, which provides:
Upon completing the examination for said liens, the clerk shall enter upon the tax sale book upon the page showing the sale a notation to the effect that such examination had been made, giving the names and addresses, if known, of said *1250 lienors, the book and page where the liens are created, and the date of mailing by registered mail the notice to the lienors. If the clerk finds no liens of record, he shall so certify on said tax sale book. In each instance the clerk shall date the certificate and sign his name thereto.
In its brief, SKL concedes that the chancery clerk did not strictly follow section 27-43-5 and section 27-43-9. Even so, SKL argues that American General should not be permitted to "escape on a technicality." However, "[s]tatutes dealing with land forfeitures for delinquent taxes should be strictly construed in favor of the landowners. . . [and] [a]ny deviation from the statutorily[-]mandated procedure renders the sale void." Roach v. Goebel, 856 So.2d 711, 716(¶ 29) (Miss.Ct.App.2003) (citations omitted). We conclude that American General did not receive the statutorily-required notice; thus, the chancellor correctly found that the tax sale was void as to American General. This issue lacks merit.
II. AMERICAN GENERAL'S LIEN
¶ 8. Next, SKL argues that the chancellor was correct when he confirmed the tax sale, but he erred in holding that the property at issue was subject to American General's lien. SKL argues that a valid tax sale extinguishes any existing lien of deed of trust. However, the case SKL cites as authority, Hancock Bank v. Ladner, 727 So.2d 743, 746(¶ 6) (Miss.Ct.App. 1998), is distinguishable as it dealt with a lien for a deed of trust that was executed between the date of the valid tax sale and the end of the two-year redemption period, and most importantly, the mortgagee received valid notice of the tax sale but took no action.
¶ 9. Mississippi Code Annotated section 27-43-11 (Rev.2006) states, in pertinent part, that:
A failure to give the required notice to such lienors shall render the tax title void as to such lienors, and as to them only, and such purchaser shall be entitled to a refund of all such taxes paid the state, county or other taxing district after filing his claim therefor as provided by law.
(Emphasis added). American General takes the position that the phrase "as to them only" supports the chancellor's decision to confirm the tax sale subject to American General's lien. We agree.
¶ 10. It is clear that the failure to give proper notice to a lienholder renders that tax sale void as to that lienholder. See Gober v. Chase Manhattan Bank, 918 So.2d 840, 843(¶ 10) (Miss.Ct.App.2005). The Mississippi Attorney General's Office has opined that "a chancery clerk may not certify a tax sale that is void due to the failure to give proper notice to a lienholder." Miss. Att'y Gen. Op. No. 03-0506, Dew (Oct. 17, 2003); see also Miss. Att'y Gen. Op. No. 97-0101, Ladner (Mar. 21, 1997). However, section 27-43-11 provides that the "failure to give the required notice to such lienors shall render the tax title void as to such lienors, and as to them only." (Emphasis added). We interpret that provision to mean that the tax sale is confirmed as to all others except those lienholders who failed to receive the statutorily-required notice.
¶ 11. Section 27-43-11 further provides that, in the event that a tax title is rendered void for the failure to provide the required notice to a lienholder, the purchaser at the tax sale "shall be entitled to a refund of all such taxes paid the state, county or other taxing district after filing his claim therefor as provided by law." (Emphasis added). We interpret section 27-43-11 as providing an election of remedies. In the event that a tax sale is rendered *1251 void for improper notice to one lienholder, but not others, the purchaser is faced with two options. The purchaser may opt to retain the property subject to the lien of the improperly-noticed lienholder. Alternatively, the purchaser may opt to file a claim for a refund, thereby relinquishing all rights to the property. Among other variables, the purchaser's decision will depend on the value of the property, the amount paid for the property, and the amount of the lien on the property. Accordingly, we cannot find that the chancellor erred when he confirmed the tax sale subject to American General's lien. This issue is without merit.
III. DAMAGES AND INTEREST TO SKL
¶ 12. In its last issue on appeal, SKL asserts that the chancellor erred in failing to award it damages and interest. As mentioned, pursuant to section 27-43-11, SKL is entitled to a refund of all the taxes paid, but only after filing a "claim therefor as provided by law." The record does not reflect that SKL has filed a claim for a refund of the taxes it paid. Until SKL files such a claim, we can only conclude that SKL has opted to retain title to the property subject to American General's lien.
¶ 13. SKL also argues that Mississippi Code Annotated section 27-45-27(1) (Rev.2006) supports its claim that it was entitled to damages and interest. Section 27-45-27(1) provides, in pertinent part, as follows:
The amount paid by the purchaser of land at any tax sale thereof for taxes,. . . and interest on the amount paid by the purchaser at the rate of one and one-half percent . . . per month, or any fractional part thereof, and all expenses of the sale and registration, thereof shall be a lien on the land in favor of the purchaser . . ., if the taxes for which the land was sold were due, although the sale was illegal on some other ground.
We do not interpret section 27-45-27(1) to mean that, where a tax sale is rendered void as to one lienholder, but not to others, the purchaser may recover statutory damages against the non-voided lienholder. Instead, section 27-45-27(1) holds that, if taxes were due on certain property and the tax sale was illegal, the amount that a purchaser pays at a tax sale, as well as "all expenses of the sale and registration," becomes a lien for the purchaser. Here, however, the chancellor held that SKL purchased the property at issue, but that the property was subject to American General's lien because American General did not receive proper notice of the tax sale. If SKL were allowed to recover from American General and allowed to retain its interest in the property, SKL would receive an inequitable windfall.
¶ 14. Finally, SKL claims it is entitled to damages and interest pursuant to Lawrence v. Rankin, 870 So.2d 673, 677(¶ 21) (Miss.Ct.App.2004). However, Lawrence concerned the remedy due when a landowner not a lienholder did not receive proper notice of a tax sale. Id. at 676(¶ 13). This Court held that a chancellor erred when he did not order a landowner to pay a purchaser interest due pursuant to Mississippi Code Annotated section 27-45-3 (Rev.2002) of "one and one half percent per month, together with damages thereon at a rate of 5% per annum on such amount due." Id. at 677(¶ 21). Additionally, Mississippi Code Annotated section 27-45-3 (Rev.2006) applies to redemption of land sold for taxes. There has been no redemption in this case. To the extent that this case, like Lawrence, contains factual similarities involving improper notice of the tax sale, this case is distinguished from Lawrence in that this case does not involve improper notice to the sole landowner. *1252 Instead, this case involves improper notice to one lienholder. Accordingly, section 27-43-11 applies and sets forth that SKL is entitled to a refund of the amount it paid at the tax sale if it elects to file a claim for that amount. We find no merit to this issue.
¶ 15. THE JUDGMENT OF THE PRENTISS COUNTY CHANCERY COURT IS AFFIRMED. ALL COSTS OF THIS APPEAL ARE ASSESSED TO THE APPELLANT.
KING, C.J., GRIFFIS, BARNES, ISHEE, CARLTON AND MAXWELL, JJ., CONCUR. LEE, P.J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY MYERS, P.J., AND JOINED IN PART BY IRVING, J.
LEE, P.J., Dissenting.
¶ 16. With respect to the majority, I dissent. While I agree that American General Finance, Inc., did not receive proper notice, I find that the failure to give proper notice renders the entire tax sale void, not just as to American General. "Statutes dealing with land forfeitures for delinquent taxes should be strictly construed in favor of the landowners [and] [a]ny deviation from the statutorily[-]mandated procedure renders the sale void." Rebuild America, Inc. v. Milner, 7 So.3d 972, 974(¶ 7) (Miss.Ct.App.2009) (internal citations omitted).
¶ 17. The majority is correct that failure to give proper notice to a lienholder renders that tax sale void. Mississippi Code Annotated section 27-43-11 (Rev. 2006) provides that the "failure to give the required notice to such lienors shall render the tax title void as to such lienors, and as to them only[.]" The majority interprets this to mean that notice to the principal owner, having been validly given, need not be re-noticed due to any deficient notice to the lienholder, thereby sanctioning a piecemeal conveyance. Obviously, the principal owner would be identified on any lien, and one can only imagine that the intent of the Legislature was that the principal owner would not have to be noticed also with the lienholder in addition to having received their separate individual notice. Nevertheless, failure to give a proper and correct notice in any respect whether as to the description or otherwise has rendered the tax deed void in its entirety. Surely, the Legislature has never intended to sanction piecemeal conveyances in tax sales. To do so would create havoc, confusion, and strange bedfellows to any other non-noticed existing co-owners. By the inclusion of this extra language, the Legislature may very well have proved Cicero's admonition, "Summum ius summa injuria" (the more law, the less justice).
¶ 18. Without citing supportive authority, the majority interprets "as to them only" to mean that the tax sale is confirmed as to all others except those lienors who failed to receive proper notice. I do not imagine that the Legislature intended for tax-sale purchasers to retain land with a lien attached. If a tax sale is considered void, then the tax sale may not be certified. The Legislature intended that the purchaser of land at a tax sale "shall" receive "a perfect title with the immediate right of possession." Miss.Code Ann. § 27-45-23 (Rev.2006). Mississippi law favors landowners retaining their property as opposed to a tax-sale purchaser receiving a windfall. The trade-off is the purchaser receives interest and penalties on his expenditure. To allow otherwise would open Pandora's box and result in confusion in the ownership of property.
¶ 19. The purpose of providing notice is to allow owners or lienors the opportunity to redeem the land before the tax sale is certified. The Mississippi Attorney General's *1253 Office has opined that "a chancery clerk may not certify a tax sale that is void due to the failure to give proper notice to a lienholder." Miss. Att'y Gen. Op. No. 03-0506, Dew (Oct. 17, 2003); see also Miss. Att'y Gen. Op. No. 97-0101, Ladner (Mar. 21, 1997). If the tax sale cannot be certified, then "[p]roper notice should be provided to the lienholder [pursuant to statute]. . . and the property should be sold at the next tax sale if the taxes are not paid." Miss. Att'y Gen. Op. No. 03-0506, Dew (Oct. 17, 2003).
¶ 20. Furthermore, although there is scant case law on the subject, case law appears to support the proposition that tax sales are not voided piecemeal. See Reid v. Fed. Land Bank of New Orleans, 166 Miss. 392, 148 So. 392, 393 (1933) (affirmed the chancery court's decision to void tax deed for failure to properly notice the lienor); Gober v. Chase Manhattan Bank, 918 So.2d 840, 843(¶ 8) (Miss.Ct.App.2005) (affirmed the chancellor's decision to void tax sale, reinstate deed of trust, and confirm title to the property to the lienor); see also Kron v. First Fed. Sav. & Loan Ass'n of Hattiesburg, 449 F.2d 865, 867 (5th Cir. 1971) (upheld summary judgment in favor of lienor and current property owner, finding that expiration of the redemption period following sale of property at tax sale was fatal to the purchaser's claim to the property in question and that the tax sale did not impair the lienor's right to foreclose after the redemption period and convey the property to another).
¶ 21. The last part of section 27-43-11 reads as follows: "[A]nd such purchaser shall be entitled to a refund of all such taxes paid by the state, county or other taxing district after filing his claim therefor as provided by law." Clearly, the Legislature anticipated this situation by crafting a remedy for the purchaser to receive a refund if such tax sale was deemed void. Since the Legislature has given the lienor the opportunity to redeem the land if properly given notice, I disagree with the majority that this particular language allows the tax purchaser an election of remedies. If the property had been redeemed, then the purchaser would be paid back the amount he paid at the tax sale and the amount he paid in taxes after the sale, including any interest, penalties, and costs provided by statute.
¶ 22. In regard to SKL Investments, Inc.'s request for damages, I agree that SKL is entitled to a refund of all taxes paid, but only after SKL files a claim for a refund.
¶ 23. For the foregoing reasons, I find that the chancellor abused his discretion in confirming the tax sale subject to American General's lien.
MYERS, P.J., JOINS THIS OPINION. IRVING, J., JOINS THIS OPINION IN PART.
NOTES
[1] In its complaint, SKL also named as defendants Genise Roland a/k/a Genise R. Crayton and her husband Johnny Crayton, the fee title holders, and Annise Roland, the then-possessor of the property, all of whom had failed to pay the 2001 county taxes on the property at issue. Those parties were personally served with process and did not respond to or otherwise contest SKL's complaint to quiet title. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1539181/ | 135 Pa. Commonwealth Ct. 464 (1990)
580 A.2d 1189
George CASHMARK, Petitioner,
v.
WORKMEN'S COMPENSATION APPEAL BOARD (GREAT A & P TEA COMPANY), Respondents.
Commonwealth Court of Pennsylvania.
Submitted August 17, 1990.
Decided October 12, 1990.
*465 Charles Memolo, Clarks Summit, for petitioner.
William E. Wyatt, Jr., Fine & Wyatt, P.C., Scranton, for respondent, Great A & P Tea Co.
Before McGINLEY and KELLEY, JJ., and NARICK, Senior Judge.
*466 McGINLEY, Judge.
George Cashmark (Claimant) has filed a petition for review from an order of the Workmen's Compensation Appeal Board (Board), dated December 7, 1989, affirming the decision of the referee, dated September 16, 1988, granting the modification petition of the Great A & P Tea Company (Employer). We affirm in part and reverse in part.
On August 4, 1978, Claimant suffered a lower back injury while in the course of his employment. As a result, Employer filed a notice of compensation payable providing for the payment of benefits to Claimant. Subsequently, on December 1, 1986, Employer filed a petition for modification requesting a supersedeas and alleging that, as of May 1, 1986, light duty work was available to Claimant which he was capable of performing. Claimant filed an answer denying these allegations.
Claimant submitted the deposition of Leroy Pelicci, M.D., a neurologist, who opined with a reasonable degree of medical certainty that Claimant is totally disabled. Deposition of Leroy Pelicci, M.D., dated May 14, 1987, at 37. Claimant also submitted the deposition of Robert Mancuso, the chiropractor who had been treating Claimant since his injury in 1978. Like Dr. Pelicci, Dr. Mancuso opined that Claimant is unable to work. Deposition of Robert Mancuso, dated March 3, 1988, at 22.
Employer submitted the deposition testimony of Joseph R. Sgarlat, M.D., an orthopedic surgeon, who saw Claimant on May 1, 1986. Dr. Sgarlat reviewed the medical reports of the various physicians who had treated Claimant since his injury and, in addition, Dr. Sgarlat conducted his own independent tests. Dr. Sgarlat testified with a reasonable degree of medical certainty that, although Claimant still suffers from some back problems, he is not totally disabled but is capable of performing light duty work. Deposition of Joseph R. Sgarlat, M.D., dated May 4, 1987, at 14-15.
At the hearing before the referee on February 18, 1988, Employer offered the testimony of Ronald T. Colbert, a *467 vocational consultant for Crawford Health and Rehabilitation Services (Crawford). Employer retained Crawford to assist with Claimant's rehabilitation effort and, on June 3, 1987, Crawford assigned Claimant's case to Mr. Colbert. Mr. Colbert's testimony, in conjunction with the exhibits supplied by him, shows that, between June 30, 1987 and February 2, 1988, Mr. Colbert advised Claimant of the availability of four light duty jobs for which Claimant failed to apply. Despite Dr. Sgarlat's approval, Claimant contends that he is incapable of performing the duties associated with these jobs.
The referee determined that Dr. Sgarlat's medical testimony was more credible than that of Claimant's witnesses. Decision of Referee Brian G. Eader, dated September 16, 1988 (Referee's Decision), Finding of Fact No. 10, at 3. Likewise, the referee chose to believe Mr. Colbert's testimony regarding the availability of other employment suitable to Claimant's physical limitations. Referee's Decision, Finding of Fact No. 10, at 3. The referee therefore concluded that Claimant's compensation benefits should be modified to reflect a partial disability. Referee's Decision, Conclusion of Law No. 3, at 4. The referee further authorized Employer to take credit for overpayment until compensation is adjusted in accordance with his decision. Referee's Decision at 5. No ruling was made on Employer's request for a supersedeas.
Claimant appealed the referee's decision to the Board alleging that there is insufficient evidence to establish the availability of suitable work and that, absent a supersedeas, Employer is not entitled to any credit for overpayment. The Board affirmed the referee stating that the testimony of both Dr. Sgarlat and Mr. Colbert provided substantial evidence to support the referee's determination that Employer had met its burden of proof. Claimant then filed the present petition for review with this Court.
Our scope of review is limited to determining whether any finding of fact is not supported by substantial evidence, whether an error of law was committed or whether *468 constitutional rights were violated. Lawrence v. Workmen's Compensation Appeal Board (Commercial Lovelace Motor Freight, Inc./Banner Industries and Workers), 125 Pa.Commonwealth Ct. 701, 559 A.2d 67 (1989). We conclude that there is substantial evidence to support the finding that there was suitable work available to Claimant which he refused to accept but that the referee committed an error of law by authorizing Employer to take credit for overpayment without first granting a supersedeas.
The referee's finding of partial disability is substantiated by the deposition testimony of Dr. Sgarlat. Although Claimant offered conflicting medical evidence, the referee resolved this conflict in favor of Employer. Credibility determinations are within the exclusive province of the referee. Lukens, Inc. v. Workmen's Compensation Appeal Board (Hasiey), 91 Pa.Commonwealth Ct. 55, 496 A.2d 895 (1985).
In Kachinski v. Workmen's Compensation Appeal Board (Vepco Construction Co.), 516 Pa. 240, 532 A.2d 374 (1987), the Supreme Court held that a workers' compensation claimant seeking to avoid modification of benefits on the basis that he has partially recovered must show that he has in good faith followed through on job referrals provided by the employer in occupational categories for which the claimant has been given medical clearance. Mr. Colbert testified that he notified Claimant of four job opportunities which were available and approved by Dr. Sgarlat but that Claimant failed to apply for any of these positions. Claimant himself admitted that he made no application for the jobs suggested by Mr. Colbert. Notes of Testimony, dated April 14, 1988, at 24. Therefore, because we conclude that Claimant does not meet the good faith requirement of Kachinski, we will affirm the grant of the modification petition.
With regard to the referee's determination that Employer is entitled to take credit for overpayment until compensation is adjusted, we must reverse. In Vas v. Workmen's *469 Compensation Appeal Board (Bethlehem Steel Corp.), 109 Pa.Commonwealth Ct. 447, 531 A.2d 555 (1987), this Court held that, absent a supersedeas, an employer cannot take credit for overpayment of workers' compensation benefits. Because the referee never granted Employer's request for a supersedeas, Vas is controlling and Employer is not entitled to deduct credit for overpayment from Claimant's future benefits. Where the referee fails to take proper action on Employer's request, it must be deemed denied. Department of Labor and Industry v. Workmen's Compensation Appeal Board (Bethlehem Mines Corp.), 79 Pa.Commonwealth Ct. 290, 469 A.2d 705 (1984). As a result, Employer may apply to the Workmen's Compensation Supersedeas Fund for reimbursement of payments made to Claimant after suitable work became available.[1]
Accordingly, we affirm the order of the Board insofar as it dismisses Claimant's appeal from the referee's grant of the modification petition. However, we reverse that portion of the Board's order which authorizes Employer to take credit for overpayment until compensation is adjusted.
ORDER
AND NOW, this 12th day of October, 1990, we affirm the order of the Workmen's Compensation Appeal Board, dated December 7, 1989, to the extent that it grants the modification petition on the basis of partial recovery. We hereby reverse that portion of the decision which entitles the above-captioned Employer to take credit for overpayment until compensation is adjusted.
NOTES
[1] Because Employer's request for a supersedeas is deemed denied, Employer can apply to the Department of Labor and Industry for reimbursement from the Workmen's Compensation Supersedeas Fund. See Section 443 of The Pennsylvania Workmen's Compensation Act, Act of June 2, 1915, P.L. 736, as amended, 77 P.S. § 999. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1539183/ | 118 B.R. 282 (1990)
In re ALLEGHENY INTERNATIONAL, INC., Sunbeam Corporation, Sunbeam Holdings, Inc., Almet/Lawnlite, Inc., Chemetron Corporation, Integrated Specialties, Inc., Allegheny International (USA), Inc., Al-Industrial Products, Inc., Allegheny International Exercise Co., Woodshaft, Inc., Chemetron Investments, Inc., Infoswitch, Inc., and Eliskim, Inc., Debtors.
Bankruptcy No. 88-00448, Motion Nos. 90-2458M, 90-2529M, 90-2789M and 90-4219M, Adv. No. 90-260.
United States Bankruptcy Court, W.D. Pennsylvania.
July 12, 1990.
As Amended July 25, and August 2, 1990.
Reconsideration Granted in part and Denied in part August 2, 1990.
*283 *284 Stephen I. Goldring, Asst. U.S. Trustee, W.D. Pa., Pittsburgh, Pa., for U.S. Trustee.
Douglas A. Campbell, Campbell & Levine, Pittsburgh, Pa., for The Official Committee of Unsecured Creditors for Sunbeam.
Robert G. Sable, Sable, Makoroff & Libenson, Pittsburgh, Pa., for The Official Committee of Unsecured Creditors for Allegheny International, Inc.
David A. Murdock, Kirkpatrick & Lockhart, Pittsburgh, Pa., for the Mellon Bank Group.
Denis F. Cronin, Wachtell, Lipton, Rosen & Katz, New York City, for Marine Midland Bank, N.A.
M. Bruce McCullough, Buchanan Ingersoll, P.C., Pittsburgh, Pa., for Allegheny Intern., Inc.
Richard S. Toder, Zalkin, Rodin & Goodman, New York City, for Chemical Bank.
Joseph A. Katarincic, Katarincic & Salmon, Pittsburgh, Pa., James W. Giddens, Hughes Hubbard & Reed, Herbert P. Minkel, Jr., Fried Frank Harris Shriver & Johnson, Andrew Levander, Shereff, Friedman, Hoffman & Goodman, New York City, for Japonica Partners, L.P.
Richard A. Gitlin, Hebb & Gitlin, P.C., Hartford, Conn., for Ins. Co. Lenders.
David T. Sykes, Duane, Morris & Heckscher, Philadelphia, Pa., for AI Investments, L.P.
Joel M. Walker, Pollard, Walker & Vollmer, Pittsburgh, Pa., for Prudential *285 Capital Investments and Prudential Ins. Co. of America.
John M. Elwood, Director of Reorganization, Allegheny International, Inc., Pittsburgh, Pa., for Allegheny Intern., Inc.
Securities & Exchange Com'n, New York City, for Securities & Exchange Com'n.
Larry D. Henin, Olwine, Connelly, Chase, O'Donnell & Weyher, New York City, for Official Committee of Equity Security Holders.
Timothy T. Brock, Gordon Hurwitz Butowsky Weitzen Shalov & Wein, New York City, for Fidata Trust Co. New York.
Rhoda J. Freeman, Cowen & Co., New York City, for Cowen & Co.
MEMORANDUM OPINION
JOSEPH L. COSETTI, Chief Judge.
The matter presently before the court is the debtor's[1] motion to confirm its plan of reorganization and the objections of various parties to confirmation. The court confirms the plan of reorganization, subject to the conditions and limitations set forth below. Intertwined with the motion to confirm is the Debtor's Motion Under Bankruptcy Code Section 1126(e) to Designate and Disqualify Votes of Claims and Interests Directed by Japonica Partners and Others Acting in Concert (the "debtor's motion to designate"). Also pending are Japonica's Motion Under Bankruptcy Code Section 1126(e) to Designate and Disqualify Votes of Claims and Interests Not Solicited or Procured in Good Faith ("Japonica's motion to designate") and the Motion of the Official Committee of Equity Security Holders of Allegheny International, Inc. to Disqualify All Votes on the Debtor's Stock Plan Pursuant to Bankruptcy Code Section 1126(e) (the "Equity Committee's motion to designate").
In addition, the group of 16 banks who were prepetition secured lenders to the debtor have brought an adversary action at Adversary No. 90-260 seeking equitable relief against Japonica Partners, L.P. ("Japonica") and its affiliates.
The debtor's motion to designate is granted; the votes of which are the subject of that motion are disqualified. Japonica's motion to designate and the Equity Committee's motion to designate are denied, but based on those facts certain limitations, discussed below, are imposed on certain of the secured lenders and the debtor's insiders, as well as Donaldson, Lufkin and Jenrette ("DLJ") and its affiliates. With respect to the action against Japonica by the bank group, Japonica and its affiliates are enjoined, as set forth below.
The instant matters are core proceedings, involving confirmation of a plan of reorganization, 28 U.S.C. § 157(b)(2)(L), and "other proceedings affecting . . . the adjustment of the debtor-creditor or the equity security holder relationship. . . ." 28 U.S.C. § 157(b)(2)(0). This court has jurisdiction over the parties and subject matter pursuant to 28 U.S.C. § 1334.
This opinion shall constitute findings of fact and conclusions of law, pursuant to Bankruptcy Rule 7052.
I. THE MOTIONS TO DESIGNATE
In preparation for trial on the instant matters, intense discovery occurred. The discovery took the form of multitudinous depositions, including multiple depositions of the same person compressed into a short time. The discovery activity included allegedly "cloak and dagger" activities to serve deposition notices on certain parties and equally clever methods to avoid depositions. Especially of note for reasons we will discuss infra, Japonica was unable to serve a deposition notice on Daniel Lufkin, the secured lenders' designated member of the board of directors of the reorganized debtor.
Unless it is necessary to repeat certain facts in the interest of clarity, the court will not burden readers with the history of *286 the first 22 months of this case. The parties to these matters are painfully aware of those facts. For the uninitiated, those facts are available in numerous memorandum opinions by this court, both published and unpublished. For the motions to designate, we take up the saga, beginning on December 29, 1989, when the debtor filed the instant plan of reorganization. The court conducted several days of hearings on the disclosure statement in January 1990.[2] The court approved the debtor's disclosure statement on February 5, 1990, setting the last day to ballot on the debtor's plan as March 30, 1990, at 5:00 P.M.
However, on January 24, 1990, near the conclusion of the hearings on the debtor's disclosure statement, Japonica filed its plan of reorganization (the "Japonica plan") and disclosure statement which mirrored and utilized in large part the debtor's material and organization. The court was urged by Japonica not to approve the debtor's disclosure statement until Japonica's disclosure statement could be approved and a joint ballot distributed. Japonica requested an extraordinary reduction in the time the rules provided for confirmation. The court feared additional delay and denied the request. The court set separate schedules for confirmation of the plans and promised Japonica an opportunity for creditors to vote on the Japonica plan before any order of confirmation would be issued.
The Japonica plan offered cash equivalent to $6.42 per share with holdbacks, as compared to the debtor's proposed stock plan which offered $7.00 per share. Under the Japonica plan, Japonica would acquire control of the debtor. Deposition of Michael G. Lederman, Esq., 4/20/90, 290; 5/3/90, 66. Although Japonica had indicated its interest in acquiring control of the debtor as early as July 1989, Japonica held no interest as a creditor or equity holder of the debtor until immediately prior to the filing of its proposed plan and disclosure statement. To qualify as a party in interest authorized to file a plan, Japonica purchased public subordinated debentures of the debtor with a face value of $10,000 for $2,712. At that time, the court was unaware that the purchase of claims would be the tactic used by Japonica to gain control.
A. Acquisition of Claims by Japonica
On February 23, 1990, Japonica began purchasing claims of the secured bank lenders, Class 2.AI.2. This occurred after the debtor's disclosure statement was approved and the debtor's plan balloting had commenced. This was also after Japonica had proposed a plan and disclosure statement and had become a proponent of a plan. The purchase of the following claims gave Japonica control of approximately 27% of the claims in Class 2.AI.2:
% OF
DATE FACE
NAME OF BANK SOLD FACE AMOUNT PRICE PAID AMOUNT
Canadian Imperial 2/23/90 $12,614,800 $10,121,543.25 80.24%
Bank of Commerce
("CIBC")
Israel Discount 2/23/90 2,803,289 2,247,005.25 80.16%
Bank of New York
The Northern 2/26/90 5,606,578 4,498,462.50 80.24%
Trust Company
Harris Trust and 2/26/90 11,213,154 8,966,925.00 79.97%
Savings Bank
NCNB National 3/13/90 8,409,868 6,747,237.00 80.23%
Bank of North
Carolina
First National 3/23/90 9,811,511 8,339,784.35 85%
Bank of Boston
*287 Debtor's Exhibit D-1. On or about March 26, 1990, Japonica purchased the claim of Continental Bank, N.A. ("Continental"), with a face amount of $12,614,800, for $11,984,060, or 95% of the face amount. Following the purchase of the claim of Continental, Japonica held 33.87% of the claims in Class 2.AI.2, enabling Japonica to block an affirmative vote by that class on the debtor's plan of reorganization. 11 U.S.C. § 1126(c).[3] After achieving its blocking position, Japonica purchased the claim of Bank of Hawaii, with a face amount of $2,242,630, for $1,838,956.60, or 82% of the face amount. Under the terms of the assignments by the aforementioned banks, Japonica caused the votes of the claims it purchased to be voted against the debtor's plan.[4]
In addition to purchasing the claims for cash, Japonica agreed to indemnify the assigning banks for all expenses and liability arising from certain lawsuits against the members of Class 2.AI.2. At least some of the assigning banks would not sell their claims unless Japonica agreed to assume such liability. For example, CIBC would not have sold its claim at any price unless Japonica agreed to assume the expenses and liability arising from those lawsuits. The most notable of those lawsuits is an adversary action in this court, at Adversary No. 88-186, in which the Official Committee of Unsecured Creditors of Allegheny International, Inc. (the "Creditors' Committee")[5] has sued the secured bank lenders under theories of preference, fraudulent conveyance, equitable subordination, and lender liability.[6]
Japonica also purchased claims from senior unsecured creditors in Class 4.AI.2. Japonica purchased the claims of Swiss Volksbank and certain other holders of Swiss Franc notes, with a face amount of $21,793,590, for $14,383,769.40, or 66% of the face amount. Japonica caused the votes of these claims to be voted against the debtor's plan. Although Japonica purchased less than 1/3 of the claims in Class 4.AI.2, its negative votes were sufficient to defeat the debtor's plan in that class because of the large number of claims in Class 4.AI.2 that did not vote. It should be noted that Swiss Volksbank was a member of the Creditors' Committee and the Creditors' Committee had recommended a favorable vote on the debtor's plan. It should also be noted that the Creditors' Committee, on behalf of all these unsecured creditors, is a plaintiff in the bank litigation. Unsecured creditors, such as the holders of the Swiss Franc notes, have interests adverse to the interests of the secured bank lenders and would benefit from a favorable result in the litigation. Therefore, Japonica has purchased claims which constitute a blocking position in two classes whose interests are diametrically opposed in the bank litigation.
B. The Debtor's Motion to Designate
Section 1126(e) of the Bankruptcy Code, 11 U.S.C. § 1126(e), empowers the court to "designate" (i.e., disqualify) the ballot of "any entity whose acceptance or rejection ... was not in good faith or was not solicited or procured in good faith...." However, the Bankruptcy Code does not define "good faith." There are few precedents, none controlling, concerning 11 U.S.C. § 1126(e); therefore, we look to the plain language of the section and section 203 of *288 the Bankruptcy Act, the precursor of section 1126(e), as well as the cases interpreting section 203 of the Act.
Section 203 of the Bankruptcy Act provided that "[i]f the acceptance or failure to accept a [Chapter X] plan by the holder of any claim or stock is not in good faith, in light of or irrespective of the time of acquisition thereof, the judge may ... direct that such claim or stock be disqualified for the purpose of determining the requisite majority for the acceptance." In Young v. Higbee Co., 324 U.S. 204, 211, 65 S.Ct. 594, 598, 89 L.Ed. 890 (1945), the Supreme Court declared that "the history of [section 203] makes clear that it was intended to apply to those stockholders whose selfish purpose was to obstruct a fair and feasible reorganization...." The history of section 203, which the court discussed in a footnote, remains relevant:
A year before the House Committee on the Judiciary held its extensive hearings on the Chandler Act a Circuit Court of Appeals held that a creditor could not be denied the privilege of voting on a reorganization plan under Sec. 77B, although he bought the votes for the purpose of preventing confirmation unless certain demands of his should be met. Texas Hotel Corporation v. Waco Development Co., 5 Cir., 87 F.2d 395. The hearings make clear the purpose of the Committee to pass legislation which would bar creditors from a vote who were prompted by such a purpose. To this end they adopted the `good faith' provisions of Sec. 203. Its purpose was to prevent creditors from participating who `by the use of obstructive tactics and hold-up techniques exact for themselves undue advantages from the other stockholders who are cooperating.' Bad faith was to be attributed to claimants who opposed a plan for a time until they were `bought off'; those who `refused to vote in favor of a plan unless ... given some particular preferential advantage.' Hearings on Revision of the Bankruptcy Act before the Committee on the Judiciary of the House of Representatives, 75th Cong., 1st Sess. on H.R. 6439, Serial 9, pp. 180-182.
Id. at 211 n. 10, 65 S.Ct. at 598 n. 10.
From the preceding paragraph, it is clear that section 203 of the Bankruptcy Act was enacted, inter alia, in response to Texas Hotel Securities Corp. v. Waco Development Co., 87 F.2d 395 (5th Cir.1936), cert. denied sub nom., Waco Development Co. v. Rupe., 300 U.S. 679, 57 S.Ct. 671, 81 L.Ed. 883 (1937); see also S. Neely, Claims Assignments, Southeastern Bankruptcy Law Institute Program Material, K-19 (1990). That case is strongly analogous to the case at bar. Because of the strong similarity, and because section 203 is the precursor of section 1126(e), it is appropriate to examine that decision.
In 1928, Waco Development Company ("Waco") deeded a vacant lot to Texas Hotel Securities Corporation ("THSC"), an entity run by Conrad Hilton. THSC built and furnished a hotel on the lot with money raised from the issuance of mortgage notes. The hotel, but not the furniture, was then deeded back to Waco which assumed the mortgage notes. THSC then leased the hotel and made further improvements to the hotel not required by the lease. THSC ultimately defaulted on the lease. In a Texas state court proceeding, the lease was canceled and the furnishings and the value of the improvements were forfeited to Waco.
Waco subsequently sought to reorganize under section 77B of the Bankruptcy Act. THSC acquired claims against Waco for the avowed purpose of controlling the plan of reorganization so that THSC could ostensibly recover losses associated with the cancellation and forfeiture and regain management of the hotel. In this connection, Hilton voted against the plan of reorganization, which had provided that the hotel would be leased to another entity.
The Court of Appeals for the Fifth Circuit held that Hilton's negative vote, which resulted in failure to confirm, was not improper or unlawful. However, William O. Douglas, who was then a commissioner of the Securities and Exchange Commission, saw Hilton's actions as "extort[ing] tribute *289 from other creditors and stockholders as the price of their assent to a plan." Securities and Exchange Commission, Report on the Study and Investigation of the Work, Activities, Personnel and Functions of Protective Reorganization Committees, Part VIII at 121 (1940); see Young v. Higbee, 324 U.S. at 211 n. 10, 65 S.Ct. at 598 n. 10.
In the case at bar, Japonica, by acquiring a blocking position, has defeated the debtor's plan and can defeat any other plan and thereby obstruct a "fair and feasible reorganization." Id. at 211, 65 S.Ct. at 598. Japonica, like Hilton in the Waco case, bought a blocking position after the debtor proposed its plan of reorganization. In Waco, Hilton's objective was to force Waco to reestablish Hilton's interest in the hotel. In the instant case, Japonica's interest is to take over and control the debtor. Section 1126(e) and its predecessor were intended to enable the court to disqualify the votes of parties who engage in such conduct.
In a subsequent case interpreting section 203 of the Bankruptcy Act, the Circuit Court of Appeals for the Second Circuit held that the purchase of claims for the purpose of securing approval or rejection of a plan of reorganization is not per se bad faith:
The mere fact that a purchase of creditors' interests is for ... securing the approval or rejection of a plan does not of itself amount to `bad faith.' When that purchase is in aid of an interest other than an interest as a creditor, such purchases may amount to `bad faith' under section 203 of the Bankruptcy Act.
In re P-R Holding Corp., 147 F.2d 895, 897 (2d Cir.1945). Bankruptcy courts interpreting section 1126(e) have quoted this language with approval. In re Gilbert, 104 B.R. 206 (Bankr.W.D.Mo.1989); In re MacLeod Co., Inc., 63 B.R. 654 (Bankr.S.D. Ohio 1986). Although Lederman testified that he voted against the plan for economic reasons, the court does not find the economic reasons offered by Japonica creditable. We find that Japonica acted "in aid of an interest other than an interest as a creditor...." In re P-R Holding, 147 F.2d at 897. The overriding fact that causes this court to reach this conclusion is that Japonica chose to buy claims which gave it unique control over the debtor and the process. With one minor exception, Japonica purchased its claims and became a creditor after the debtor's disclosure statement was approved. Japonica knew what it was getting into when it purchased its claims. Japonica is a voluntary claimant. If Japonica was unsatisfied by the proposed distribution, it had the option of not becoming a creditor. Japonica could have proposed its plan without buying these claims.
1. The Court Finds that Japonica Acted in Bad Faith
Japonica's actions with respect to the purchase of claims were in bad faith. Notwithstanding Japonica's allegedly longstanding interest in the debtor, Japonica filed its plan of reorganization at the eleventh hour.[7] Notwithstanding Japonica's allegedly longstanding interest in the debtor, Japonica did not purchase significant claims until the voting period on the debtor's plan. Japonica was also at this time a proponent of a plan. The particular claims that Japonica purchased, and the manner in which they were purchased, can be used to determine their intent. Japonica purchased a clear blocking position in Class 2.AI.2, the secured bank lenders. Because that class was the most senior class, a negative vote in that class made confirmation extremely difficult, if not impossible. Japonica paid approximately 80% of the face amount for the first five claims in Class 2.AI.2. As Japonica approached ownership of 33% in amount of this class, it paid 85% of the face amount for the next claim, that of First National Bank of Boston. It then purchased the claim of Continental Bank for 95% of the face amount. This gave Japonica 33.87% of the amount of Class *290 2.AI.2 claims. Thereafter, Japonica purchased one more bank claim, but only for 82% of the face amount. If Japonica purchased bank claims solely for economic purposes, it would not have paid 95% of the face amount and then returned to an 82% purchase. Instead, it purchased almost exactly the amount required to block the plan of reorganization.
Lederman was a bankruptcy lawyer who clearly understood the significance of 33 1/3% of a class. The court finds from these facts Japonica's purpose was control and was in bad faith. Japonica recited to the court that it wanted to provide cash to creditors. Japonica's plan proposes to pay cash to creditors, but with a portion held back pending resolution of unresolved claims. Because the court believed this recitation, the court granted additional time to Japonica for its plan. However, the court was misled. Japonica's purpose was control and so we find.
Similarly, Japonica purchased only enough claims in Class 4.AI.2 to block an affirmative vote by that class. That class follows Class 2.AI.2 in priority. Thus, Japonica purchased a blocking position in the two highest classes which were impaired, ensuring that the debtor could not confirm its plan of reorganization. Again, we note that the two classes in which Japonica purchased claims have directly opposite interests with respect to the bank litigation. The court is hard pressed to characterize Japonica's actions as merely furthering their own economic interests.
Votes must be designated when the court determines that the "creditor has cast his vote with an `ulterior purpose' aimed at gaining some advantage to which he would not otherwise be entitled in his position." In re Gilbert, 104 B.R. at 216; see also Insinger Machine Co. v. Federal Support Co. (In re Federal Support Co.), 859 F.2d 17 (4th Cir.1988).
In In re MacLeod, 63 B.R. at 656, the bankruptcy court designated the votes of dissenting creditors who were competitors because the court concluded that those votes were cast for the "ulterior purpose of destroying or injuring debtor in its business so that the interests of the competing business ... could be furthered." Although the debtor and Japonica are not engaged in competing businesses, the court finds In re MacLeod analogous to the case sub judice. Japonica and the debtor were proponents of competing plans of reorganization. Japonica's stated purpose was to take over the debtor. To do so, it was necessary for Japonica to block confirmation of the debtor's plan of reorganization. Thus, the court concludes that Japonica's actions were for an ulterior motive.
Under chapter 11, creditors and interest holders vote for or against a plan of reorganization, after adequate disclosure, if such vote is in their best economic interests. If, as in the instant case, an outsider to the process can purchase a blocking position, those creditors and interest holders are disenfranchised. If competing plans of reorganization are pending, the court must consider the preferences of the creditors and interest holders. If a plan proponent, such as Japonica, can purchase a blocking position, the votes of the other creditors and interest holders are rendered meaningless. Moreover, Japonica, who chose to become a creditor, should not have veto control over the reorganization process. The court does not believe that such a result was intended by Congress. Therefore, for all of the reasons stated above, the court designates the votes of Japonica pursuant to 11 U.S.C. § 1126(e) in Class 2.AI.2 and Class 4.AI.2.
C. The Alleged Milligan Conspiracy
Prior to voting on the debtor's plan of reorganization, various creditors expressed concern about the liquidity and stability of the stock they would receive under the debtor's plan. Those creditors, particularly the secured lenders, emphasized the need for an orderly sale mechanism for creditors who did not wish to hold the stock longterm. They feared that large blocks of stock would be sold soon after the plan was consummated and as a result of these big sales, the market would be flooded and the price of the stock would be depressed. The unsecured creditors also feared the banks *291 could cause a control transaction to occur, defeating the purpose of the reorganization plan and making the warrants worthless.
From depositions it appears that in late January 1990, Charles O'Hanlon, a representative of Mellon Bank, N.A., the agent for the consortium of 26 banks that comprised the secured lenders, met in Florida with representatives of the debtor, including James D. Milligan, the chief executive officer of Sunbeam and the chairman, chief executive officer, and chief executive officer-designate of the reorganized AI, to discuss, inter alia, the concerns of the secured lenders about the liquidity of the stock and request a mechanism for sale of the stock by those banks that would want to sell. At that meeting, O'Hanlon asked Milligan and Samuel H. Iapalucci, the vice president and chief financial officer, to help locate prospective purchasers of the reorganization stock. O'Hanlon and Milligan both agreed that neither Milligan nor the debtor should actually be involved in the sale or purchase of the stock. However, an officer of Standard Chartered Bank testified that John Elwood, the director of reorganization for the debtor, advised him of the possibility of a buyer of the when-issued shares. Deposition of David W. Robie, 22-25. An officer of National Westminster Bank testified about a similar conversation with Anthony Munson, the treasurer of the debtor. Deposition of Michael E. Mahoney, 23-24.
Although the exact chronology is unclear from the record, Milligan had discussions with various potential investors familiar to him, including Melvyn Klein, Daniel Lufkin,[8] and the Belzberg Brothers of Canada, concerning purchase of the reorganization securities. O'Hanlon and Gerald Shapiro, chairperson of the Creditors' Committee, had agreed that "DLJ" would be acceptable.[9] At some time, Milligan advised Lawrence M. v. D. Schloss of DLJ that he had spoken with representatives of GKH Partners, who had indicated interest in purchasing the reorganization securities upon their issuance.
On March 7, 1990, at a meeting in Lufkin's office in New York City, Milligan told Lufkin that the aforementioned investors, and others, had "a desire to own equity in whatever company I ran, and that creditors had expressed a desire to sell equity, and they had selected or intended to indicate that DLJ could act as an agent on behalf of would-be purchasers...." Milligan Deposition, 121-22. Iapalucci was also present at that meeting; he explained the plan, including the "poison pill" or change of control provision. That provision provides that no entity or entities acting in concert could acquire more than 30% of the when-issued stock without the offer being made to all shareholders. Id. at 128-32. The next day, Milligan, Iapalucci, representatives of DLJ, and representatives of GKH met at DLJ's offices. Shortly after that meeting, as part of their due diligence, representatives of DLJ and GKH toured *292 various facilities of the debtor. Milligan participated in those tours.
On or about March 16, 1990, DLJ advised those secured lenders who had not sold their claims that a "group of investors has proposed buying when-issued stock from the individual AI Secured Banks. The proposed purchase price is $6.25 per share." Thereafter, Schloss advised the bank group's financial advisor, Houlihan Lokey Howard & Zukin ("Houlihan Lokey") of the outline of the plan to purchase the when-issued stock. Houlihan Lokey then notified all of the banks, and provided DLJ with the names and addresses of the contact people for each of the members of the bank group.
DLJ acted as the agent for those investors. Deposition of Frank E. Krepp (Pittsburgh National Bank), 26; Mahoney Deposition, 30. The identities of those investors were undisclosed at the time of the offer. Deposition of Charles F. O'Hanlon, III, 87; Deposition of Harvey L. Peckins (Bank of New York), 88; Robie Deposition, 32. The DLJ offer was made to every member of Class 2.AI.2 who had not assigned its claim to Japonica. DLJ, acting on behalf of its investors, negotiated individually with each bank that was interested in selling its when-issued shares, ultimately entering into Stock Purchase Agreements with the following banks: Bank of America National Trust and Savings Association; Bank of New York; Commerzbank Aktiengesellschaft; Citizens and Southern National Bank; M & I Marshall & Illsley Bank; Bank One; Manufacturers Hanover Trust Company; Barclays Bank PLC; Bayerische Vereinsbank AG; The Bank of Tokyo Trust Company Moia Group Ltd.; Pittsburgh National Bank; and First American Bank. Neither Milligan nor any other representative of the debtor were involved in the negotiations. O'Hanlon Deposition, 131, 183-84; Deposition of Samuel H. Iapalucci (4/12/90, p.m.), 51, 83, 130; Krepp Deposition, 23, 26, 77, 107; Milligan Deposition, 63, 85; Robie Deposition; Deposition of Lawrence M. v. D. Schloss, 62-63.
The stock purchase agreements did not require the banks to vote in favor of the debtor's plan. Deposition of Eren Hussein (Barclay's Bank), 32; Krepp Deposition, 22-23; Mahoney Deposition, 47; Peckins Deposition, 80-82; Robie Deposition, 32. In fact, some of the banks required a specific provision to that effect in their stock purchase agreements. Krepp Deposition, 22-23, 69-70, 78-79, 97-98, 100; Mahoney Deposition, 47. However, the stock purchase agreements required the banks to use their "best efforts" to effectuate such agreements. Three banks which did not enter into stock purchase agreements voted in favor of the debtor's plan.[10]
Prior to March 16, 1990, the debtor had arranged a meeting with Swiss Volksbank. That meeting was requested by Swiss Volksbank, Milligan Deposition, 157, and was intended as a discussion of the company and the plan of reorganization. On the morning of March 19, 1990, the following people met with representatives of Swiss Volksbank: Oliver Travers, the chairman and chief executive officer of the debtor; Munson; Robert Martin of Smith Barney Harris & Upham, the debtor's financial advisor; and M. Weston Chapman of DLJ.[11] At that meeting, counsel for Swiss Volksbank indicated to Chapman that the Swiss noteholders were interested in selling their stock; they did not want to hold stock in a reorganized company. Deposition of Mark Weston Chapman, 21-22, 25-26. None of those parties offered to purchase any of the reorganization stock of the Swiss noteholders, although Chapman raised that possibility at another meeting later that day. Swiss Volksbank stated that they had received an offer from Japonica, so that time was of the essence. Id. at 26-27; Travers Deposition, 68. DLJ and the Swiss Volksbank did not enter into a stock purchase agreement, but it appears that they began the process. As stated *293 above, Japonica ultimately purchased a significant portion of the Swiss Franc notes.
As of March 30, 1990, when the voting on the debtor's plan concluded, the court had not approved Japonica's disclosure statement. Therefore, creditors and interest holders could only vote for, or against, the debtor's plan. The court approved the Japonica disclosure statement on May 3, 1990.
1. Votes in Favor of the Plan Will Not Be Designated
The motions to designate which Japonica and the Equity committee have filed seek to designate all votes filed in favor of the debtor's plan. Japonica and the Equity Committee assert that the transactions involving DLJ, Milligan, and the secured lenders were not disclosed, in violation of 11 U.S.C. § 1125. Japonica and the Equity Committee contend that the other creditors would not have voted for the debtor's plan if they had known about the alleged "Milligan conspiracy." They assert that the purpose of the transaction was to take control of the debtor and entrench Milligan and certain debtor executives as the management. Japonica and the Equity Committee further assert that such control of the debtor was to be obtained without paying a premium to other creditors. Japonica and the Equity Committee also assert that the debtor has discriminated against certain creditors and the equity holders as a result of the attempted transaction with DLJ. Japonica and the Equity Committee further assert that the debtor's plan was proposed in bad faith, in contravention of 11 U.S.C. § 1123. In this connection, the parties agree that many of the issues raised in these two motions overlap with objections to confirmation.
Although the court will not designate all votes on the debtor's plan of reorganization, as requested by Japonica and the Equity Committee, certain activities and matters which the court finds objectionable will be dealt with in the context of confirmation. Section 1126(e) provides that the court may designate the votes of "any entity whose acceptance or rejection ... was not in good faith, or was not solicited or procured in good faith...." Even if the court should hold that the attempted transaction between DLJ and the banks was not in good faith, the court cannot disqualify the votes of the other remaining claimants who knew nothing about the transaction. The remedy under 11 U.S.C. § 1126(e) is to disqualify acceptances or rejections that have been improperly solicited. Trans World Airlines, Inc. v. Texaco, Inc. (In re Texaco, Inc.), 81 B.R. 813 (Bankr.S.D.N.Y. 1988). Simply stated, the court should designate the votes of only those creditors or interest holders who were engaged in wrongdoing. There is no authority for designating the votes of innocent creditors or interest holders.[12]
Nor do we find sufficient grounds for designating the votes of the banks that accepted the various offers. Although we are concerned by the conduct of DLJ and the secured banks, we cannot conclude that the banks voted "in aid of an interest other than an interest as a creditor...." In re P-R Holding, 147 F.2d at 897. Unlike Japonica, the banks have been parties to this case since that fateful Saturday afternoon in February 1988. Similarly, we cannot conclude that the banks acted for an improper or ulterior motive. In re Pine Hill Collieries Co., 46 F.Supp. 669 (E.D.Pa. 1942). The banks voted for the debtor's plan because they thought it to be in their best interest. The banks favored the debtor's plan even without the possibility of selling their shares. Mahoney Deposition, 47; Hussein Deposition, 32; Krepp Deposition, 21-22; Deposition of Gev F. Nentin (Manufacturers Hanover Trust Company), 102-103; Deposition of Craig Wolf (Citizens and Southern Bank), 26-28. Notwithstanding their concerns about the liquidity of the reorganization shares, the banks intended to vote for the debtor's plan of reorganization. Hussein Deposition, 39-40; Deposition of Robert TenHave (Commerzbank) *294 20; Krepp Deposition, 42-43; O'Hanlon Deposition, 43-46. Although some of the aforementioned testimony may have been self-serving, it is consistent with the representations made in court over the last several months. An earlier, similar, permutation of the present plan of reorganization was a joint submission of the debtor and the bank group, although the plan of reorganization sub judice was not filed jointly with the bank group.[13] The court finds that the attempted transaction between DLJ and the banks did not cause the banks to change their intended votes for the debtor's plan. Moreover, three banks that did not enter into agreements with DLJ voted in favor of the debtor's plan and their votes would be sufficient to carry the class.
It must also be emphasized that the contemplated purchase price for the when-issued shares, $6.25, was not a premium. It fell within the range of estimates that previously had been made of the value of the when-issued shares, and is consistent with the court's determination of value, discussed below. It should be noted that Japonica later purchased the claims of Class 4.AI.2 at a price equivalent to $7 per share.
However, because it appears to the court that the transactions with DLJ may have permitted DLJ or others to take control of the debtor, the court treats these matters as objections to confirmation. The court does not view those events as a "Milligan conspiracy," although it finds the process inept and ill-timed and lacking disclosure.
All of the parties know that this reorganization has been a fragile process. Consensus has been virtually unattainable. The court questions the thought given to these activities which could upset the delicate process. The third involvement of DLJ is incredible, in light of this court's oft-stated disgust with their earlier failed efforts.
Nevertheless, the court denies the motions of Japonica and the Equity Committee to designate all other votes in favor of the debtor's plan. Later in the context of confirmation, the court will resolve the matters it finds inequitable.
II. THE COMPLAINT OF THE BANKS FOR EQUITABLE RELIEF AND TO RESTRAIN JAPONICA AND ITS AFFILIATES
On April 14, 1989 Japonica announced a tender offer for all claims in Class 7.AI.1, the subordinated debt, and for certain of the claims in Class 5.CH.1, Chemetron general unsecured claims. This tender offer was held open until May 16, 1990. Through the tender offer, Japonica acquired approximately 62% of the claims in Class 7.AI.1 and 36% of the debentures in Class 5.CH.1.
On May 3, 1990 the court approved Japonica's disclosure statement. The court notes that on that date Japonica's tender offer was still outstanding. Therefore, from the approval of its disclosure statement on May 3, 1990, until the expiration of the tender offer, May 16, 1990, Japonica was soliciting claims outside its plan while it was a proponent both before and after it had an approved disclosure statement.
The court further notes that on June 7, 1990 Japonica purchased the claims of several insurance companies in Class 4.AI.2, senior unsecured claims. Those creditors had voted against Japonica's plan. Thereafter, on June 8, 1990, the final day for voting on Japonica's plan, those insurance companies moved for leave to change their vote. Japonica purchased those claims for $7.00 per share more than the $6.42 per share which was offered by the Japonica plan.
The results of the balloting on Japonica's plan were filed with the court on June 21, 1990. Three classes of creditors and one class of interest holders did not accept the Japonica plan. The Japonica plan voting results appear as follows: *295
Class % of the Voters % of the Dollars
2.AI.2 36 38
4.AI.2 87 17
5.AI 84 80
5.CH.1 92 66
7.AI.1 88 95
8.AI.1 92 N/A
8.AI.2 74 N/A
9.AI.1 47 N/A
It should be noted again at this point that Japonica's plan was allowed to go forward for voting by creditors because it promised a cash payout to the creditors. Although the court believed the debtor's plan could be confirmed, creditors had consistently expressed strong interest in receiving cash rather than stock. Therefore, the court indulged Japonica and allowed it to go forward with its plan. The Japonica cash plan failed to win the approval of three classes of creditors and cannot be confirmed.
While the above balloting transpired, Japonica was permitted to perform due diligence of the debtor pursuant to an order of court dated March 15, 1990, which Japonica requested. Although there was an early dispute prior to the order regarding the debtor's cooperation with Japonica, on the whole it appears that the debtor more than complied with this court's order. In fact, the debtor provided Japonica with office space and use of other facilities at their general office in Pittsburgh. On June 11, 1990, M. Bruce McCullough, Esq., the debtor's chief bankruptcy counsel, informed Japonica that their due diligence process was terminated and that they would have to leave the debtor's general office at the end of that business day.
On June 12, 1990, a group of 16 banks commenced an adversary action, at Adversary No. 90-260, against Japonica and its affiliates. That action seeks, inter alia, the following equitable relief: enjoining Japonica from interfering with the management or exercising control over the business or property of the debtor; requiring that all distributions to Japonica be held as security for the performance of certain obligations under the certificate of reorganization of the reorganized debtor and enjoining Japonica from exercising control over the reorganized debtor; prohibiting Japonica from designating directors of the reorganized debtor; limiting the distribution to Japonica to the lesser of the amount they paid to purchase the claims or the distribution provided in their plan; or, equitably subordinating the claims purchased by Japonica to all other claims.
The defendants have answered and raised counterclaims and third party claims. The court separated the trial of issues arising under the adversary complaint from the counterclaims and third party complaint and limited the hearing to matters that were related to the confirmation of the debtor's plan of reorganization. Japonica demanded a jury trial; the court denied that request.
In a factually related matter, the debtor's motion to designate, the court found that Japonica entered upon a course of conduct designed to gain control of the debtor. The facts in this proceeding reinforce the court's finding of bad faith conduct of Japonica to further manipulate the bankruptcy process by the strategic purchase of claims. The court intends to issue an injunction related to the issues of control and governance.
A. Public Tender Offer of the Subordinated Debentures While Japonica Was a Proponent of a Plan
Japonica, a proponent of a plan, chose an "end run" around the bankruptcy process by purchasing through its public tender offer approximately 62% of a class. Before the Japonica disclosure statement was approved, Japonica launched a public tender offer for all claims in Class 7.AI.1 and for certain of the claims in Class 5.CH.1. The tender offer expired during the voting period for the Japonica plan. Pursuant to its tender offer, Japonica acquired approximately 62% of Class 7.AI.1 and 36% of the debentures in Class 5.CH.1.
Japonica did not receive this court's approval for its tender offer. As a plan proponent, Japonica could not have solicited acceptances until a disclosure statement had been approved. 11 U.S.C. § 1125(b). Japonica's action caused discriminatory treatment among members of the same class, in violation of 11 U.S.C. § 1123(a)(4). *296 Those who accepted the Japonica tender offer received immediate cash. Those creditors who did not would receive their distribution at a later undetermined date, pursuant to the "official" Japonica plan. Those creditors would receive potentially more cash, but subject to an undesired holdback.
During this period, Japonica had incompatible and inconsistent roles. Japonica made an offer to purchase the claims of Class 7.AI.1. Japonica was also a plan proponent with an offer to that class. The court finds that Japonica acted in bad faith by offering to provide a settlement to a class of claimholders in the absence of a confirmed plan. By doing so, Japonica did not comply with the letter or the spirit of the Bankruptcy Code.
It is beyond dispute that a debtor may not pay creditors outside of a plan of reorganization. Other courts have held that such attempts were an impermissible circumvention of the Bankruptcy Code. See Pension Benefit Guaranty Corp. v. Braniff Airways, Inc. (In re Braniff Airways, Inc.), 700 F.2d 935, 940 (5th Cir.1983) ("The debtor and the Bankruptcy Court should not be able to short circuit the requirements of Chapter 11 for confirmation of a reorganization plan. . . ."); Official Committee of Equity Security Holders v. Mabey (In re A.H. Robins Co.), 832 F.2d 299, 300 (4th Cir.1987), cert. denied, 485 U.S. 962, 108 S.Ct. 1228, 99 L.Ed.2d 428 (1988) ("The disbursement of such funds [to certain unsecured creditors] prior to the confirmation of a plan of reorganization . . . would violate the Bankruptcy Code.")
In a prior opinion in this case, this court declared that the assignment of claims "allows a third party to do something which the debtor cannot" before confirmation of a plan because of the constraints of sections 1125 and 1129. In re Allegheny International, Inc., 100 B.R. 241, 243 (Bankr.W.D. Pa.1988). Although the court was critical of the process, the court allowed the trading in claims because the purchasers of claims there were speculators who were using their own resources. Under the special facts of this case, the court cannot apply the same distinction to Japonica. The earlier purchasers of claims were not proponents of a plan Japonica is!
Japonica's strategic purchases of claims in strategic classes to advance the position of the proponent is not acceptable and constitutes at least bad faith, if not an unlawful act, in the pursuit of confirmation of its plan. 11 U.S.C. § 1129(a)(3).
As the above cited opinion indicated, the result would have been different if the claims purchasers had inside knowledge. Referring to the 1983 Advisory Committee Note to Rule 3001(e), the court stated that, "[w]e recognize that the cases cited therein involved breaches of fiduciary duty. A breach of fiduciary duty implies inside knowledge." Id. at 243. As already discussed, Japonica had vast knowledge of the most intimate details of this company unmatched by any other creditor. Japonica possessed all the knowledge of an insider.
Most important, if Japonica had made a substantially similar tender offer to this class as part of its own plan, the plan would not meet the fair and equitable test of senior classes which might reject the plan. Nor would such a plan provision meet the "best interests of creditors test" of 11 U.S.C. § 1129(a)(7)(A) if a single senior creditor objected. By providing that class with immediate cash, the plan would not be fair and equitable to other classes with higher priority who are burdened by a holdback provision. The control tactic of this tender offer itself was extremely inequitable. It placed unfair choices upon the debenture holders. It constitutes bad faith. The class of debenture holders had already voted overwhelmingly for the debtor's plan. During the Japonica disclosure hearing in open court, Fidata Trust Company New York ("Fidata"), the indenture trustee, indicated strong opposition to the Japonica plan. Fidata objected to the lower distribution compared to the debtor's plan and the holdback provisions of the Japonica plan. Further, they objected to the distribution of immediate cash to shareholders who were junior to them. It is almost certain that the "fair and equitable" standard on cram down and the best interest *297 of creditors test by a single creditor would be raised at confirmation.
Further, although the tender offer provided the immediate possibility of cash, the total amount of debentures to be purchased, if any, was not disclosed or committed. These creditors had to speculate if Japonica would only purchase a blocking position. Would there be more delay? The tender offer, if included in the plan, would not be adequate disclosure under 11 U.S.C. § 1125. The debenture class was forced to face a real dilemma cash now, but in indefinite amounts, or more delay related to confirmation of the Japonica plan. The debenture holders were coerced into selling their claims. This constitutes bad faith.
B. Purchase of Senior Claims in Class 4.AI.2 and 5.CH.1 by a Proponent
Prior to the close of balloting on June 8, 1990, the insurance companies held approximately 35% of the amount of the claims in Class 4.AI.2 and rejected the Japonica plan. These negative votes precluded the confirmation of the Japonica plan. The Japonica plan offered claimants in Class 4.AI.2 87% of their pre-petition claims. When the holdback provisions are considered, the distribution could be reduced to 70%.
Pursuant to assignment agreements dated June 8, 1990 between the insurance companies and Japonica, Japonica purchased the claims of the insurance companies in Class 4.AI.2 for 93.2% of their pre-petition claim. This price was in excess of 6% more than the highest amount to be distributed under the Japonica plan and in excess of 23% more if the holdbacks are considered. Japonica paid more directly to purchase the claims than offered by their plan. This was a naked attempt to purchase votes.
The insurance companies pursuant to the assignment agreement were required to move for leave to change or withdraw their ballots. The court denied this motion.
On June 8, 1990, after purchasing these claims, Japonica also proposed a modification of their plan as it affects Class 4.AI.2, ostensibly to provide the entire class with the same benefit! This modification proposes to pay 94.86% of the pre-petition debt. Recall that earlier in this case, in March of 1990, during the balloting period on the debtor's plan, Japonica had purchased $31 million of the 7¾ Swiss Franc Notes for 66% of the pre-petition claims. These claimants are in the same class. The modification that Japonica proposes will pay back to Japonica a handsome profit on the claims that it purchased. Japonica has provided no explanation that new capital will be made available from third parties. Japonica intends to use the debtor's existing cash, assets, and debt to fund this modification. This is chutzpah with a vengeance. It is also bad faith.
These facts are close to those in In re P-R Holding Corp., 147 F.2d at 897. In that case, two non-creditors purchased claims to ensure the success of a plan of reorganization beneficial to them. The court held that the purchase of claims "in aid of an interest other than an interest as a creditor . . . may amount to `bad faith'. . . . [C]ertainly there is `bad faith' when those purchases result in a discrimination in favor of the creditors selling their interests." See also In re Featherworks Corp., 36 B.R. 460, 463 (E.D.N.Y.1984) ("The other creditors, all of whom had already voted, were not similarly afforded a chance to convert their claims to immediate cash. . . . [T]he court does not believe that the law countenances vote trafficking and assertedly otherwise innocent self-dealing after the votes have been cast.")
The conduct here is even more offensive than in P-R Holding. Here, the sellers were members of the Creditors' Committee and they owed a fiduciary duty to other class members. The purchasers in P-R Holding offered to forego the benefits of the claims which they had wrongfully acquired and thereby increase the distributions to others. Here, after having committed a wrongful act, Japonica proposes to pay themselves handsomely under an outrageous view of equity. We find bad faith.
C. Japonica Partners as a Proponent of a Plan Sought and Received Inside Information and Should be Treated as a Fiduciary and an Insider
Japonica argues that they are not insiders, as that is defined in 11 U.S.C. *298 § 101(30).[14] It is clear to this court that Congress intended that an insider includes "one who has a sufficiently close relationship with the debtor that his conduct is made subject to closer scrutiny than those dealing at arms length with the debtor." S.Rep. No. 989, 95th Cong., 2d Sess. 25 (1978); H.R.Rep. No. 595, 95th Cong., 1st Sess. 312 (1979), U.S.Code Cong. & Admin. News 1978, pp. 5787, 5810, 6269 (legislative history to 11 U.S.C. § 101(30)).
The rules of construction for the Bankruptcy Code specifically state that the terms "includes" and "including" "are not limiting." 11 U.S.C. § 102(3). The use of the term "insider" at 11 U.S.C. § 101(30) provides an illustrative, rather than an exhaustive list of the persons or entities which may qualify as insiders of the debtor. In re Henderson, 96 B.R. 820, 824-25 (Bankr.E.D.Tenn.1989).
As a proponent, Japonica sought an order of court to conduct "due diligence" which it needed to obtain bank financing to implement its plan. Japonica had complained that the debtor was not cooperative and that the additional data was required to confirm the public information which Japonica already possessed. This due diligence would be accomplished over a period of time as short as seven days. Transcript, January 25, 1990, at 243; Transcript, March 2, 1990, at 16, 101, 103, 105-106, 143.
A very different story was developed at trial. The testimony of F. Ann Ross-Ray, Esq., was clear, definite and compelling. Over a three-month period, from March 16, 1990 to approximately June 11, 1990, Lederman, Paul B. Kazarian, and William Webber, along with their associates, requested and received the full cooperation of the debtor in obtaining information. It is clear that they received a great volume of information that was not available to other creditors, shareholders, and the general public. This delivery of information was voluminous and thorough. This type of information is available only to insiders. At first Japonica dealt only with Ross-Ray; later they grew bolder and went directly to employees to obtain information they desired.
It is true, as Japonica argues, that they did not have actual control or legal decision making power. However, it is also true that they attempted to influence, in not very subtle ways, decisions made by the debtor. This was especially so when they regarded the decisions as important to their possible future administration. For example, they became deeply involved in the debtor's insurance coverage and the disposal of certain assets.
The testimony of Lewis U. Davis, Jr., Esq., was also clear and convincing. The debtor desired to prevent a loss of value to the enterprise and to provide for an orderly transition in the event that Japonica obtained control under Japonica's plan or under the debtor's plan. The debtor cooperated far beyond the requirement of the March 15, 1990 Order.
Davis testified that on or about June 11, 1990, after the insurance claims had been purchased, Lederman, in the name of Japonica, demanded that a principal of Japonica, Paul B. Kazarian, be named chairman of the board of directors of the debtor, and that Lederman, the other principal, be appointed general counsel and chief administrative officer. Lederman further demanded that Milligan be made to resign so that he could be replaced by Webber, Japonica's designee. Japonica caused to be issued press releases announcing that it now controlled the debtor. Under the pretext of performing due diligence, it is clear that Japonica exploited its special access to information, personnel and the premises of the debtor to attempt to assert its influence and control. Japonica's actual behavior was a breach of this court's order and of bankruptcy principles. In addition, it was *299 disquieting, rude, overbearing and disruptive of employee-management relations.
Japonica sought and received inside information as a proponent of a plan. This court finds as a matter of fact that Japonica is an insider and a fiduciary for purpose of this reorganization.
In addition, the banks urge the court to find Japonica to be in violation of the automatic stay. 11 U.S.C. § 362(a)(3). The debtor has promptly remedied these events by denying Japonica's demands, evicting them from the office space at the debtor's headquarters, and limiting their access to information to written requests. Japonica may have also caused employee relationships to be harmed, but those issues are left for another day, should these events contribute to this plan not being consummated.
The following incident is also illustrative of Japonica's new-found arrogance. At a telephone conference on June 21, 1990, after the close of balloting, Japonica refused to make the results of the balloting available to creditors, even though Japonica had promised to do so and even though Japonica had been receiving the daily results from the entity tabulating the ballots. At the confirmation hearing on June 28, 1990, dramatically at 10:00 A.M. the courtroom door opened and the results were revealed. This behavior illustrates the arrogance with which Japonica and their attorneys have treated the court, and it lends credence to the testimony of Davis and Ross-Ray.
The court finds that Japonica has engaged in a pervasive pattern of bad faith designed to control the debtor and manipulate the bankruptcy process. Its actions are a clear violation of the purposes of chapter 11. All of the above actions of Japonica provide this court with ample grounds to impose restraints and sanctions.
D. The Purpose of Chapter 11 Versus Control Profit
A noted commentator suggests that the ultimate intent of bankruptcy is to maximize results for all creditors:
The basic problem that bankruptcy law is designed to handle, both as a normative matter and as a positive matter, is that the system of individual creditor remedies may be bad for the creditors as a group when there are not enough assets to go around. Because creditors have conflicting rights, there is a tendency in their debt-collection efforts to make a bad situation worse. Bankruptcy law responds to this problem.
. . . . .
Bankruptcy provides a way to make these diverse individuals act as one, by imposing a collective and compulsory proceeding on them.
. . . . .
This is the historically recognized purpose of bankruptcy law and perhaps is none too controversial in itself.
T. Jackson, The Logic and Limits of Bankruptcy Law, 10-13 (1986). The purpose of reorganization is to offer an opportunity to maximize results for all creditors and interest holders. Japonica's actions and statements make abundantly clear that it is "control" and "control profit" that they seek. This control profit will not be shared through a reorganization plan with all creditors and all interest holders. A control profit will be shared by only Japonica and their affiliates. Japonica intends to use its newly acquired control to extract economic profit for itself, not to maximize the results for all creditors.
Trading in claims to achieve profits on a specific claim may not be destructive of the reorganization process (a) when both buyer and seller are informed; (b) when the purchaser is willing to hold the claim until distribution; and, (c) when the original claimant does not wish to hold the claim or needs immediate cash. However, the technical provisions of the Code, such as the automatic stay, are designed to achieve the purposes of the reorganization process and to maximize results for all creditors. These provisions are not designed to create delay and pressure claimants to sell. Delay reduces the value of claims. Japonica has deliberately created delay which has improved their ability to buy claims.
*300 The confirmation process enables creditors to modify themselves. The purpose is to increase the pool of value for all creditors and shareholders. Here, Japonica clearly attempts to deprive creditors of the control premium by a manipulation of the reorganization process through the strategic purchase of claims. Acquiring claims with the clear purpose of achieving control of the debtor, thereby earning a control profit, does not maximize the result for all creditors. Such action manipulates the process.
E. The Control Provision
As a result of the negotiations with various constituents prior to the filing of the debtors' plan, the debtor included a provision in the Certificate of Incorporation of Sunbeam/Oster Companies, Inc., that would ensure that any premiums paid to acquire control of the debtor would be shared with all stockholders. See Debtor's Joint Stock Plan of Reorganization, Exhibit A. Many creditors feared that banks would use their position as the largest stockholder to control the reorganized debtor.
The Control Transaction provision, contained in Article Sixth of the Certificate of Incorporation, states that in the event of a Control Transaction any time during the period ending two years after the effective date, any holder of common stock of the corporation may "put" his or her shares to the "Controlling Person" (i.e., demand that the Controlling Person purchase those shares) prior to or within forty-five days after certain notice requirements are met.
A Controlling Person means "any person who has or has the right to acquire, or any group of persons acting in concert for purposes of voting their shares that has or has the right to acquire, voting power over shares of Common Stock of the Corporation that would entitle the holders thereof to cast at least 30% of the votes that all Holders of Common Stock would be entitled to cast in an election of directors. . . ." Id. The definition of Controlling Person excludes inter alia any person who received common stock pursuant to the plan "unless either (x) such person acquires additional shares of Common Stock for the actual purpose of exercising control over the Corporation, or (y) in any event, such person acquires beneficial ownership in excess of 45% of the Common Stock of the Corporation." Id. (emphasis added).
We find that in the event that such shares are "put" to the Controlling Person, the Controlling Person is required to pay to such holder an amount equal to the highest per share price paid in acquiring any share of common stock beneficially owned (after the Effective Date and before the end of the forty-five day period) by the Controlling Person. Thus, any premium price paid for control must also be shared with other stockholders. The consideration to be paid to such holders of common stock who "put" their shares to the Controlling Person shall be in cash or the same form as was previously paid in order to acquire shares of common stock which are beneficially owned by the Controlling Person. The Control Transaction provision further provides that, to the extent shares of common stock beneficially owned by the Controlling Person were acquired as a result of distributions under the plan, such shares will be deemed to have been acquired with cash.
Japonica's objections to these provisions, as a matter of law, have little merit. First, Japonica complains that the warrants to be issued to holders pursuant to the plan are counted for purposes of determining whether a person meets the threshold requirement for being deemed a "Controlling Person." Then Japonica objects that neither the exclusion for shares issued pursuant to the plan of reorganization nor the definition of Control Transaction contains an exception for shares purchased on the exercise of the warrants issued pursuant to the plan. Japonica believes that the exercise of warrants issued for purchase of common stock could give rise to an obligation to allow all other shareholders in the corporation to "put" their shares to a Controlling Person. This is not an accurate interpretation of the Control Transaction provision.
*301 This provision provides that at all times the warrants are to be counted for the purposes of determining whether a person is a Controlling Person. However, once the warrants have been exercised, they do not exist and the new stock is counted in the place of the previous warrants. For example, if a stock and warrant holder is determined to own 29% of the company, 9% of which is in the form of warrants and later such person exercises all 9% of those warrants to purchase shares of common stock, such shares of common stock would be counted in the place of the warrants and that person would continue to be viewed as owning 29% of the company.
Japonica also objects that "[t]he Control Transaction provisions may result in different treatment for creditors in the same class," in violation of 11 U.S.C. § 1123(a)(4). There is nothing in the Control Transaction provision that will result in different treatment to creditors within the same class. Japonica uses the example of a creditor in Class 7.AI.1 who holds significant claims in that class as well as claims in other classes, so that the creditor holds warrants and stock sufficient to meet the threshold for causing such person to be deemed to be a Controlling Person. It should be noted that at the time of the hearing on the debtor's disclosure statement in January 1990, and at the end of balloting, there was no creditor that would have received, under the provision in which shares and warrants were to be counted, beneficial ownership in excess of 45% of the common stock of the corporation. Since that time, Japonica has voluntarily purchased claims in various classes which are to receive stock and warrants.
Japonica also objects, at ¶¶ 23-24 of their supplemental objections, to the effect that the Control Transaction provision would have on holders of claims in Class 2.AI.2, the Allegheny Secured Bank Claims. Evidently at the time this objection was raised, Japonica knew that when it completed its plan to purchase claims, it would have acquired a significant amount of claims in Class 7.AI.1 which, after distribution, would be counted with Japonica's holdings at Class 2.AI.2 and Class 4.AI.2, the Allegheny Senior Unsecured Claims. It is clear that Japonica understood and correctly feared the effect that the Control Transaction provision would have on their attempt to control the debtor by this means. The court and other creditors did not appreciate Japonica's concern because they did not know of Japonica's intent. These objections raised by Japonica to the Control Transaction provision are not well-founded.
Actually, Japonica objected to the debtor's plan before it had purchased enough claims to trigger the Control Transaction provision. It appears that its intent to breach that provision may have been long formed. From written and oral objections at the hearing on the debtor's disclosure statement, it is clear that Japonica knew of the intent of these provisions in advance of their claims purchases and accepted the risk that these control provisions could be applied to them.
Japonica has indicated it will not observe the control provisions of the debtor's plan. The banks ask that those provisions be enforced. This court believes it is appropriate to enforce the control provision for at least three reasons. First, because the court believes that the provisions are enforceable under both Pennsylvania and Delaware law; second, because they are separately enforceable as part of the debtor's plan of reorganization which has been approved by the requisite classes; and, third and most important, Japonica's inequitable and bad faith behavior, found above, requires that the intent and substance of these control provisions be enforced as a sanction upon Japonica.
The court intends to mold an injunction to carry out the intent of these control transaction provisions on Japonica by at least denying Japonica's right to vote their shares, unless forty-five days from the date of this confirmation order, Japonica indicates the ability and the agreement to accept the "puts."
F. Section 105 and the Inherent Powers of a Bankruptcy Court Provide the Necessary Power to Grant Orders for Appropriate Relief
Justice Douglas wrote eloquently about the equity powers of a bankruptcy court:
*302 `A court of equity may . . . in the exercise of the jurisdiction committed to it grant or deny relief upon performance of a condition which will safeguard the public interest.' . . . These principles are a part of the control which the court has over the whole process of formulation and approval of plans of composition or reorganization. . . . The responsibility of the court entails scrutiny of the circumstances surrounding the acceptances, the special or ulterior motives which may have induced them, the time of acquiring the claims so voting, the amount paid therefor, and the like.
. . . . .
Where such investigation discloses the existence of unfair dealing, a breach of fiduciary obligations, profiting from a trust, special benefits for the reorganizers, or the need for protection of investors against an inside few, or of one class of investors from the encroachments of another, the court has ample power to adjust the remedy to meet the need. The requirement of full, unequivocal disclosure; the limitation of the vote to the amount paid for the securities (citation omitted); the separate classification of claimants (citation omitted); the complete subordination of some claims (citations omitted), indicate the range and type of the power which a court of bankruptcy may exercise in these proceedings. That power is ample for the exigencies of varying situations. It is not dependent on express statutory provisions. It inheres in the jurisdiction of a court of bankruptcy.
American United Mut. Life Ins. Co. v. City of Avon Park, 311 U.S. 138, 145-46, 61 S.Ct. 157, 161-62, 85 L.Ed. 91 (emphasis added) (quoting Securities and Exchange Commission v. United States Realty & Improvement Co., 310 U.S. 434, 455, 60 S.Ct. 1044, 1053, 84 L.Ed. 1293 (1940)); see also Young v. Higbee Co., 324 U.S. 204, 214, 65 S.Ct. 594, 599-600, 89 L.Ed. 890 (1945) ("Courts of bankruptcy are courts of equity and exercise all equitable powers unless prohibited by the Bankruptcy Act."); Pepper v. Litton, 308 U.S. 295, 307-08, 60 S.Ct. 238, 245-46, 84 L.Ed. 281 (1939) ("In the exercise of its equitable jurisdiction the bankruptcy court has the power to sift the circumstances surrounding any claim to see that injustice or unfairness is not done in administration of the bankrupt estate.") Bankruptcy courts may "look through the form to the substances of any particular transaction and may contrive new remedies where those in law are inadequate." State of Ohio v. Collins (In re Madeline Marie Nursing Homes), 694 F.2d 433, 436 (6th Cir.1982) (quoting 1 Collier on Bankruptcy, ¶ 2.09 (14th ed. 1974)). Thus, the court faced with the unusual situation in this case has "ample power" to formulate appropriate remedies.
The court's equity powers are codified at section 105 of the Bankruptcy Code, 11 U.S.C. § 105. That section empowers the court to "issue any order, process, or judgment necessary or appropriate to carry out the provisions of" the Bankruptcy Code and is an extremely broad grant of authority to do what is necessary to aid its jurisdiction over a bankruptcy case. 2 Collier on Bankruptcy ¶ 105.02 (15th ed. 1981).
For example, in In re Gaslight Club, Inc., 782 F.2d 767, 770 (7th Cir.1986), the court recognized that section 105's grant of power included "considerable authority to interfere with the management of a debtor corporation in order to protect the creditors' interests." Numerous other decisions are in accord. In In re Lifeguard Indus., Inc., 37 B.R. 3, 17-18 (Bankr.S.D.Ohio 1983), the court, upon finding that "best interests of creditors" would not be served by allowing a new slate of officers who were inexperienced to take over day-to-day operations, ordered the board of directors not to interfere with existing management.
In In re Alrac Corp., 1 Bankr.Ct.Dec. 1504 (CRR) (Bankr.D.Conn.1975), a case under the former Bankruptcy Act, the court enjoined stockholders from calling an annual meeting pending consummation of a plan. The plan provided for the issuance of new common shares to creditors, who would then be able to elect new directors. The annual meeting had "the potential of possible interference with consummation of *303 the arrangement if an administration `unfriendly' to the creditors were installed. This would clearly be inconsistent with the program envisioned in the plan and accepted by creditors and should be restrained." Id. at 1506. In the instant case, the creditors did not vote for a plan that would defeat the control provision and impose minority status upon them.
In In re Johns-Manville Corp., 66 B.R. 517 (Bankr.S.D.N.Y.1986), the bankruptcy court enjoined a suit by the equity committee in Delaware state court to compel a shareholders' meeting at which new directors would be elected. The equity committee members had envisioned the election of new directors who would oppose a consensual reorganization plan that had been developed. The court adhered to this result upon remand from the Second Circuit, which had held that because of the importance of the right to a shareholders' meeting to elect new directors under state law, that right could only be overridden by a "showing of clear abuse" and irreparable injury. In re Johns-Manville Corp., 801 F.2d 60, 64 (2d Cir.1986). Such abuse by Japonica has been shown in the findings of the court outlined above.
Moreover, in Johns-Manville Corp., the need to appoint a trustee or to liquidate in chapter 7, with disastrous consequences, loomed as distinct possibilities. Id. at 537-39. That is a possible consequence in this case also.
In addition, bankruptcy courts have used their equitable powers under section 105 to "assure the orderly conduct of the reorganization proceedings," In re Baldwin-United Corp. Litigation, 765 F.2d 343, 348 (2d Cir.1985); to prevent activities which would delay or thwart efforts to reorganize the debtor, A.H. Robins Co. v. Piccinin, 788 F.2d 994, 1008 (4th Cir.1986), cert. denied, 479 U.S. 876, 107 S.Ct. 251, 93 L.Ed.2d 177 (1986); and to block actions which tend to "defeat or impair its jurisdiction." In re Wingspread Corp., 92 B.R. 87, 92 (Bankr.S.D.N.Y.1988).
Equitable relief under section 105 also is appropriate to prevent "end runs" on the bankruptcy process. For example, the "power to enjoin assures that a creditor may not do indirectly that which he is forbidden to do directly." In re Otero Mills, Inc., 21 B.R. 777, 778 (Bankr.D.N. M.), aff'd, 25 B.R. 1018 (D.N.M.1982). Japonica has done indirectly what they could not do directly.
Japonica has interfered with management and attempted to seize control of the debtor. Japonica has abused and manipulated the bankruptcy process. Japonica has unilaterally resorted to out-of-court measures to impose its will upon the debtor and creditors in a manner not permitted by the Code. Japonica's actions are a grave threat to the prospect of prompt and successful reorganization.
This court is compelled by the facts and by the purpose of bankruptcy reorganization and the law to grant equitable relief in the instant case. Historically, in response to this kind of conduct, bankruptcy courts have granted a wide range of relief. However, in the use of this broad power, this court will exercise only such power as will accomplish the objective of the reorganization consistent with the intended provisions of the plan and disclosure statement and on the basis on which the plan was accepted.
Shares to be distributed to Japonica or their affiliates shall be held in trust by the debtor and shall not be entitled to vote on any matter while in trust or owned by Japonica. Japonica, however, may enjoy the other benefits of ownership, such as dividends and proceeds from sale. If, within 45 days from the date of this order, and subject to approval by this court, Japonica establishes with the debtor that it has the ability to respond to puts from all other shareholders and warrant holders at $7.00 per share and $1.53 per warrant, then the debtor and Japonica are to facilitate the purchase transaction and an orderly change in control. If, within 45 days, Japonica does not agree, or does not establish its ability to accept the put of shares and warrants, then the trust of its shares shall continue for three years. Japonica may choose to continue to own the shares or may set in motion with the cooperation of the reorganized debtor and the consent of *304 this court an orderly sale of such shares to parties who consent to the Control Transaction provision.
The remedies this court has selected do not deny at this time the bargain Japonica may have achieved on its trading in claims. The remedies are designed to deny control and the control profit through the denial of the voting power of those shares.
III. VALUATION AND CRAMDOWN
The equity holders in this case consist of three classes, which follow in the order of priority: Class 8.AI.1, the $2.19 preference shares; Class 8.AI.2, the $11.25 preferred shares; and, Class 9.AI.1, the common shares. Under the plan of reorganization, all three classes are impaired. Those classes are to receive warrants.[15] Class 8.AI.1 and Class 9.AI.1 accepted the plan; Class 8.AI.2 rejected the plan.
Section 1129(b) of the Bankruptcy Code, 11 U.S.C. § 1129(b), empowers the court to confirm a plan of reorganization, notwithstanding the nonacceptance of the plan by one or more classes of creditors or interest holders. In bankruptcy jurisprudence, this process is known as "cramdown." To cram down a plan on a dissenting class, the court must determine that "the plan does not discriminate unfairly, and is fair and equitable, with respect to each class of claims or interests that is impaired under, and has not accepted, the plan." 11 U.S.C. § 1129(b)(1). With respect to a dissenting class of interests, a plan is fair and equitable if the following requirements are satisfied:
(i) the plan provides that each holder of an interest of such class receive or retain on account of such interest property of a value, as of the effective date of the plan, equal to the greatest of the allowed amount of any fixed liquidation preference to which such holder is entitled, any fixed redemption price to which such holder is entitled, or the value of such interest; or
(ii) the holder of any interest that is junior to the interests of such class will not receive or retain under the plan on account of such junior interest any property.
11 U.S.C. § 1129(b)(2)(C). Paragraph (ii) of the above quoted section is a restatement of the absolute priority rule.
Because Class 8.AI.2, the preferred shares, was the only nonaccepting class of interests, that class "must receive the reorganization `value of their interest,' or junior interests must be cancelled." 5 Collier on Bankruptcy ¶ 1129.03[4][e] (15th ed. 1989). To determine whether Class 8.AI.2 may be forced to accept the plan and to determine whether Class 8.AI.2 has received a proper distribution as the value for their interest before Class 9.AI.1 can participate in the distribution, the court must determine the value of the securities to be issued.
A. Valuation
The court heard extensive testimony on valuation as part of the confirmation hearings. The debtor directed its financial advisor, Smith Barney, Harris, Upham & Co. ("Smith Barney") to prepare a valuation of the reorganization securities. Smith Barney also prepared, at the direction of the debtor, a valuation analysis of the debtor's operating businesses to be used in a liquidation analysis. A summary of this valuation appears in the debtor's disclosure statement. Smith Barney estimated that the enterprise value of the debtor ranged from $510 million to $570 million and the liquidation value of the operating businesses *305 ranged from $510 million to $550 million. The resultant values of the reorganization shares were $6.33 to $7 per share of the new common stock and zero to $1.53 for the warrants.
At the confirmation hearing, Robert C. Martin, the Managing Director of the Financial Restructuring Group at Smith Barney, testified for the debtor about the valuation process his firm conducted.[16] Martin testified that Smith Barney, inter alia, reviewed public financial statements, analyzed financial and operating data, prepared discounted cash flow analyses, analyzed individual operating businesses, considered comparable companies that were publicly traded, considered comparable mergers and acquisitions, considered economic and industry data, interviewed senior management, reviewed the stock plan, and performed various other analyses. In addition, Smith Barney considered the results of the extensive solicitation of prospective purchasers of the debtor's businesses, which occurred in August 1988. Smith Barney had conducted that solicitation process and thus was intimately familiar with it.
Smith Barney calculated the net income valuation by taking the debtor's projected net income for the next three years, applying an "appropriate" predetermined multiplier, reducing the results to present values as of March 31, 1990, and dividing by the number of shares to be issued to arrive at the price range per share.
As part of its analysis, Smith Barney thoroughly reviewed six other appliance companies which it considered to be comparable to the debtor. As a part of its analysis, Smith Barney determined the appropriate multiples based on market capitalization and based on adjusted market value. For market capitalization, the multiple was the price-earnings ratio, which ranged from 10.2 to 13.3. For the adjusted market value, the range of multiples for earnings before interest and taxes ("EBIT") was 5.0 to 14.4; the range of multiples for earnings before interest, taxes, depreciation, and amortization ("EBITDA") was 4.6 to 9.7.
Martin further testified that the appropriate multiple for the net income valuation, based on the multiples for the comparable companies and other factors, was 11.5, which was approximately the mid-point for the comparable companies. Based on the debtor issuing 45 million shares of stock,[17] Smith Barney determined the net income valuation by multiplying the projected earnings for 1991, 1992, and 1993 ($40.8 million, $49.6 million, and $59.5 million, respectively) by 11.5. The product of that calculation was $469.2 million for 1991, $570.4 million for 1992, and $685.4 million for 1993. Those amounts were then reduced to their present value as of March 31, 1990. Smith Barney thought it appropriate to apply a discount factor because of the following factors: the debtor was in a turnaround situation that involved certain unique risks, the debtor had used aggressive projections of sales and income and there were risks of failing to meet such projections, the debtor had failed to meet past projections, the risk the market would apply to securities of an appliance manufacturer emerging from bankruptcy, the return that investors seek for such risk, the return investors may receive in other turnaround situations, the return on leveraged buy-outs, and the possibility that the stock may not be well received in the marketplace. In light of all of these special factors, Smith Barney determined that the appropriate discount rate to determine present value was 25% or 30%. When this rate was applied, it resulted in the stock having a range of value from $5.73 to $7.32.
Martin testified that Smith Barney also performed the above analysis for earnings before interest and taxes. Smith Barney used a multiple of 7.5; the range of multiples for comparable companies was 5.0 to 9.4. Using the same discount factor, the price per share ranged from $6.44 to $7.81.
*306 The debtor also adduced the testimony of John Mueller, a vice president of Whitman, Heffernan, Rhein & Co. ("Whitman Heffernan"), the former investment banker for the Equity Committee.[18] Mueller testified that he carefully reviewed the methodology of Smith Barney, opined that the procedures Smith Barney used were proper, and concurred with Smith Barney's valuation.
James Burroughs, a vice president and the manager of the Industrial Organization Group of Charles River Associates ("CRA"), the Equity Committee's current investment banker, and Peter Butler, senior financial consultant to CRA, testified for the Equity Committee. Burroughs testified that CRA valued the debtor by using a discounted cash flow analysis, and that such analysis resulted in a valuation between $723.5 million and $793.2 million. Burroughs testified that the discounted cash flow analysis involves three components: forecasting the cash flow of the debtor for a reasonable period; determining the cash flow for the "residual" or "terminal" value the point after the projection period when it is assumed that no further changes will occur; and, selecting an appropriate discount rate. CRA's calculations were based on the debtor's forecasts of cash that were set forth in the disclosure statement. Both experts used the debtor's projections as shown on the disclosure statement. Burroughs believed that the discounted cash flow method was the superior method of valuation because the only source of value of an asset to its owner is the cash that the owner can attain from that asset.
Butler's testimony involved further criticism of Smith Barney's methods. He opined that earnings before interest, taxes, depreciation and amortization was a superior method to earnings before interest and taxes. He further opined that Smith Barney undervalued certain non-operating losses and the debtor's foreign subsidiaries. This later criticism did not appear to be well founded.
There is economic authority to support the valuation methods of Smith Barney and CRA. The court qualified both Martin and Burroughs as expert witnesses, and found them both credible. Moreover, the basic approaches of Smith Barney and CRA were more alike than dissimilar. However, the court adopts the valuation of Smith Barney. There was a major weakness in CRA's analysis. To reach the conclusion that the reorganization stock would trade at $12 per share, Burroughs used a discount rate for present value of only 13.4%. Burroughs did not fully consider the possibility that the debtor would fail to meet its forecasts. Further, they made no provision for the market attaching a speculative quality to the debtor's ability to achieve its projections. It is undisputed that the debtor has consistently failed to meet its projections prior to and since the filing of bankruptcy. Burroughs theorized and presented some evidence that the new reorganized stock would perform better than the market. Burroughs used a "beta" value, the measure of the riskiness of the enterprise being valued relative to the stock market as a whole,[19] of .73 to 1.07, depending on the year. CRA determined the beta for the debtor by examining the betas of the companies which it considered comparable. However, CRA failed to establish that the beta values upon which it relied would be applicable to the debtor's projections. The factors it utilized were the actual results of companies which were successful. The uncertainty of a successful turnaround is still present.
B. Cram Down and Exclusion of Equity Holders from the Management of the Reorganized Debtor
Based on Smith Barney's valuation, there is insufficient value for distribution to all of the equity interests. At the time the *307 disclosure statement was approved, claims against the estate were over $722 million. The debtor has since reduced claims to approximately $711 million and continues to reduce the claims through negotiation or litigation. Even so, Smith Barney has estimated the value of the debtor as $510 million to $570 million. Therefore, there is insufficient value to satisfy all creditors and interest holders. Under the absolute priority rule, Class 9.AI.1 would not be entitled to a distribution. The plan could be crammed down by diverting the value intended for Class 9.AI.1 to Class 8.AI.2.
In light of Smith Barney's valuation and the amount of outstanding claims, a cramdown on any class of equity appears to be an academic discussion. There is insufficient present value to satisfy all claims of creditors. The class of creditors with the lowest priority, Class 7.AI.1, will receive part of its distribution in warrants, which, as Smith Barney concedes, may have zero value. However, Smith Barney's (and CRA's) valuation did not value the bank litigation. The Equity Committee is a party to that action and shareholders could potentially benefit. The plan of reorganization proposes and requires the settlement of that litigation. One of the reasons the equity classes were offered warrants was to reduce all litigation. It is clear that absent the bank litigation there would be no value to distribute to equity. As a quid pro quo for settling that suit and for reducing litigation, interest holders were offered warrants. Pursuant to a simple cram down, Class 9.AI.1 is not entitled to any distribution. However, Class 9.AI.1 is entitled to receive warrants, in return for the settlement of the bank litigation.
Among their objections to confirmation of the plan, the Equity Committee complains that various provisions of the plan of reorganization violate 11 U.S.C. § 1123(a)(7). That provision provides that the plan of reorganization "contain only provisions that are consistent with the interests of creditors and equity security holders and with public policy with respect to the manner of selection of any officer, director, or trustee under the plan and any successor. . . ." As discussed at length above, there is insufficient enterprise value to allow a distribution to the equity holders, other than the warrants. Because present equity holders will not obtain stock in the reorganized debtor, it is not unfair to exclude present equity holders from selecting directors of the reorganized debtor or participating in the committee overseeing the reorganized debtor. When their warrants are exercised for shares, they will receive appropriate rights as shareholders.
IV. OTHER OBJECTIONS TO CONFIRMATION
The plan of reorganization proposes, inter alia, to settle the adversary action by the Creditors' Committee and Equity Committee against the secured bank lenders, at Adversary No. 88-186. The Equity Committee objects to the settlement.
The Equity Committee also objects to the payment of interest to creditors in Class 5.SB.7. In a related matter, Cowen & Company ("Cowen") and Amroc Investments, L.P. ("Amroc") object to the nonpayment of interest to creditors in Classes 5.SB.1 and 5.AL.1.
The court must also respond, in the context of an objection to confirmation, to the matters raised by Japonica and the Equity Committee in their motions to designate.
Finally, Elliott Associates, L.P. ("Elliott") objects to its treatment under the plan of reorganization. The court will address these issues seriatim.
A. Specific Findings of Fact and Conclusions of Law On the Settlement of Adversary Proceeding No. 88-0186 and Its Inclusion in the Debtor's Plan
1. History of the Litigation
Immediately following the first petitions for relief in February 1988, AI, in the exercise of its business judgment, entered into an Adequate Protection Agreement with the consortium of 26 banks who were the debtor's pre-petition lenders (the *308 "banks").[20] In the agreement, AI agreed not to commence any action against the banks and recognized that the banks' liens were valid. This court approved the agreement and in a Memorandum Opinion dated March 11, 1988 expressly permitted AI to recognize the validity of the banks' liens, without prejudice to the rights of other constituents to raise and contest the validity of these liens. In May 1988, the Creditors' Committee commenced an action containing eleven counts on behalf of AI against the banks, at Adversary No. 88-186.
The complaint alleges that the banks are liable to AI for (i) fraudulent transfers under state and federal law, (ii) preferential transfers to alleged insiders, (iii) equitable subordination, and (iv) breach of a duty to act in good faith and deal fairly. The relief sought includes (a) return of $400 million paid to the banks prior to the bankruptcy filing; (b) invalidation or subordination of the banks' remaining liens which collateralize the approximately $220 million remaining to be paid; (c) punitive damages of $880 million; (d) return of a $500,000 fee paid to the banks in December 1986 in connection with the postponement of the due date of a periodic payment; (e) return of other fees and reimbursement for interest, costs and counsel fees; and, (f) such other relief as the bankruptcy court deems appropriate.
The banks have denied the allegations of the complaint, and asserted various affirmative defenses. Upon the motion of the Equity Committee, this court granted the Equity Committee the right to intervene, but only with respect to Counts X and XI. Official Committee of Unsecured Creditors of Allegheny International, Inc. v. Mellon, Bank, N.A. (In re Allegheny International, Inc.), 93 B.R. 903 (Bankr.W. D.Pa.1988), rev'd in part, 107 B.R. 518 (W.D.Pa.1989). On appeal, the district court on November 15, 1989 granted the Equity Committee the general right to intervene on all counts. The banks have appealed the intervention order. The Equity Committee did not file a separate complaint but adopted the pleadings of the complaint as filed by the Creditors' Committee and has not sought to amend or supplement those pleadings.
Very early in this case the court recognized that this litigation would have a crucial role in the bargaining related to any plan of reorganization. When the debtors decided not to pursue these causes of action, this court invited the Creditors' Committee to pursue them. Even so, this court has held that the causes of action asserted in this complaint are derivative in nature. Id. On July 12, 1988 the banks successfully moved to compel joinder of the debtor as a party defendant. This court said, "[b]ecause we view this case as a derivative action, we will grant the Mellon group's motion to compel joinder." Id. at 905. It is not disputed that a derivative action is a suit to enforce a corporate cause of action. See also Price v. Gurney, 324 U.S. 100, 105, 65 S.Ct. 513, 516, 89 L.Ed. 776 (1945). After October of 1988, the parties have not disputed the derivative nature of the complaint in the bankruptcy court.
On October 10, 1989, the banks moved for partial judgment on the pleadings and for partial summary judgment dismissing Counts X and XI. Those counts assert theories of equitable subordination and breach of duty of good faith and fair dealing, respectively. The banks argue that Count X should be dismissed as to the Equity Committee as a matter of law because 11 U.S.C. § 510(c) does not permit the subordination of a creditor's claim to an equity holder's interest. The banks further argue that both Counts X and XI are insufficient as a matter of law and on the facts and should be dismissed.[21]
2. The Settlement
After many months of extensive discovery and negotiations, a settlement of the litigation has been proposed as an integral *309 part of the debtor's plan (and as a part of the rival Japonica plan). The negotiations were conducted between the Creditors' Committee, which was advised by its special counsel and regular counsel, and the banks and their counsel. The negotiating parties had the benefit of input from the debtor and debtor's counsel regarding a range of settlement terms. However, the Equity Committee does not join in the settlement. Because this litigation has been clearly adversarial, the court is satisfied that the negotiations were conducted entirely at arm's length.
The settlement provides for (1) the litigation to be dismissed with prejudice, (2) the debtor to indemnify the banks to the extent of $3 million for claims arising out of or relating to the loan transactions, and (3) the delivery by AI to the banks of a general release. In return, the banks have agreed to forego the following claims: (a) approximately $39 million of their $57 million claim for post-petition interest accrued as of February 28, 1990; (b) all post-petition interest accruing thereafter at a rate of approximately $2 million per month; and, (c) all costs of defense for this action, for which they would otherwise seek payment pursuant to the terms of their credit agreements with AI.
It is clear that this settlement is an integral part of the debtor's plan of reorganization. Consummation of the settlement is conditioned upon confirmation of the plan, and similarly, confirmation of the plan is a condition upon consummation of the settlement.
The proposed settlement includes the following benefits: (1) significant monetary concessions by the banks; (2) the elimination of substantial expenses to the estate that otherwise would be incurred if the litigation continued through trial and subsequent appeals; (3) the elimination of the risk of a verdict unfavorable to plaintiffs if the litigation should proceed to trial; (4) the substantial limitation of claims by the banks for post-petition interest and litigation fees if they are successful in their defense; and (5) the ability to proceed with the reorganization without the risk of delay arising from the litigation.
The settlement has the support of the debtor, the Creditors' Committee and the banks. It is very significant that the class of common stockholders, 9.AI.1, and the preferred stock class, 8.AI.1, have voted in favor of the plan, thereby signifying their approval of the settlement as well. One of the classes of preferred stock, Class 8.AI.1, voted 58% in favor, although this does not constitute acceptance under 11 U.S.C. § 1126(c). Absent bankruptcy, a simple majority of a class has some weight.
It is clear to the court that this settlement is of great benefit to the estate, the creditors, and equity holders.
3. Standards for Approval of Settlement in Bankruptcy
The Bankruptcy Code, 11 U.S.C. § 1129(a)(1), provides that a plan may be confirmed only if it complies with the provisions of Title 11. A plan may provide for compromise of litigation. 11 U.S.C. § 1123(b)(3)(A). Even when an impaired class of claims or interests does not accept the plan, the court may approve the settlement and the plan if the court determines that the plan is fair and equitable to those impaired classes. 11 U.S.C. § 1129(b)(1).
This court has discretion to approve a settlement as part of a reorganization plan. Even so, there are limits to a court's discretion in approving a settlement. This court is guided by the case law which teaches that a compromise should be approved if it is fair and equitable. Protective Committee for Independent Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424, 88 S.Ct. 1157, 1163, 20 L.Ed.2d 1 (1968); In re AWECO, Inc., 725 F.2d 293, 298 (5th Cir.), cert. denied, 469 U.S. 880, 105 S.Ct. 244, 83 L.Ed.2d 182 (1984); In re Texaco, Inc., 84 B.R. 893, 901 (Bank.S.D.N.Y.1988). The court must reach an "informed, independent judgment" supported by the factual background underlying the litigation and bankruptcy. Texaco, 84 B.R. at 901.
The courts that have addressed this problem are in substantial agreement as to the *310 factors a bankruptcy judge must consider in evaluating a settlement. As stated in In re Grant Broadcasting of Philadelphia, Inc., 71 B.R. 390, 395 (Bankr.E.D.Pa.1987), the factors are "(a) [t]he probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; (d) the paramount interest of the creditors and a proper deference to their reasonable views. . . ." See also In re American Reserve Corp., 841 F.2d 159, 161 (7th Cir. 1987); In re A & C Properties, 784 F.2d 1377, 1382 (9th Cir.1986), cert. denied, 479 U.S. 854, 107 S.Ct. 189, 93 L.Ed.2d 122 (1986); In re Energy Cooperative, 886 F.2d 921, 927 (7th Cir.1989). A further consideration, enunciated by the Supreme Court in TMT Trailer is "the need to compare the terms of the compromise with the likely rewards of litigation." 390 U.S. at 425, 88 S.Ct. at 1163.
The court in In re Texaco followed TMT Trailer when it confirmed a reorganization plan providing for compromise of a judgment in excess of $11 billion. The Texaco decision sets forth the following criteria to be considered:
1. The balance between the likelihood of plaintiff's or defendant's success should the case go to trial vis-a-vis the concrete present and future benefits held forth by the settlement without the expense and delay of a trial and subsequent appellate procedures.
2. The prospect of complex and protracted litigation if the settlement is not approved.
3. The proportion of the class members who do not object or who affirmatively support the proposed settlement.
4. The competency and experience of counsel who support the settlement.
5. The relative benefits to be received by individuals or groups within the class.
6. The nature and breadth of releases to be obtained by the directors and officers as a result of the settlement.
7. The extent to which the settlement is truly the product of arms-length bargaining, and not of fraud or collusion.
Texaco, 84 B.R. at 902.
In order to apply the factors outlined above, this court analyzed the necessary factual background as developed (a) from the proposed findings of fact and conclusions of law of the banks, the Creditors' Committee and the Equity Committee, (b) from a review of the written discovery, documents, depositions of proposed witnesses and similar discovery materials, (c) from the representation of attorneys who investigated the facts, and (d) from argument of attorneys concerning those legal issues. Finally, the court considered the likelihood of success of proving these facts and establishing the legal issues.
This court has read and studied the proposed findings of facts and conclusions of law submitted by the litigants many times. It would not add to the analysis for this court to evaluate in writing each of the disputed facts and conclusions of law. Each count would require a lengthy written analysis. However, the court did evaluate the ease or difficulty of establishing disputed facts, and it did consider the facts proposed as favorable as possible to the party urging such a fact when considering the applicable law. The court is reminded that it is a settlement that is before the court and that a simple majority of the parties involved in the dispute have favored the settlement. In fact, except for one class of preferred, a two-thirds majority has favored the settlement as part of the confirmation of the plan. The burden is on the objecting party to demonstrate that this law suit would provide more than the plan proposes and more than in a chapter 7. To do so, the objecting party must demonstrate the value of the law suit. They have not convinced the court of such value.
In considering the fairness and reasonableness of such a settlement, this court is not required to perform an exact valuation of each issue. The court is not required to conduct a mini trial of the facts. The appellate courts have not required the use of a rigid mathematical formula *311 to set dollar values. To do so "would create an illusion of certainty where none exists and place an impracticable burden on the whole . . . [settlement] process." In re Energy Cooperative, 886 F.2d at 929, (quoting Group of Institutional Investors v. Chicago, Milwaukee, St. Paul & Pacific R.R. Co., 318 U.S. 523, 565-66, 63 S.Ct. 727, 749-50, 87 L.Ed. 959 (1943)).
The cases teach us that this court must determine "whether or not the terms of the proposed compromise fall within the reasonable range of litigation possibilities." Texaco, 84 B.R. at 902 (quoting In re New York, New Haven & Hartford R. Co., 632 F.2d 955, 960 (2d Cir.1980), cert. denied, 449 U.S. 1062, 101 S.Ct. 786, 66 L.Ed.2d 605 (1980)). The court concludes that the compromise between the banks and the Creditors' Committee representing AI's interests falls within that reasonable range and is fair.
4. Summary of Historical Facts From Early 1972 Through 1986
In the 1970's, AI pursued a strategy of acquisition of consumer products and high technology industrial products and divestiture of the cyclical, labor-capital intensive steel business. In about 1982 AI found itself with a very high level of debt and low profits. It had acquired many operational inefficiencies. AI believed those were due to the number of disparate businesses it owned, high overhead, and a high level of preferred dividends. Between 1982 and 1986, AI carried out a number of divestitures. However, the funds obtained were not used for reducing debt. The cash was used to pay interest expenses and preferred and common dividends. The debtor attempted to retire this expensive preferred stock through purchases largely financed by bank borrowing. During 1984 and 1985, AI individually and separately negotiated lines of credit with many domestic and foreign banks and other lenders.
In October 1985 when the debtor took a write down of approximately $75 million from losses related to real estate and oil and gas investments, the lending parties became alarmed. The public press commented fully on many of the debtor's poor management practices. The sophisticated financial community became aware of AI's problems.
In the fall of 1985, the debtor undertook a review of its activities and hired Merrill-Lynch to study and recommend improvements. Project Keystone resulted. Thereafter the debtor decided to focus on certain "core" businesses centered around consumer products and to divest various other businesses. The evidence offered is convincing that this strategy was not unduly influenced by the banks.
As part of this restructuring, the debtor desired to change from the separate uncommitted short term financing to more committed financing. In October of 1986, the debtor requested that Mellon Bank investigate creating a committed multi-bank lender facility. Following necessary negotiating and business forecasting, the debtor and the banks entered into two revolving credit facilities, a short term one-year facility and a long term two-year facility (collectively referred to as the "loan revolver agreements"). Those agreements are at the center of this dispute.
The previous individual loans were unsecured. The amount of these borrowings was approximately $602 million. As a result of the above negotiations, the banks obtained concessions from the debtor in the form of a pledge of the stock of all of the operating subsidiaries. The agreements also gave the banks rights over certain aspects of the debtor's business and the right to be paid from the divestiture.
During the negotiations, the president of Mellon, George F. Farrell, was a member of the Board of Directors of AI. Mellon acted as the agent for the other banks and led the negotiations. On these facts, this court would easily find that it was clearly inappropriate for Farrell to serve on the debtor's board. Robert F. Buckley, CEO of the debtor, had also served on Mellon's board.
The new loan revolver agreements were tightly drawn. It is clear that the banks had become aware of, and concerned about, the debtor's financial distress and operational losses. It is also true that the debtor *312 did not achieve its own goals for the remaining core operations which it intended to retain. The debtor conducted the divestitures under pressure to comply with the revolving loan agreements. The plaintiffs attack some of those divestitures as resulting in fire sale prices. Those facts will be difficult to prove at trial.
It will also be difficult for the plaintiffs to prove that the banks planned, originated, and implemented this scheme as a deliberate effort to disadvantage the other creditors, shareholders, and the debtor. The debtor could have chosen another course of action. The debtor's counsel warned the debtor of the legal pitfalls of the revolver loan agreements.
As of the filing of the debtor's petition in February 1988, the bank debt had been reduced from $602 million to $221 million. Moreover, it is also clear that the banks improved their position by obtaining collateral. The priority position of a secured creditor provides the banks with a definite advantage in a bankruptcy distribution and outside of bankruptcy. This settlement significantly diminishes that advantage.
The plaintiffs' ability to recover under several of the causes of action is dependent on the disputed fact of the debtor's solvency. The plaintiffs believe they can establish insolvency as of May of 1986. The result of such an attempt is uncertain. In support of this assertion, the court notes that in March of 1987 First Boston Corporation announced a tender offer of $24.60 for common shares, $20.00 per share for the $2.19 preference shares and $87.50 for the $11.25 preferred shares.[22] Factual and legal evidence of insolvency will be a difficult issue to establish.
The issue of equitable subordination is also risky for the plaintiff. The plain language of 11 U.S.C. § 510(c)[23] does not support the Equity Committee's legal position and makes them dependent on common law doctrines. The doctrine of subordination is remedial, not penal, and is applied only to the extent necessary to offset specific harm caused by inequitable conduct. This court believes that the alleged inequitable conduct is largely comprised of the banks' superior knowledge because of a possible breach by Farrell of his duty as a fiduciary. The court views the evidence offered on the issue of deliberately harmful conduct as not convincing. The court also views the debtor's historically poor performance as a significant factor in this matter. It is clear that the banks improved their position. The remedy of holding the banks as unsecured creditors and denying interest to the banks would be appropriate. That is largely what this settlement accomplishes.
The Equity Committee asserts in Count XI that the banks are liable for Farrell's and Mellon's tortious conduct. The Equity Committee contends that because they have not consented to this settlement this count cannot be settled. These claims have been labeled a "lender liability" claim. Although these causes of action are described by principles frequently used in tort, Count XI of the complaint alleges a claim based upon contract and may not be an action in tort in Pennsylvania.
As stated earlier, the court believes this is a derivative action being brought by the committees on behalf of the debtor. This court by confirming the debtor's plan and agreeing to this settlement binds the creditors and shareholders. As stated above, a *313 majority of the Equity Committee's clients also have agreed.
5. The Settlement is Fair and Reasonable
The banks have substantial exposure in this action; the debtor and creditors have exposure if this action fails. The settlement meets the criteria set forth in Texaco and the other cases discussed above. The court finds that the proposed settlement of the litigation, as an integral element of the debtor's plan of reorganization, is fair and reasonable.
Texaco asked whether there is an appropriate balance reached between the likelihood of success for plaintiff at trial and the concrete present benefits of a settlement. The court believes that the proper balance has been reached and is within the range of reasonableness. The benefits of the settlement are substantial. Those benefits include significant monetary concessions from the banks, as discussed above. Another benefit is the avoidance of further litigation expense. It should be noted that the special counsel hired to conduct this specific litigation for the Creditors' Committee has requested $1.7 million in fees and the Equity Committee's special counsel has requested $600,000 thus far. The parties will incur much greater expenses if this litigation continues. By settling this litigation, the debtor also avoids claims by the banks for additional amounts. If the litigation continues and the banks are successful, they will assert claims for additional post-petition interest through the date that the plan is confirmed and for fees incurred in connection with their defense. Finally, settling this litigation permits the reorganization to conclude. The settlement is an essential element of the debtor's plan. If a settlement is not achieved, the debtor's plan cannot be consummated, and it might be impossible to consummate any plan of reorganization.[24]
In addition to the foregoing, it is significant that the settlement, insofar as it is embodied in the debtor's plan, has received the support of the debtor, the Creditors' Committee and the banks, and has received a two-thirds affirmative vote by the holders of common stock and the senior issue of preferred stock and a simple majority affirmative vote by the junior class of preferred stock. This broad support weighs in favor of approval of the settlement.
The court observes that although the common stock class has voted in favor of the debtor's plan, the Equity Committee, the intervenor plaintiff in this action, opposes the settlement. It is clear that the equity holders have priority behind all creditors in priority of distribution. This court concludes that it is unreasonable to expect that a result could be reached that is large enough to allow the debtor to make all creditors whole and also provide additional compensation to equity holders. Moreover, the Equity Committee's opposition is in conflict with the expressed views of two of its three constituencies and perhaps all three.
The competency of counsel supporting the settlement is a factor to be weighed. The settlement is supported by counsel for the Creditors Committee, including special litigation counsel, and counsel for the debtor. The competence of counsel has not been challenged.
The final criterion is the extent to which the settlement is truly the product of arm's length negotiations and not of fraud or collusion. The court is convinced that the negotiations between the banks and the Creditors' Committee were at arm's length.
The court finds the settlement before the court is within the range of reasonableness required for approval.
B. The Structured Settlement at Class 5.SB.7
Included in the debtor's plan is a structured settlement with the members of Class 5.SB.7.[25] The structured settlement *314 provides that the debtors will pay holders of claims in Class 5.SB.7 the full amount of their allowed claims in cash on the effective date of the plan. The settlement provides for an additional $23.75 million in cash to be distributed to Class 5.SB.7 on the effective date in settlement of certain claims and litigation. The claims of this class consist of, in addition to principle, related post-petition charges, expenses, and monthly interest of approximately $34.54 million. Additionally, the settlement further provides for additional interest of $900,000 per month beginning April 1, 1990, and continuing until the effective date of the plan. The cumulative interest accrued at the coupon rate alone is $23.6 million and is increasing monthly. The settlement largely agrees to pay post-petition interest.
On October 11, 1985 Prudential and Sunbeam executed a loan agreement which provided for payment of interest and also expenses.[26] These claims for additional charges, expenses and interest arise from that loan agreement.
The Equity Committee has opposed the structured settlement. The Equity Committee contends that (1) section 502(b) prohibits payment of post-petition interest; (2) Congress did not intend to allow post-petition interest in chapter 11 situations; (3) if Prudential were entitled to post-petition interest, it should not be entitled to the default rate it claims but the statutory rate of interest in Pennsylvania; and, (4) the structured settlement is not within the range of reasonableness.
In order to determine the reasonableness of this settlement, this court must again look to the factors set forth in In re Texaco, Inc. Those factors will not be repeated here. The most important factor is the likelihood of success should the issue of interest be decided at trial. Prudential (the majority claimholder in Class 5.SB.7) has filed a complaint to determine the extent of the interest owed to them under the loan agreement. The Equity Committee contends that the members of Class 5.SB.7 are not entitled to any interest because these claimants are not secured.
As a general rule, accrual of interest on a debt is suspended upon the filing of a petition in bankruptcy. Nicholas v. United States, 384 U.S. 678, 86 S.Ct. 1674, 16 L.Ed.2d 853 (1966). In general, insolvent debtors are not required to pay post-petition interest to unsecured creditors. However, numerous courts have found that where the debtor proves to be solvent, post-petition interest which accrues on unsecured claims may be allowed. In re A & L Properties, 96 B.R. 287 (Bankr.C.D. Cal.1988); see also, In re San Joaquin Estates, Inc., 64 B.R. 534 (9th Cir.1986); In re Manville Forest Products Corp., 43 B.R. 293 (Bankr.S.D.N.Y.1984), aff'd in part, 60 B.R. 403 (S.D.N.Y.1986); In re Boston and Maine Corp., 719 F.2d 493 (1st Cir.1983), cert. denied, 466 U.S. 938, 104 S.Ct. 1913, 80 L.Ed.2d 461 (1984); Debentureholders Protective Comm. of Continental Investment Corp. v. Continental Investment Corp., 679 F.2d 264 (1st Cir.), cert. denied, 459 U.S. 894, 103 S.Ct. 192, 74 L.Ed.2d 155 (1982). By most measures, Sunbeam has been solvent.
In 1984, a similar fact situation occurred in the Johns-Manville Corporation case. Creditors of Manville Forest Products Corporation requested post-petition interest *315 from the solvent subsidiary. The court found as follows:
[W]here the debtor's estate is sufficient to pay the interest which accrues after the filing date, `it would seem inappropriate to return to the debtor a surplus of his assets after accommodation of all claims without a distribution to the creditors of accrued interest to the date of payment of the claims by the trustee.' Therefore, where the debtor is solvent, the bankruptcy rule is that post-petition interest which accrues on unsecured claims which are allowable against the debtor's estate will be paid in full before any money is allowed to revert back to the debtor or its shareholders.
In re Manville Forest Products Corp., 43 B.R. 293, 300 (Bankr.S.D.N.Y.1984), aff'd in part, 60 B.R. 403 (S.D.N.Y.1986) quoting 3 Collier on Bankruptcy, ¶ 502.02 at 503-33 (15th ed. 1984). The court then stated that the solvent subsidiary was obligated to pay post-petition interest to lenders on both its secured and unsecured obligations. Id. at 300.
The court is convinced that Prudential and the other members of Class 5.SB.7 would succeed on the issue of interest if it were to be tried. The settlement merely gives Class 5.SB.7 interest without the enormous cost of additional litigation.
The Equity Committee contends that even if class 5.SB.7 is entitled to post-petition interest, they would only be entitled to the Pennsylvania statutory rate of 6%. We are not convinced of this contention. "[W]ith respect to creditors who had bargained for a rate of interest . . . the bargained-for rate would apply." In re A & L Properties, 96 B.R. 287, 289 (Bankr.C.D. Cal.1988). It has also been held that the contractual provision for interest applies post-petition where the estate proves to be solvent. Debentureholders Protective Comm. of Continental Investment Corp. v. Continental Investment Corp., 679 F.2d 264, 269 (1st Cir.), cert. denied, 459 U.S. 894, 103 S.Ct. 192, 74 L.Ed.2d 155 (1982).
For the above-stated reasons, this court finds that the settlement between the debtor and Class 5.SB.7 is within the range of reasonableness.
C. The Objections of Cowen & Company and Amroc Investments, L.P.
Cowen and Amroc, both general unsecured creditors of Sunbeam and Almet, object to confirmation. Both have been classified in Classes 5.SB.1 and 5.AL.1 and under the debtor's plan are scheduled to receive 100% of the allowed amounts of such claims. Pursuant to section 7.05 of the debtor's plan, the holder of claims in Classes 5.SB.1 and 5.AL.1 have the right to seek payment of post-petition interest by the timely filing of a "Post-petition Interest Declaration" and a final order of the court.
Cowen and Amroc contend that they are subject to disparate treatment and that this constitutes discrimination against "smaller Sunbeam creditors." They allege that there is no difference between themselves and the members of Class 5.SB.7, who have entered into a settlement with the debtor (see the Structured Settlement discussed supra) and those who must request their interest separately. Both creditors overlook the fact that there is a major difference between these classes. The members of Class 5.SB.7 have contractual loan agreements providing for interest, whereas the members of Class 5.SB.1 and 5.AL.1 do not have a contractual agreement that provides for interest. In large part they are trade creditors.
It has been held that "there is no requirement within section 1122 or elsewhere in the Code that all substantially similar claims be included within a particular class." In re Rochem, Ltd., 58 B.R. 641, at 642 (Bankr.D.N.J.1985) (emphasis added). "As a general rule the classification in a plan should not do substantial violence to any claimant's interest." In re LaBlanc, 622 F.2d 872, 879 (5th Cir.1980). Placing Cowen and Amroc into classes where they receive 100% of their allowed claim and must request post-petition interest does not "do substantial violence" to their interest.
The court determines that a decision by the court about entitlement to post-petition interest would be premature at this time. *316 None of the claimants in these classes have filed a "Post-petition Interest Declaration." This court finds that the creditors in Classes 5.SB.1 and 5.AL.1 have not been discriminated against by requiring them to make an application. When they file an application for a "Post-petition Interest Declaration," a judicial determination concerning interest will be made. Adequate notice should be provided to interested parties and the Official Committee of Unsecured Creditors of Sunbeam Corporation. The decision rendered upon the first interest declaration may be res judicata upon all others filed and similarly situated.
D. The Equity Committee's and Japonica's Objection to Confirmation Based on the Actions of Milligan and DLJ
In the analysis of the Japonica and Equity motions to designate which the court denied above, the court promised a further look at the same events as an objection to confirmation. The facts are not in dispute. The purposes and intent of the parties are in dispute. The objectors argued that these purchases were an attempt to entrench the management of Milligan and to ensure control. The defendants argue that this was an attempt to provide liquidity and to provide stability for future shareholders. In any case, Milligan is an insider and it was not appropriate for insiders to participate in these arrangements without disclosure to other creditors. The court is sympathetic to the desire by various potential shareholders for stability and order in the market. The court is not supportive of entrenching any particular management or conversely permitting a control profit not to be widely shared.
The Control Transaction provision, which comes into effect when a Controlling Person owns 30% of the shares, attempts to deal with the problem. That provision is no longer adequate for that purpose. Because the court intends to impose a nonvoting limitation on the Japonica shares, a much smaller number of shares could control the reorganized company. Japonica is estimated to control approximately 50%. Thus, 30% would equate to approximately 60% of the remaining stock.
As part of the confirmation process and as a response to Milligan's involvement and the possibility that control was the objective of DLJ and their affiliates, the triggering 30% control provision is reduced to 15% for as long as the Japonica shares do not have the right to vote.
A plan of reorganization which distributes shares is inherently forward looking. The debtor's plan utilizes a distribution of shares. The debtor's projected sales and profit turnaround is an inherent part of this plan. In this fact situation, these shares carry the hope of future improvement. Warrants even more than shares carry this hope of improvement. A control change could prevent these benefits from being fully realized by shareholders, and also by warrant holders. The debtor is directed to place at least a three-year period of life on the warrants.
Because of the limited number of bank claimants and the large amount of their debt ($186 million), the control provisions in the charter were initially designed to prevent the banks from effecting a change in control and benefitting uniquely.
Even though it now applies principally to Japonica, the court deems it appropriate to continue to achieve this result as part of the confirmation process. As a sanction for the involvement of Milligan and DLJ in this process, the bank agreements entered into with DLJ and others for the purpose of selling issued shares at $6.25 are avoided.
The debtor may develop a procedure to lock up these blocks of stock and to create a facility permitting the orderly sale of shares to the general investing public. The court will retain jurisdiction to insure that these developments are consistent with the plan. A change in control not related to the performance of the debtor is to be discouraged. The new Board of Directors is to be specifically enjoined from permitting such a change without protecting the minority shareholders' and warrant holders' interests.
*317 Japonica will be denied the right to vote its shares for at least three years. Japonica will be enjoined from selling its shares to parties who do not agree in advance to abide by the control provisions. Japonica's voluntary divestiture below 45% or below 30% will not expiate its bad faith activities. Japonica's shares will remain with the debtor in trust for as long as the Japonica shares cannot be voted. The control provision is lowered to 15%. The DLJ/bank contracts to purchase when issued shares at $6.25 are avoided as inconsistent with the control provision and because they were not properly disclosed.
E. The Objection of Elliott Associates, L.P. to Confirmation of the Debtor's Joint Plan
Elliott is an investment fund which purchased approximately 10% of the Chemetron Corporation 9% debentures due 1994. Elliott purchased the debentures long after Chemetron filed bankruptcy. It is a creditor in Class 5.CH.1. The debentures were issued pursuant to an indenture dated September 1, 1969 prior to the Chemetron acquisition by the AI. Class 5.CH.1 is an impaired class and has accepted the plan.
Elliott objects to confirmation of plan of reorganization. The objection sets forth that the plan violates the best interest of creditors test under 11 U.S.C. § 1129(a)(7), that the plan was not proposed in good faith, and that the plan contains an impermissible cramdown provision.
1. Best Interest of Creditors Test
Section 1129(a)(7) of the Bankruptcy Code sets forth the best interest of creditors test which requires that each holder of a claim in an impaired class of creditors must either accept the plan or receive under the plan property of a value, as of the effective date of the plan, that is not less than the amount such holder would receive under a chapter 7 liquidation.
The debtor's disclosure statement contains a liquidation analysis at Exhibit 14 and at page IX-4 which sets forth what creditors would receive in a chapter 7 liquidation. The debtor's experts testified in support of these values and the court has adopted these values. (See Section III supra.) Under the debtor's liquidation analysis creditors of Chemetron would receive 27% to 29% of the value of their claims. Under the plan, Chemetron creditors are receiving 93.2% of the value of their claims, using a $7.00 per share value of the reorganization securities.
Elliott argues that the investment banker for the Creditors' Committee has opined that the initial trading price of the stock may be lower than the value set forth in the debtor's disclosure statement. Therefore, Elliott contends that the value of the property they are receiving, as of the effective date, may be less than under a chapter 7 liquidation. The recovery to Chemetron at 27-29% would be roughly equivalent to a $2.03-$2.18 per share. Thus, for Chemetron creditors to receive less than they would receive in a chapter 7 liquidation, the stock would have to trade below $2.02 per share. This court finds that the shares are valued properly at $7.00 per share; the shares are not likely to trade at such low levels.
Elliott further argues that if only Chemetron were liquidated, Class 5.CH.1 would receive a 100% distribution; Elliott contends that the debtor's liquidation analysis is flawed; other corporate parts of the debtor need not be liquidated for a proper chapter 7 liquidation analysis. Elliott argues somewhat obtusely that liquidation should be analyzed as though the debtor's plan was confirmed with only Chemetron liquidated. Elliott believes that under such a scenario, Chemetron creditors would then receive the same distribution proposed for Class 5.AI.1, General Unsecured Creditors. Class 5.AI.1 consists of $48.2 million of claims which are to receive 3,476,000 shares valued at $7.00 per share. This amounts to a 60.5% recovery under the plan. However, Elliott fails to consider that it would result in 6.4-6.9% on liquidation of AI.
The debtor's plan has not placed the Chemetron claimants in the unsecured class. The plan has treated Chemetron claims in a separate class because they are only derivative of an unsecured claim and *318 must share with other unliquidated claims. Adding $185 million of intercompany claims to the unsecured Class 5.AI.1 would increase this class by 4.8 times and would amount to rewriting the plan.
It is obvious that creditors in classes with higher priority than the Chemetron claimants would be diluted by such action. Those creditors accepted less than full value of their claims in a plan which included the plan's treatment of the Chemetron claims. Elliott argues for the benefit of only part of the confirmation bargain that it otherwise wishes to defeat. The court could not, as part of confirmation, modify the debtor's plan and order such a distribution to the Chemetron claimants.
It is clear from the objection that Elliott does not fully comprehend the debtor's plan. Chemetron is not being liquidated. Chemetron will continue to have an intercompany claim against the reorganized debtor. The intercompany claim is being reinstated in the plan.
Chemetron is a nonoperating company with one asset, an intercompany claim against AI of approximately $185 million. There are approximately $36.2 million of known liquidated claimants at Chemetron and the plan provides a 93.2% distribution at $7 per share to them. Elliott ignores the fact that there are other substantial claims against Chemetron that are not liquidated! The debtor established that there are approximately 8 superfund sites and the McGeon Nuclear site that have large potential environmental claims, in addition to the $36 million of liquidated claims. The intercompany claim upon which Elliott relies is also liable for these claims. The debtor is reinstating these large unliquidated claims and proposing to pay the liquidated claims such as Elliott. If these unliquidated claims are reinstated, the debtor expects over time that their liability could be managed better and may even be reduced. If they are liquidated now, the United States could raise claims as high as $200 to $600 million and prevent any distribution to the Chemetron claimants. The assurance of a reliable financial entity, such as the reorganized debtor, and reinstatement has satisfied the environmental claimants. Chemetron alone could not provide such assurance.
In addition, there are claims of retirees, product liability claims and various industrial revenue bond claims at Chemetron that would require liquidation before distribution could be made to the $36.2 million of known Chemetron claims. Elliott improperly analyzed these unliquidated liabilities in relation to the $185 million intercompany claim. The debtor's evidence on the matter of unliquidated claims was creditable.
Further, the Creditors' Committee believes that the affairs of Chemetron are so intertwined with AI that substantive consolidation is the correct equitable result. It is clear the Creditors' Committee will object to the payment of this intercompany claim on that basis. Any separate liquidation of Chemetron will substantially delay the distribution to Chemetron claimants and could defeat their payment.
Elliott's analysis is seriously defective. Because the class into which Chemetron's intercompany claim could be classified is receiving a distribution of 60.5%, Elliott has calculated that 60.5% of $185 million, or $111 million, should be available for distribution to the liquidated Chemetron claimants. At best it would need to be shared with the unliquidated claims above.
More important, if the plan is not confirmed, upon liquidation, the unsecured creditors of Class 5.AI.1 would receive 6.4-6.9% (see Disclosure Statement, IX-4), not 60.5%; 6.9% of $185 million, approximately $13 million, is available. The debtor estimated that Class 5.CH.1 consisting of the liquidated $36.2 million claims would receive 93.2% under the plan and they estimate only 27-29% on liquidation. Even that analysis, however, does not account for the unliquidated claims such as environmental, retirees, etc. Without a reorganized debtor, a liquidation of AI or Chemetron or both will produce much less than 27-29% for the Chemetron claims.
The court finds that Chemetron creditors are receiving substantially more than they would under a chapter 7 liquidation and that the plan thus satisfies the "best interest" *319 test of § 1129(a)(7). Elliott's objection with regard to the best interest of creditors test must be overruled.
2. Good Faith Objections
Elliott contends that the provision of the plan which requires the withdrawal of the plan as to Chemetron if Chemetron creditors do not vote to accept the plan was not proposed in good faith. As a practical matter, in a complex chapter 11 with subsidiary debtors such as this, the only method to confirm the plan, if creditors of any subsidiary did not accept, is to withdraw the plan as to that subsidiary debtor and propose an alternative treatment. Clearly, such provision was included for the purpose of assuring a confirmable plan and was made in good faith. It is moot, however, since the Chemetron class accepted the plan.
Elliott further objects that the intention of the Creditors' Committee to object to the Chemetron intercompany receivable was not in good faith. The statement merely reflected the already pending Motion for Substantive Consolidation and was required to disclose to all creditors of Chemetron that the Motion for Substantive Consolidation would not be dismissed in the event that such creditors rejected the plan. Moreover, consistent with its statement of intention on April 30, 1990, the Creditors' Committee filed its Motion for Substantive Consolidation and Objection to the Chemetron Intercompany Claims. Despite the debtor's assertions about the intercompany receivable, it has been and remains the position of the Creditors' Committee that Chemetron is merely a shell corporation which long ago had been merged with AI and the intercompany receivable was not an asset of the Chemetron estate. Rather, the Creditors' Committee asserts that the Chemetron and AI estates should be treated as one, and the Chemetron creditors should not receive treatment superior to the creditors of AI. This objection is denied.
3. Impermissible Cramdown
The allegation set forth by Elliott with regard to the impermissible cramdown has been rendered moot by virtue of the fact that the class of creditors at Chemetron voted to accept the debtor's plan. The objection is also misplaced because the plan does not provide for the cramdown of Chemetron, but merely provides that the plan would be withdrawn as to Chemetron and that Allegheny would have to provide for alternative treatment for Chemetron creditors in the future.
The rationale for providing that the Chemetron creditors would not receive a distribution is based upon the fact that the intercompany receivable upon which their distribution depends is a disputed claim. This treatment is consistent with the treatment of other disputed claims in the plan. No creditor whose claim is disputed shall receive a distribution under the plan until their claim is resolved. Thus this objection is unfounded.
V. CONCLUSION
The court believes that the preceding discussion addresses all substantial objections to confirmation. Other matters are addressed in the Order of Confirmation. The court finds that the debtor's plan of reorganization fully satisfies the requirements of 11 U.S.C. § 1129.
An appropriate order is attached.
CONFIRMATION ORDER
WHEREAS, the above memorandum has made findings of fact and conclusions of law as to disputed matters;
WHEREAS, the Debtors' Joint Stock Plan of Reorganization dated December 29, 1989, filed by the Debtors on December 29, 1989, as amended by the Debtor's Joint Stock Plan of Reorganization filed by the debtors on February 2, 1990 (hereinafter referred to as the "Joint Stock Plan"), having been transmitted to creditors and equity security holders; and
WHEREAS, the court has determined after hearing on notice that:
1. The rejections of the Joint Stock Plan filed by Japonica Partners, L.P. ("Japonica") and their affiliates should be designated pursuant to 11 U.S.C. § 1126(e) and that votes cast against the plan were not in good faith and were not solicited or procured *320 in good faith and in accordance with the provisions of Title 11 of the United States Code; and, therefore, the court finds that Class 2.AI.2 Allegheny Secured Bank Claims and Class 4.AI.2 Allegheny Senior Unsecured Claims have accepted the plan;
2. The Joint Stock Plan does not discriminate unfairly, and is fair and equitable, with respect to the class of the holders of the issued and outstanding $11.25 Convertible Preferred Stock, Class 8.AI.2, the only impaired class of claims or interests which did not accept the Joint Stock Plan;
3. Pursuant to the provisions of Article 7.16, Cramdown of the Plan, the court has found that the "foregoing distributions are not permitted" and further that the settlement of the bank litigation requires that Class 8.AI.2 shall receive the warrants as provided by acceptance of the Joint Stock Plan and that Class 9.AI.1 Allegheny Common Stock shall also receive warrants as provided by acceptance of the debtors' plan;
4. The Joint Stock Plan has been accepted in writing by the creditors and equity security holders whose acceptance is required by law;
5. The debtors filed modifications to the Joint Stock Plan on July 5, 1990, which, by virtue of this court's orders of April 30, 1990, at Motion Nos. 90-2505M and 90-2877M were deemed accepted by all creditors and equity security holders who accepted the Joint Stock Plan (the Joint Stock Plan as so modified being hereinafter referred to as the "Joint Stock Plan");
6. The provisions of Chapter 11 of the Code have been complied with; the Joint Stock Plan has been proposed in good faith and not by any means forbidden by law;
7. Each holder of a claim or interest has accepted the Joint Stock Plan or will receive or retain property of a value, as of the effective date of the Joint Stock Plan, that is not less than the amount that such holder would receive or retain if the Debtor against which or in which the holder holds its claim or interest were liquidated under Chapter 7 of the Code on such date;
8. All payments made or promised by the Debtors or by persons issuing securities or acquiring property under the Joint Stock Plan or by any other person for services or for costs and expenses in, or in connection with, the Joint Stock Plan and incident to the case, have been fully disclosed to the court and are reasonable or, if to be fixed after confirmation of the Joint Stock Plan, will be subject to the approval of the Court;
9. The identity, qualifications, and affiliates of the persons who are to be directors or officers or voting trustees, if any, of a Debtor, or a successor to the Debtor under the Joint Stock Plan, after confirmation of the Joint Stock Plan, have been fully disclosed, and the appointment of such persons to such offices, or their continuance therein, is equitable and consistent with the interests of the creditors and equity security holders and with public policy and their names are as nominated by management, William M.R. Maple, James Milligan and Samuel Iapalucci, and as nominated by the Banks, in Class 2.AI.2, John R. Isaac, Jr., L. Gerald Tarantino, and as nominated by the Unsecured Creditors, Roderick M. Hills and R. Guy Boyle;
10. The identity of any insider that will be employed or retained by the debtor, and his compensation, have been fully disclosed except that the compensation by distribution of shares as disclosed in the Disclosure Statement is not allowed;
11. Confirmation of the Joint Stock Plan is not likely to be followed by the liquidation or the need for further financial reorganization, of any of the debtors or any successor to any of the debtors under the Joint Stock Plan;
12. The debtors have filed their Schedule of Rejected Executory Contracts and their Schedule of Assumed Contracts pursuant to Article IX, Section 9.01 of the Joint Stock Plan;
13. The Joint Stock Plan incorporates the settlement, compromise, and dismissal with prejudice of all claims in the action pending in this court at Adversary Proceeding 88-186 against Mellon Bank, N.A. and other secured lenders to Allegheny. The *321 settlement, compromise, and dismissal with prejudice of Adversary Proceeding No. 88-186 (the "Bank Dismissal") is conditioned upon the Joint Stock Plan and the Joint Stock Plan is conditioned upon the settlement, compromise and dismissal of Adversary Proceeding No. 88-186. If the Joint Stock Plan is withdrawn for Allegheny, then the Bank Dismissal shall become null and void and this order shall not prejudice the rights of any person with respect to the Adversary Proceeding. The court finds that the proposed settlement and compromise is in the best interests of the estate and that the terms thereof fall within the reasonable range of litigation possibilities. Accordingly, the settlement, compromise and dismissal with prejudice of the Adversary Proceeding is approved and that the provisions of Exhibit D are hereby adopted for that purpose;
14. The court has carefully reviewed the joint application of the Official Committee of Unsecured Creditors of Sunbeam Corporation ("Sunbeam"), Almet/Lawnlite, Sunbeam Holdings Corporation, and Chemetron Corporation; The Prudential Insurance Company of America, and the Debtors in support of the Structured Settlement of claims of certain creditors of Sunbeam classified as Class 5.SB.7, as well as the record and memoranda of law submitted at Adversary Proceeding No. 88-395 (the "Prudential Adversary") and court adopts as its finding the data in Exhibit B and the court finds that the Structured Settlement is in the best interest of the Debtors' estates and falls within the range of reasonableness. Accordingly, the court hereby approves the Structured Settlement;
15. The provisions of Exhibits A, B, C and D attached to Joint Stock Plan as shown in the Disclosure are specifically adopted and incorporated here as part of findings related to the Order of Confirmation;
IT IS ORDERED THAT:
1. The Joint Stock Plan, filed at docket no. 6530 on February 2, 1990, as amended by Debtors' Modifications to Joint Stock Plan of Reorganization Dated December 29, 1989 as Amended, Filed February 2, 1990, filed at docket no. 7871 on July 5, 1990, which is incorporated by reference, is confirmed;
2. The debtors are discharged effective on the effective date from any claim and any "debt" (as that term is defined in Code Section 101(11) that arose before the confirmation date, except for claims or debts which are reinstated by the express provisions of the Joint Stock Plan), and the Debtors' liabilities in respect thereof are extinguished completely, whether reduced to judgment or not, liquidated or unliquidated, contingent or noncontingent, asserted or unasserted, fixed or not, matured or unmatured, disputed or undisputed, legal or equitable, known or unknown, that arose from any agreement of any of the debtors entered into or obligation of any of the Debtors incurred before the confirmation date, or from any conduct of any of the debtors prior to the confirmation date, or that otherwise arose before the confirmation date, including, without limitation, all interest, if any, on any such debts, whether such interest accrued before or after the date of commencement of the relevant reorganization case, and including, without limitation, all debts based upon or arising out of any liability of a kind specified in Code Section 502(g), 502(h) and 502(i), whether or not a proof of claim is filed or deemed filed under Code Section 501, such claim is allowed under Code Section 502, or the holder of such claim has accepted the Joint Stock Plan, and (b) each of the debtor's liabilities for such claims and debts are limited to the amounts such Debtor is paying or causing to be paid pursuant to the Joint Stock Plan and pursuant to promissory notes and accompanying contracts with respect to holders of allowed secured claims;
3. The Joint Stock Plan does not provide for the liquidation of all or substantially all of the property of any of the Debtors;
4. The provisions of the Joint Stock Plan and this Confirmation Order are nonseverable and mutually dependent;
5. All executory contracts (including, without limitation, product, patent, trademark, and know-how licenses) and unexpired *322 leases assumed by any of the Debtors during the reorganization cases or under the Joint Stock Plan shall be assigned and transferred to, and remain in full force and effect for the benefit of, the respective reorganized company notwithstanding any provision in such contracts or leases (including those described in Code Sections 365(b)(2) and (f)) that prohibits such assignment or transfer or that enables or requires termination of such contract or leases;
6. This court, notwithstanding entry of this Confirmation Order, shall retain jurisdiction to (a) hear any action initiated by the reorganized companies seeking to avoid or attack, as fraudulent or preferential transfers, under Code Sections 544, 547, 548 or 550, prepetition transfers or conveyances of the Debtors' assets and (b) any claim for postpetition interest as specified in a timely filed postpetition interest declaration and (c) as provided in Section 10.03 of the Joint Stock Plan;
7. Except as otherwise expressly provided in the Joint Stock Plan, on the effective date each reorganized company will be vested with all of the property of its estate free and clear of all claims, liens, encumbrances, charges and other interests of creditors and equity security holders, and may operate its businesses free and clear of any restrictions imposed by the Code or by the court; provided, however, that each debtor shall continue as a debtor-in-possession under the code until the effective date, and, thereafter, each debtor may operate its businesses free of any restrictions imposed by the Code or by the court;
8. No Claims for postpetition interest may be heard by the court unless such postpetition interest claims are specified in a timely filed postpetition interest declaration. The Debtor is to provide a proper notice to such creditors as provided in section 7.05 of the Plan.
9. No extraordinary compensation or reimbursement of expenses will be awarded to any person required to file a binding compensation estimate (i) who does not file a timely binding compensation estimate, or (ii) in excess of the amount set forth in a timely binding compensation estimate as provided in 7.07 of the plan;
10. All common stock to be issued pursuant to the Joint Stock Plan shall be validly issued, fully paid and nonassessable. By reason of Section 1145 of the Code, the Convertible Asset Sale Certificates, the Warrants to be issued under the Joint Stock Plan and the common stock issuable upon exercise of the Warrant and the Convertible Asset Sale Certificates shall be exempt from registration under Section 5 of the Securities Act of 1933, as amended, and any state or local law requiring registration for offer or sale of a security;
11. The action pending at Adversary No. 88-186 as provided in Section 5.04(a) of the Joint Stock Plan shall be dismissed on the effective date, with prejudice, and such settlement and dismissal is reasonable and in good faith and is hereby approved;
12. All claims by any party that were or could have been asserted in the motion of the Official Committee of Unsecured Creditors of Allegheny International, Inc. for substantive consolidation (Motion No. 88-5652M) including the objection raised by Chemetron at Motion No. 90-3260M, among Allegheny, Sunbeam and any other Debtor reorganized pursuant to the Joint Stock Plan are dismissed with prejudice effective on the effective date;
13. Except as otherwise provided in this order, on the effective date this order acts as a full and complete release and discharge by the Debtors and by any and all third parties including, without limitation, creditors, shareholders, or any other party in interest, of the indenture trustees and the members and ex officio members of the official committees appointed in this case, their respective representatives, agents, employees, and counsel from any further obligation and from any and all manner of action and actions, causes of action, claims, obligations, suits, debts, sums of money, accounts, reckonings, covenants, contracts, controversies, agreements, promises, damages, judgments, and demands whatsoever, whether in law or in equity, which the Debtor or any such third parties had, may in the future have, or now has, whether *323 known or unknown, contingent or absolute arising from any actions taken or not taken in such capacity as an indenture trustee or as a member of one of the official committees, including any negligent action or inaction, provided that nothing in this order shall be deemed a release of any claims against those insurance companies which held claims in Class 4.AI.2 relating to breach of their fiduciary duties. The court adopts Exhibit C Release for this purpose;
14. No later than the effective date, the Banks and Allegheny are directed and instructed to take any and all actions which may be necessary or appropriate to consummate the Bank Dismissal approved hereby and to implement said Bank Dismissal, including but not limited to the execution of the Release, a copy of which is attached to the Joint Stock Plan as Exhibit C;
15. The court retains jurisdiction to enforce the provisions of this order and the Bank Dismissal approved herein except as provided in Exhibit C;
16. All persons (including those persons holding Senior Indebtedness as that term is defined in the Public Subordinated Debt Trust Indentures) are permanently enjoined from enforcing or seeking to enforce any claimed contractual subordination rights with respect to distributions to the holders of the Public Subordinated Debt and to the Indenture Trustee;
17. The Structured Settlement of claims of certain creditors of Sunbeam, classified as Class 5.SB.7, is hereby approved;
18. In response to the litigation at Adversary Proceeding 90-260 and the findings of fact and conclusion of law made in the memorandum above and pursuant to authority granted in 11 U.S.C. § 105, all shares to be distributed to Japonica or their affiliates shall be held in trust by the Debtors for three years and shall not be entitled to vote on any matter while in trust or owned by Japonica during those three years; however, Japonica may enjoy the other benefit of ownership such as dividends and proceeds from sales;
If within forty-five days or less from the date of this order (i.e. on or before August 27, 1990) Japonica agrees to the provisions and establishes the ability to respond to the shareholders' "puts" at $7 per share and $1.53 per warrant, then the Debtors and Japonica, upon motion to this court, shall promptly facilitate the purchase transactions and orderly change in control of the Reorganized Debtor. If Japonica does not so establish its agreement and ability within 45 days, the trust of Japonica shares shall continue for three years. During that time, the shares owned by Japonica are not entitled to vote while owned by Japonica or parties with which Japonica is affiliated. Japonica may choose to continue to own the shares or set in motion, with the cooperation of the Debtor or the Reorganized Debtor and the consent of this court, an orderly sale of such shares to third parties who shall be required to consent to the control provisions and the Order of Confirmation. Upon such sale, these shares shall be entitled to vote.
19. Because the Japonica shares shall not be entitled to vote and because Japonica owns or controls 45 to 50% of the total shares and further because of the undisclosed involvement of insiders, innocent or otherwise, with the Banks, Donaldson, Lufkin & Jenrette ("DLJ") and its affiliates; the control provisions of the charter of the Reorganized Debtor are reduced to 15% of the total shares for so long as Japonica owns any shares or for at least three years whichever is longer. This 15% provision shall apply to all shareholders including employees or insiders who are promised shares but have not received them.
20. Pursuant to 11 U.S.C. § 105, the contracts between DLJ and their affiliates and the Banks for when-issued shares are avoided and of no effect;
21. Any change in control (15% or more) for at least three years shall also trigger a put provision as to the warrants for a value of at least $1.53 per warrant.
22. The contractual provisions for payment to James D. Milligan of those shares which were to be paid to him on a time vesting basis over three years in exchange for him waiving his rights to his annual *324 salary are not approved. The Debtors have withdrawn these provisions. The Debtors intend to recommend to the Board of Directors of the Reorganized Company that all shares to be paid to Milligan be paid on the basis of performance. The new agreement is to be submitted by the outside Directors of the Reorganized Company. These changed provisions are to be submitted to creditors on Service List 6; objections may then be raised and a hearing conducted.
23. All duplicative objections to confirmation which have been raised which are similar to those issues discussed in the memorandum are decided similarly and denied;
24. The objections raised by Finalco Inc., First National Bank of Chicago, and Sovran Bank are considered matters to be first decided in procedures for objection to claims. The Debtors are to schedule hearings promptly. The substance of these disputes are not decided here except to determine that they do not constitute an objection to confirmation at this time;
25. By approving the Joint Stock Plan, holders of Class 7.AI.1 (Allegheny Subordinated Debenture Claims) accept the resolution of the dispute over original issue discount set forth in Section 7.17 of the Joint Stock Plan. Such section provides that this court's Memorandum Opinion and Order of Court of May 18, 1989 (the "OID order"), at docket No. 4658, which has been appealed to the United States District Court for the Western District of Pennsylvania (the "appeal"), shall become a final order. All parties to the appeal are directed to withdraw their respective appeals to permit the OID order to become a final order.
26. All remaining objections are denied.
All parties are granted five days, until July 17, 1990, to raise matters which have been inadvertently omitted or not properly addressed in the order, for which a hearing is set on July 19, 1990 at 9:30 A.M. in Room 1603 Federal Building, Pittsburgh, PA 15222.
All parties are granted until July 23, 1990 to raise motions to reconsider substantive matters for which a hearing is set for July 26, 1990 at 9:30 A.M. in Room 1603 Federal Building, Pittsburgh, PA 15222.
ON MOTION FOR RECONSIDERATION
The matters presently before the court are the motions for reconsideration filed by the debtor,[1] the secured bank lenders (the "banks"), Fidata Trust Company New York ("Fidata"), the Official Committee of Equity Security Holders of Allegheny International, Inc. (the "Equity Committee"), and Cowen & Co. ("Cowen"). The movants seek reconsideration of this court's Memorandum Opinion and Order of Court of July 12, 1990 (the "Memorandum Opinion and Order"). In addition, the court will address certain matters which the debtor, the Equity Committee, and the banks previously raised as technical matters, but which the court considered in the nature of motions for reconsideration. For the reasons set forth below, the debtor's motion is granted; the banks' motion is granted in part and denied in part. The motions of Fidata and the Equity Committee are denied. Cowen's motion is denied as untimely.
I. The Debtor's Motion
The debtor requests that paragraph 22 of the confirmation order, which deals with the time vesting of shares to be paid to the management of the reorganized debtor, be clarified to indicate that it applies only to James D. Milligan, the chief executive officer designate of the reorganized debtor. In drafting the confirmation order, the court intended to apply those provisions only to the top executives, rather than to all employees across-the-board. Therefore, paragraph 22 is modified, as requested by the debtor.
In a previous filing, the debtor requested that paragraph 24 be modified to delete references to the Jasper County Board of Supervisors ("Jasper County") and the Secretary *325 of the Department of Revenue and Taxation of the State of Louisiana (the "Secretary"). Paragraph 24 deals with miscellaneous objections to confirmation which the court construed as matters related to the allowance of claims. In its objection, Jasper contends that an unexpired lease from Jasper to Sunbeam may not be assumed by the plan of reorganization, because the lease was automatically rejected pursuant to 11 U.S.C. § 365(d)(4). However, the court extended the time to assume or reject unexpired leases until confirmation of the plan of reorganization. Therefore, the complaint of Jasper was not related to allowance of a claim and should be deleted from paragraph 24.
The objections of the Secretary relate to the interest rate and frequency of deferred payments under the plan. Thus, the Secretary's objections are not related to a claim and should be deleted from paragraph 24. Moreover, the applicable provisions of the plan of reorganization do not violate 11 U.S.C. § 1129(a)(9)(C).
II. Fidata's Motion
Fidata seeks reconsideration of the court's ruling on section 7.16 of the plan, which Fidata refers to as the "clawback" provision. Section 7.16 provides that if any class of equity security holders does not accept the plan, than the warrants due to that class and any junior class revert to Class 7.AI.1, the subordinated debt. The court struck such provision as discriminatory, and held that Class 8.AI.2 and Class 9.AI.1, the classes affected by section 7.16, should receive the distribution contemplated by the plan of reorganization.
Fidata complains that section 7.16 was a carefully negotiated and drafted attempt to provide value to equity holders to induce them to vote for the plan, thereby avoiding cramdown and the attendant valuation process. Because Class 8.AI.2 did not vote for the plan, valuation and cramdown occurred. The manner in which the court approved the cramdown denied Fidata the benefit of its bargain. Fidata contends that section 7.16 is not prohibited by the Bankruptcy Code and does not constitute "unfair discrimination," as that term is used in 11 U.S.C. § 1129.
This is a unique problem. It is clear to the court that under the absolute priority rule, there is insufficient value to provide a distribution to all classes of equity holders. However, as the court discussed at length in the Memorandum Opinion, the equity holders were also offered these same warrants for settling, inter alia, the litigation against the banks (Adversary No. 88-186). The valuation which the court accepted, as well as the valuation urged by the Equity Committee, did not separately consider the value of the bank settlement, even though the plan of reorganization proposes and requires the settlement of that action. Moreover, one of the reasons the equity classes were offered warrants was to reduce all litigation. If the court views the distribution of warrants as the result of the bank settlement, the warrants given to the equity security holders were not "taken away" from Class 7.AI.1, the subordinated debt holders. Moreover, if the settlement of the action against the banks is not consummated, the reorganization cannot be consummated. Such a result would be deleterious to all classes, including Class 7.AI.1.
In retrospect, rather than hold that section 7.16 was "discriminatory," the court could have used different terminology. Nevertheless, section 7.16 remains unacceptable to the court for the reasons stated above.
III. The Banks' Motion
In response to the banks' adversary proceeding against Japonica Partners, L.P. ("Japonica"), the court imposed a trust on the stock to be received by Japonica under the plan of reorganization. The Memorandum Opinion did not specifically provide for the treatment of any cash distributions to Japonica for its bank claims. The banks request that any cash distributed to Japonica under the plan also be held in trust to ensure that the banks can enforce potential judgments against Japonica. The banks also suggest that the Memorandum Opinion and Order are unclear as to whether *326 another control purchaser would have to purchase Japonica's shares and whether other stock holders can sell blocks of shares. The banks also complain that the Order grants warrant holders the right to receive $1.53 per share in a control transaction, irrespective of the amount paid for the common stock of the reorganized debtor in such a transaction.
As stated in the Memorandum Opinion and Order, the court used its injunctive power in as limited a manner as was appropriate, and did not intend to deprive Japonica of all of the benefits of its various bargains. Therefore, Japonica may put its shares in the event of a control transaction by another entity. However, because of this court's clear statement that the best chance to maximize recovery for all creditors and present equity holders lies in a turnaround by the debtor, which is estimated to take three years, control transactions are especially discouraged for three years. Creditors should not be deprived of the benefit of a turnaround. Any control transaction must strictly comply with the control transaction provisions set forth in the certificate of reorganization of the reorganized debtor, as modified by the Memorandum Opinion and Order of Court. With respect to the banks' concern about distribution of cash to Japonica, the court modifies the Memorandum Opinion and Order to hold that Japonica shall not receive any distribution of cash during the pendency of an appeal by Japonica. With respect to the banks' complaint that the Memorandum Opinion and Order imposes a minimum purchase price for the warrants, but not for the shares, the court does not see the need to similarly protect shareholders since they will elect directors to the board of the reorganized debtor.
Of a technical nature, the banks suggest that paragraph 13 of the Order of Court, which provides, inter alia, for a release of claims against members of the official committees, be modified to exclude from the release possible breaches of fiduciary duties by certain former holders of claims in Class 4.AI.2 who sold their claims to Japonica. The banks also suggest that paragraph 9, which names the directors of the reorganized debtor, be modified because it fails to designate the class of directors for each of the directors nominated by the banks. The banks desire to indicate that one of their nominees, L. Gerald Tarantino, be placed into the third class of directors. Both of the modifications mentioned in this paragraph are approved. However, the events related to the sale of claims by members of the Official Committee of Unsecured Creditors of Allegheny International, Inc. (the "Creditors' Committee") are not covered by paragraph 13. The court does not decide whether those events are, or are not, breaches of fiduciary duties.
IV. The Equity Committee's Motion
The Equity Committee continues to challenge the methods and results of the valuation of the debtor by the debtor's financial advisor, Smith Barney, Harris, Upham & Co ("Smith Barney"). The Equity Committee, inter alia, suggests that the court erred by failing to include the $170 million in excess working capital of the debtor in determining valuation. With respect to this objection, the court notes that such excess working capital was included in Smith Barney's valuation. With respect to the Equity Committees's other objections concerning valuation, the court affirms its decision, as set forth in the Memorandum Opinion. The court notes again that although Charles River Associates ("CRA"), the Equity Committee's financial advisor, properly used the debtor's projections, it did not consider the inherent business risk of achieving those projections. In comparing companies which had emerged from chapter 11 to the debtor, CRA did not use the projections of those companies. Rather, CRA used actual performance versus stock price. In the instant case, CRA is treating the debtor's projections as having been realized! CRA did not adjust their factor to account for such risk.
The Equity Committee also argues that the court erred by holding that 11 U.S.C. § 1126(e) does not empower the court to designate the votes of innocent creditors and interest holders. Section 1126(e) provides that "the court may designate" the
*327 votes "of any entity . . . whose acceptance was not solicited or procured in good faith. . . ." (emphasis added). Even if the court adopts the interpretation of section 1126(e) urged by the Equity Committee, the court will not designate the votes in favor of the debtor's plan of reorganization. Although the court was critical of the attempted transaction between Donaldson Lufkin & Jenrette Securities Corp. ("DLJ") and the banks, there was insufficient evidence of bad faith by the debtor or James D. Milligan. Even though the court criticized the attempted transaction between DLJ and the banks as "inept and ill-timed," and imposed appropriate sanctions, the court did not make a finding of bad faith. Rather, the court found clear and convincing evidence that the banks would have voted for the debtor's plan even without the opportunity to sell their when-issued shares. The Creditors' Committee had also indicated its continuing support of the debtor's plan, notwithstanding the matters of which the Equity Committee complains. Therefore, the court affirms its decision not to exercise its discretion to designate the votes in favor of the debtor's plan.
V. Cowen's Motion
The Memorandum Opinion and Order of Court set July 23, 1990 as the deadline for moving for reconsideration. Cowen attempted to serve its motion by telecopier on that date. Cowen was under the mistaken belief that filing by telecopier was permissible in the instant case. It is not. Therefore, Cowen did not file a timely motion. Cowen has moved for leave to file its motion for reconsideration nunc pro tunc, but the circumstances related by Cowen do not constitute excusable neglect. Therefore, Cowen's motion for leave to file its motion nunc pro tunc is denied. Cowen's motion for reconsideration is denied as untimely. However, the court does not believe that Cowen has been prejudiced, since the substantive matters underlying its motion will be heard in connection with postpetition interest applications.
NOTES
[1] In this opinion, the court refers to Allegheny International, Inc. ("AI"), Sunbeam Corporation ("Sunbeam"), Sunbeam Holdings, Inc., Almet/Lawnlite, Inc., Chemetron Corporation ("Chemetron"), and ten of the fourteen subsidiaries that filed for chapter 11 relief on May 3, 1988 collectively as the debtor.
[2] Japonica's counsel was present, but did not participate, at those hearings.
[3] Section 1126(c) of the Bankruptcy Code, 11 U.S.C. § 1126(c), provides as follows:
(c) A class of claims has accepted a plan if such plan has been accepted by creditors, other than any entity designated under subsection (e) of this section, that hold at least two-thirds in amount and more than one-half in number of the allowed claims of such class held by creditors, other than any entity designated under subsection (e) of this section, that have accepted or rejected such plan.
[4] One other bank, Chase Manhattan Bank, N.A., voted against the debtor's plan. That bank has been identified as a potential lender to Japonica.
[5] The Official Committee of Equity Security Holders of Allegheny International, Inc. (the "Equity Committee") has intervened as a plaintiff.
[6] See the Settlement of Adversary No. 88-186, which is discussed in detail at Section IV(A).
[7] Bankruptcy Rule 3016 provides that "[a] party in interest, other than the debtor, who is authorized to file a plan under § 1121(c) . . . may file a plan at any time before the conclusion of the hearing on the disclosure statement. . . ." (emphasis added). Japonica filed its plan of reorganization on January 24, 1990 the last day of the hearing on the debtor's disclosure statement.
[8] Lufkin is the secured lenders' designated member of the board of directors of the reorganized debtor. Because of his failure to cooperate with discovery attempts, the court bars him from serving on the board of directors.
[9] DLJ is well known to this court; on two previous occasions during the course of this bankruptcy, DLJ attempted to acquire the debtor. On November 2, 1988, the debtor entered into a letter of intent and preliminary agreement with DLJ, by which DLJ would acquire the debtor. Thereafter, a competing proposal was submitted by Paul S. Levy, Peter A. Joseph, and Angus C. Littlejohn (the "Levy Group"). The court instructed the debtor to consider the bid of the Levy Group and the responsive bid of DLJ. The debtor selected the revised DLJ proposal and entered into a revised letter of intent with DLJ on November 16, 1988.
The Levy Group then submitted another proposal which the debtor rejected. However, shortly before the meeting of the debtor's board of directors to approve the final DLJ proposal, DLJ informed the debtor that it had reached an agreement with the Levy group to sell them two major business units of the debtor. The debtor then moved to void the agreement with DLJ.
On or about February 22, 1989, the debtor entered into an agreement and plan of merger with a company formed by DLJ. Milligan was a participant with DLJ in the plan and was to have been the chief executive officer and a director of the company formed by DLJ. The transaction between the debtor and DLJ was never consummated because the debtor failed to meet certain projections. However, the debtor retained Milligan as a consultant, and later made him president of Sunbeam Corp.
[10] Morgan Guaranty Trust Company of New York, Standard Chartered Bank, and Grant Street National Bank (the successor-in-interest to Mellon Bank, N.A.).
[11] When Travers left for Switzerland, he was unaware that a representative of DLJ would be attending that meeting; he did not learn that fact until he was en route.
[12] It should be noted that the Creditors' Committee has indicated its continuing support of the debtor's plan, notwithstanding the matters of which Japonica and the Equity Committee complain.
[13] Based on the representations of counsel, all of the banks agreed to file the joint stock plan. Subsequently, a few of the banks decided against the joint stock plan. However, the banks continued to support the debtor's plan.
[14] Section 101(30) in pertinent part, provides that "`insider' includes . . .
(B) if the debtor is a corporation
(i) director of the debtor;
(ii) officer of the debtor;
(iii) person in control of the debtor;
(iv) partnership in which the debtor is a general partner;
(v) general partner of the debtor; or
(vi) relative of a general partner, director, officer, or person in control of the debtor . . . "
[15] Section 7.16 of the plan of reorganization provides that if any class of equity holders rejects the plan, then that class and any junior class would not receive any distribution. The warrants intended for those classes would be distributed to Class 7.AI.1. Thus, under section 7.16 of the plan, Class 8.AI.2 and Class 9.AI.1 are not entitled to any distribution. However, section 7.16 also provides that if the court "finds that the foregoing Distributions are not permitted under the Bankruptcy Code then the `absolute priority' rules of Bankruptcy Code Section 1129(b) shall be followed."
The court finds section 7.16 discriminatory. Moreover, as the Equity Committee points out, there is no authority in the Bankruptcy Code for discriminating against classes who vote against a plan of reorganization. Therefore, the absolute priority rule shall be followed.
[16] Over the objection of the Equity Committee, the court qualified Martin as an expert witness.
[17] The debtor anticipated issuing more shares of stock, but improved cash flow increased the cash available for distribution, thus reducing the number of shares to be issued.
[18] For reasons that are not in the record, the Equity Committee terminated the services of Whitman Heffernan.
[19] For example, if a stock goes up twice as much as the stock market when the market goes up, and down twice as much when the market goes down, it has a beta of two. If the stock moves in synchrony with the market, it has a beta of one.
[20] Mellon Bank, N.A. was the agent for the consortium.
[21] The banks have submitted affidavits of the senior management of AI in support of their motion for judgment as to those counts.
[22] Alas, Spear Leeds & Kellogg, the dominant member of the Equity Committee, refused to tender its shares and is credited with defeating the proposed merger with First Boston. Ansberry When Will Somebody Anybody Rescue Battered Allegheny?, Wall St.J., April 14, 1990 at 1, Col. 6.
[23] Section 510(c) of the Bankruptcy Code, 11 U.S.C. § 510(c) provides as follows:
Notwithstanding subsections (a) and (b) of this section, after notice and a hearing, the court may
(1) under principles of equitable subordination, subordinate for purposes of distribution all or part of an allowed claim to all or part of another allowed claim or all or part of an allowed interest to all or part of another allowed interest; or
(2) order that any lien securing such a subordinated claim be transferred to the estate.
[24] The Japonica Plan requires a settlement as well.
[25] Class 5.SB.7 (Sunbeam Institutional Unsecured Claims) consists of all unsecured non-priority claims for borrowed money against Sunbeam held by a financial institution. The members of this class are Prudential Insurance Company of America, Third National Bank of Nashville, Government Employees Insurance Company ("GEICO"), and First Wisconsin Trust Company.
[26] 9.B Expenses. The Company agrees . . . to pay, and save you harmless against liability for the payment of, all out-of-pocket expenses arising in connection with this transaction, including all taxes, together in each case with interest and penalties, if any, and any income tax payable by you in respect of any reimbursement therefor, which may be payable in respect of the execution and delivery of this Agreement or the execution, delivery or acquisition of any Note issued under or pursuant to this Agreement, all printing costs and the reasonable fees and expenses of your special counsel in connection with this Agreement and any proposed or actual modification thereof or any proposed or actual consent thereunder and the cost and expenses, including reasonable attorneys' fees, incurred by you in enforcing any of your rights hereunder, including without limitation costs and expenses incurred in any bankruptcy proceeding. The obligations of the Company under this paragraph 9B shall survive transfer by you and payment of any Note.
[1] In this opinion, the court refers to Allegheny International, Inc., Sunbeam Corporation, Sunbeam Holdings, Inc., Almet/Lawnlite, Inc., Chemetron Corporation, and ten of the fourteen subsidiaries that filed for chapter 11 relief on May 3, 1988 collectively as the debtor. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1539185/ | 118 B.R. 94 (1990)
In re Kimberly Kaye COX, Debtor.
Richard E. BARBER, Chapter 7 Trustee for Kimberly K. Cox, Plaintiff/Trustee,
v.
KNOX COUNTY SCHOOL EMPLOYEES CREDIT UNION, Defendant/Creditor.
No. 89-80391, Adv. No. 89-8104.
United States Bankruptcy Court, C.D. Illinois.
August 15, 1990.
Barry M. Barash, Galesburg, Ill., for plaintiff/trustee.
Francis Van Hooreweghe, John P. Harris, Moline, Ill., for defendant/creditor.
OPINION
WILLIAM V. ALTENBERGER, Bankruptcy Judge.
The facts in this matter are not disputed, and the Plaintiff and the Defendant filed cross Motions for Summary Judgment. The Debtor's mother and father (PARENTS) were indebted to the Defendant. They wanted to borrow additional funds secured by their residence, but could not, as such additional borrowing would exceed the Defendant's internal lending limits. The Defendant's then manager suggested that they could avoid the internal lending limits by conveying title to their residence *95 to the Debtor and the Debtor borrowing the funds.
The PARENTS followed this suggestion and conveyed the real estate to the Debtor, who, in turn, made the application for a loan secured by the residence. The Defendant gave the Debtor Truth in Lending disclosures, but did not give the required truth in lending right of rescission notice. The loan was completed, with the PARENTS receiving the loan proceeds. The PARENTS continued to live in the residence, paid the taxes and insurance, and started making the payments on the secured loan.
Thereafter, the Debtor filed a Chapter 7 proceeding, and her Trustee filed a twocount complaint against the Defendant. Count I alleged that the annual percentage rate disclosure was inaccurate. This Court found the disclosure to be inaccurate, and the Defendant appealed, which appeal is still pending. Count II sought to rescind the transaction because the Defendant failed to give the Debtor or the PARENTS rescission notices required by the Truth in Lending Act, 15 U.S.C. Section 1835(a), and Regulation Z, Section 226.19(a).[1] Subsequently, without amending the factual allegations of the complaint, the Trustee added the PARENTS as Defendants. The PARENTS were served, but never filed a responsive pleading.
The Trustee's goal is to obtain the residence free and clear of the Defendant's mortgage. In order to fully succeed, the Trustee has two hurdles to clear. First, he must establish that the Debtor is the sole owner of the residence, free of any interest her PARENTS might claim; and, second, avoid the mortgage lien of the Defendant. The Defendant argues that the residence is not part of the Debtor's estate, because the Debtor merely holds a bare legal title for the benefit of her PARENTS and that the Court does not even need to consider the alleged failure to give the right of rescission notice. In response, the Trustee takes the position that title is in the Debtor and that the Defendant is estopped to deny that the Debtor holds title for her own benefit. Although the complaint does not refer to Section 544 of the Bankruptcy Code, 11 U.S.C. Section 544, which is commonly referred to as a "strong-arm clause", in his arguments to the Court, the Trustee indicated that he was also relying on that section of the Bankruptcy Code.
The Briefs and Arguments have been exclusively directed to the first hurdle and have totally ignored the second. However, it is more expeditious to resolve Count II through a consideration of the second hurdle and whether the Defendant complied with the truth in lending right of rescission notice requirement, than through a consideration of the more complex issue of whether the Debtor held title to the residence free of all claims of her PARENTS, or if she held title subject to a constructive or resulting trust for the benefit of her PARENTS.
Both the Truth in Lending Act and Regulation Z make it quite clear that the right of rescission is applicable only to "the principal dwelling" of the person to whom credit is extended. A borrower who owns real estate which is not his or her "principal dwelling" is not entitled to notice of the right of rescission. Scott v. Long Island Savings Bank, (D.C.E.D.N.Y.1989), 1989 WL 119514, 1989 U.S. Dist. Lexis 15720, CCH Credit Guide, para. 95,735. In this case, even assuming that the Debtor is the owner of the residence, it is not her principal residence. She resides elsewhere and her PARENTS reside in the residence. Therefore, she was not entitled, nor is her Trustee in Bankruptcy entitled, to rescind the transaction. Nor can the Trustee bring an action to rescind the transaction on behalf of the PARENTS who are not in bankruptcy. His rights are limited to those that he received through the Debtor.
Even though the Trustee has no right to rescind the transaction, in theory he has a right to try to recover the real estate from the PARENTS, and if there is any equity *96 over and above the mortgage, to recover that equity for the benefit of the Debtor's creditors. The Trustee's arguments as to who owned the residence were made to the Court as part of the Trustee's attack on the Defendant. They were not directly made against the PARENTS. Although the PARENTS have been served, there is nothing in the complaint to indicate that the Trustee is seeking to eliminate the PARENTS' interest in the residence and the Defendant is only interested in protecting the mortgage lien. Therefore, the Court does not feel that any order, vis-a-vis the PARENTS, is appropriate until the pleadings are amended to give the PARENTS an opportunity to present their position.
This Opinion is to serve as Findings of Fact and Conclusions of Law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure.
See written Order.
ORDER
For the reasons set forth in an Opinion filed this day;
IT IS, THEREFORE, ORDERED that Count II of the Plaintiff's Complaint is hereby dismissed with prejudice.
NOTES
[1] The Truth in Lending Regulations, Regulation Z, can be found at 12 CFR, Section 226.19(a); 15 U.S.C.A., following Section 1700. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/419943/ | 709 F.2d 939
113 L.R.R.M. (BNA) 3700, 98 Lab.Cas. P 10,312
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.George BLACK, an individual doing business as Rayel ElectricCompany and Rayel Enterprises, Inc., d/b/a RayelElectric Co., Respondents.
No. 82-4233.
United States Court of Appeals,Fifth Circuit.
July 18, 1983.
Elliott Moore, Andrew F. Tranovich, Deputy Associate Gen. Counsel, N.L.R.B., Washington, D.C., for petitioner.
Joel J. Reinfeld, Houston, Tex., for respondents.
Application for Enforcement of an Order of the National Labor Relations Board.
Before RUBIN, GARZA and WILLIAMS, Circuit Judges.
PER CURIAM:
1
This proceeding is a petition by the National Labor Relations Board for enforcement of an order finding respondents guilty of unfair labor practices. 29 U.S.C. Sec. 160(e). The order found the Rayel Companies (Company) and their owner, George Black, had violated Section 8(a)(1) and (5), 29 U.S.C. Sec. 158(a)(1), (5), by repudiating the collective bargaining agreement the company had with Local 716, International Brotherhood of Electrical Workers (Union) and by refusing to furnish the Union with information necessary to fulfill its duties as the collective bargaining representative of the Company's employees. We agree with the Board's finding that the pre-hire agreement1 signed by the Company in January 1978 bound it to the terms of the 1977-79 labor agreement between the Union and the National Electrical Contractors Association (NECA).2 Further, we agree with the Board's conclusion that since the Company failed to provide the requisite notice to withdraw its designation of NECA as its bargaining representative prior to the expiration of the 1977-79 agreement, it was bound by the terms of the 1979-81 agreement as well.3 We also conclude that the Board's finding that the Union had attained majority status among the Company's stable complement of employees in 1978 is supported by substantial evidence.4 Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951). Hence, we affirm the Board's conclusion that the company could not unilaterally renounce the 1979-81 agreement. Accordingly, we grant enforcement of the Board's order running to the date of the expiration of the 1979-81 agreement. The Board's findings of fact and conclusions of law specifically cover only this time period.
2
From our reading of the Administrative Law Judge's Order of June 1981, as adopted by the Board, as well as from the representations made at oral argument, the Board's order apparently was intended to cover only the time up to the expiration of the contract in 1981. However, because of the passage of time since the issuance of the order, the order as written might arguably be read to extend its remedial requirements beyond the expiration of the 1981 agreement. Since the Board has not yet been presented with nor passed upon any claims which might be raised by the Union for the post-1981 agreement period, we do not speculate as to the propriety of any relief which might subsequently be imposed by the Board.5 To the extent that the Board's order might be read to extend beyond the expiration of the 1979-81 agreement, we have no power to review the order. We grant enforcement of the Board's order in accordance with the limitation stated in this opinion.
3
ORDER ENFORCED.
1
Section 8(f) of the National Labor Relations Act, 29 U.S.C. Sec. 158(f), allows construction industry employers and unions to enter into agreements setting the terms and conditions of employment for those hired by the employer without the union's majority status having first been established pursuant to Sec. 9 of the Act, 29 U.S.C. Sec. 159. The Act's authorization of these "pre-hire" agreements in the construction industry recognizes that the "uniquely temporary, transitory and sometimes seasonal nature of much of the employment" in this industry might, in the absence of such agreements, unduly hinder both unions seeking to organize, and employers needing to know the cost and availability of workers, in this industry. Jim McNeff, Inc. v. Todd, --- U.S. ----, 103 S.Ct. 1753, 1756, 75 L.Ed.2d 830 (1983). See NLRB v. Local 103, International Association of Bridge, Structural and Ornamental Ironworkers (Higdon), 434 U.S. 335, 98 S.Ct. 651, 54 L.Ed.2d 586 (1978)
The pre-hire agreement entered into in the immediate case, "Letter of Assent-A," provided:
In signing this Letter of Assent, the undersigned firm does hereby authorize the SOUTHEAST TEXAS CHAPTER, NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., as its collective bargaining representative for all matters contained in or pertaining to the current approved Inside Labor Agreement between the SOUTHEAST TEXAS CHAPTER, NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., and LOCAL UNION 716, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS. This authorization, in compliance with the current approved Labor Agreement, shall become effective on the 1st day of June, 1977. It shall remain in effect until terminated by the undersigned employer giving written notice to the SOUTHEAST TEXAS CHAPTER, NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., and to the LOCAL UNION at least one hundred fifty (150) days prior to the then current anniversary date of the aforementioned approved Labor Agreement. (emphasis added)
2
At oral argument, the Company conceded that it was bound by the 1977-79 labor agreement between the Union and NECA
3
Accord Nelson Electric v. NLRB, 638 F.2d 965 (6th Cir.1981). Letter of Assent-A required at least 150 days notice prior to the expiration of the 1977-79 agreement, in writing to the Union and NECA, before the Company could withdraw its authorization of NECA as its collective bargaining representative. The 1977-79 Agreement expired on May 29, 1979. The company did not notify either the Union or NECA in writing of its intent to withdraw its authorization until after this expiration date, when it tendered notice to the Union in October 1979 and NECA in July 1980
4
The Board found that majority status was obtained by February 17, 1978 or, at the latest, by June 25, 1978. As far as this finding includes certain factual determinations, i.e., counting union as opposed to non-union members and determining supervisory status, the Board's determination is amply supported by substantial evidence on the record as a whole. As far as this determination is based upon implicit findings of law, i.e., that union membership in this case was conclusive of union support, the Board's determination is reasonable and consistent with the Act
5
At oral argument, the Board stated that, to date, the Union had not filed any claims relating to the post-1981 agreement period. The Board speculated that were such claims presented, it would find that the Company was not bound by the subsequent agreement entered into between the Union and NECA, but that the Company remained obligated to bargain with the Union after the expiration of the 1979-81 agreement. Cf. NLRB v. Haberman Construction Co., 641 F.2d 351 (5th Cir.1981) (en banc) (in concluding that in the case of "project-by-project" employers, majority status must be redetermined at each job site and is not presumed, the Court left open the question of whether a presumption of majority status might properly attach to a "stable workforce" employer). These speculations are not properly before us on appeal | 01-03-2023 | 08-23-2011 |
https://www.courtlistener.com/api/rest/v3/opinions/1558520/ | 22 So.3d 74 (2009)
McGREGOR
v.
STATE.
No. 1D09-1864.
District Court of Appeal of Florida, First District.
October 27, 2009.
Decision without published opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558521/ | 22 So.3d 550 (2009)
MANGANARO
v.
STATE.
No. 2D08-2726.
District Court of Appeal of Florida, Second District.
November 13, 2009.
Decision Without Published Opinion Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919687/ | 34 Md. App. 571 (1977)
369 A.2d 105
ELEANORE RUTH WALKER
v.
GEORGE ROBERT HALL ET AL.
No. 313, September Term, 1976.
Court of Special Appeals of Maryland.
Decided February 3, 1977.
*573 The cause was argued before MORTON, DAVIDSON and MOORE, JJ.
Michael P. Crocker, with whom was James B. Wheatley on the brief, for appellant.
Richard C. Murray, with whom were James H. Cook and George E. Campbell on the brief, for appellees George Robert Hall and Dennis George Hall.
C. Russell Fields, with whom were Keyes & Simmons on the brief, for appellee George Henry Becker.
Robert K. Nead for remaining appellees.
MOORE, J., delivered the opinion of the Court.
The collision of two automobiles on a clear Saturday afternoon in November, 1969, spawned three separate tort actions involving multiple parties and claims. These suits were ultimately consolidated for a trial which commenced before a jury some six years later in the Circuit Court for Baltimore County (Brannan, J.), and consumed nine days.[1]
*574 The first party to file was Eleanore Ruth Walker, sole appellant here, then 58 years of age and the driver of a 1963 white Mercury Marauder. Her original declaration named as defendants the driver of a 1968 red Mustang, Dennis George Hall, then 18, and his father.[2] It was these two vehicles which collided at the intersection of Old Philadelphia Road (Route 7) and Pfeffers Road in Baltimore County. The accident occurred as Hall was proceeding southbound, with two passengers, and Mrs. Walker, coming from the opposite direction, driving alone, was attempting to negotiate a left-hand (west) turn into Pfeffers Road.
Young Hall and his father entered general issue pleas and filed a counterclaim in February, 1970. More than two and a half years later, Mrs. Walker obtained leave of court to file an amended declaration on the ground that Hall had been engaged in a motor vehicle race with a third car, a 1969 Dodge Challenger, operated by his friend, William Charles Martin, then 18, carrying three teenage male passengers. The new Dodge was owned by George Henry Becker, then 21. He was, however, riding with his girlfriend, Sharon Walczak, then 16, in Hall's Mustang.[3] Appellant's amended declaration, filed on November 27, 1972, named fifteen parties defendant, including Hall, Becker, Martin and the three passengers.[4] Previously, in March 1970, Becker had brought a negligence action against Mrs. Walker only, for personal injuries sustained in the accident. (Appellant thereupon filed a third party claim against Dennis Hall and his father.) In June, 1970, Sharon Walczak had filed a similar action against the Halls and Mrs. Walker.
*575 When the three consolidated actions[5] finally came on for trial, Mrs. Walker's proof consisted of over sixty exhibits, her own testimony and that of her daughter, who resided two and a half miles from the place of the collision. In addition, appellant's counsel read into evidence major portions of depositions taken in 1972 and 1973 of four of the appellees and of a witness, Claude F. Kilgore, a resident of Virginia, who previously resided on Old Philadelphia Road near Pfeffers Road at the time of the accident, as well as answers by Martin's passengers to interrogatories propounded by appellant. The trial court, at the close of plaintiff's case, granted directed verdicts in favor of Martin and his passengers. A verdict was also directed in favor of Becker at the close of all the evidence. There remained for determination by the jury Mrs. Walker's suit against Hall and the latter's counterclaim, Becker's suit against appellant, in which Hall had been impleaded, and Miss Walczak's action against appellant and Hall.
The appellees presented the live testimony of Dennis Hall, George Becker and Sharon Walczak. In addition, the investigating officer, Trooper Thomas Myrick, and one Calvin Leary were called. (The latter, a member of the Baltimore County Fire Department, gave testimony contradictory of critical aspects of the deposition of appellant's witness, Kilgore.)
With the concurrence of counsel for all parties, the respective cases were submitted to the jury by the trial court upon specific issues, the form of the verdict being in part as follows:
"1. Was Eleanore Walker negligent and, if so, was that negligence a proximate cause of the accident?
Yes____ No____
*576 2. Was Dennis Hall negligent and, if so, was that negligence a proximate cause of the accident?
Yes____ No____
3. Was George Becker guilty of any negligence which was the proximate cause of his injuries?
Yes____ No____
4. Was Sharon Walczak guilty of any negligence which was the proximate cause of her injuries?
Yes____ No____
(Three additional questions were also submitted to the jury relating to money damages.) The jury found negligence on the part of the appellant and no negligence on the part of Dennis Hall, George Becker or Sharon Walczak. Damages against appellant were awarded in favor of the appellees as follows: Becker $100, Walczak $2,500,[6] Hall $2080.
In support of her appeal, appellant has put forth some fourteen assignments of error with respect to the trial court's rulings and instructions and the denial of her motion for a new trial. Particular emphasis is placed upon alleged error in the ruling by the trial court that the evidence on the issue of the existence or not of a motor vehicle race was insufficient. On this central question, as well as on subsidiary issues properly before us, we find no error. Relevant facts are stated below in our consideration of appellant's contentions.
I The Alleged Motor Vehicle Race
The six youths and the 16 year old young lady involved in this case were all residents of Rosedale in Baltimore County. They were schoolmates, social friends and one or two were related. Some time around noon on the date of the accident, November 29, 1969, they met at the Village Sub Shop in Rosedale. There they decided to drive to Singer Run Park in *577 Harford County, where appellee, William Charles Martin, intended to conduct a search for his wallet which had been lost or stolen in the Park the day before. As previously stated, Becker and his girlfriend, Sharon Walczak, rode with Dennis Hall in the latter's Mustang, while Becker gave his keys to Martin to drive his new Dodge to the Park with the three other boys. Prior to leaving, Becker placed a six-pack of beer in Hall's car. The group remained at Singer Run Park for one or two hours. Hall, according to his deposition, consumed two beers during that time. (Becker stated in his deposition that he had had two beers in Rosedale before they left.)
Becker's rust-orange Dodge Challenger, with Martin at the wheel, accompanied by the three passengers, departed from Singer Run Park ahead of the Hall vehicle. The two groups were returning to Rosedale with no special plans for the balance of the afternoon and evening except that they did intend to get together again. A two or three mile unpaved road called Winter Run Road led from the Park area to Route 7. Hall and Martin agreed in their testimony that each was able to see the other while they were traversing this road and, for a time, after the cars turned right onto Route 7, heading south to Rosedale. Route 7, also known as Old Philadelphia Road, is a two-lane, undulating highway. Martin testified in his deposition, read at trial, that after he and his companions passed the intersection with Pfeffers Road, someone noticed that Hall's Mustang was no longer in back of them. Martin pulled off the road for a few minutes but then proceeded back to Rosedale on Route 7, surmising that Hall was returning by another route. Becker and his date, Sharon, testified at the trial that they were reading magazines during the trip back with Hall and were not attentive to the car ahead.
Appellant's witness, Claude Kilgore, stated in his deposition that at approximately 3:00 p.m. on the day in question, he was at his mailbox near the shoulder of Route 7, having walked there from his residence located approximately 100 feet from Route 7, just north of its intersection with Pfeffers Road. He stated that while there *578 he observed, in a period of about 20 seconds, three cars proceeding southbound. He said that the first car was going about 70 m.p.h. This was followed by a slow-moving, light colored vehicle which he thought was one of the smaller Fords. Immediately behind the second vehicle, according to Kilgore, there came a red Mustang "also going at such a high rate of speed that automatically I took it for granted that he was racing with car number one." He estimated the Mustang's speed as about the same as that of the first vehicle. He also stated that the red Mustang moved over the solid yellow line dividing the northbound and southbound lane, passing the slow-moving vehicle and then proceeded back into its own lane. He observed the back of the Mustang until it left his sight at the crest of a hill just before the intersection of Pfeffers Road. After it disappeared over the crest, he heard the collision and observed smoke.
The investigating police officer, Trooper Myrick, testified that the Mustang left 109 feet of skidmarks and its front hood left the vehicle upon impact, traveling a distance of 75 feet and striking a house on the west side of Route 7. The trooper testified that Dennis Hall "appeared to have an odor of an alcoholic beverage", which he noted on his report, but it was not sufficient to sustain a charge of driving while impaired.
On the subject of speed, Hall and Martin maintained that they kept generally within the 40 mile limit posted for Route 7. Appellees also offered the testimony of Calvin Leary, the Baltimore County fireman who was going southbound on Route 7 after working a part-time job in Harford County. Leary came upon the accident scene within minutes after the occurrence. He was driving a 1965 white Ford Comet and testified that, while driving at approximately 40 m.p.h., he observed the red Mustang ahead of him prior to the collision. He continued to observe the Mustang as it climbed the hill toward the intersection with Pfeffers Road until it dropped from view over the crest. At no time, according to Mr. Leary, did the Mustang cross over the line to pass another car. He also testified that the Mustang appeared to be proceeding at his own rate of speed, i.e., within the speed limit.
*579 Appellant's second amended declaration alleged that all the youthful defendants (except Sharon Walczak) were engaged in a race and that all were participants Hall and Martin as racing drivers, the passengers by their presence and "by giving moral support, encouragement and incitement to the drivers of the respective vehicles in which they were racing."
At the time of the accident, the statutory prohibition against racing or speed contests was Maryland Code, Art. 66 1/2, § 210 (1957, 1967 Repl. Vol.) which provided, inter alia, as follows:
"Racing or speed contest; wager; causing skidding, spinning or excessive noise.
"(a) In general. No person shall operate or drive any vehicle on the public highways of this State in a race or in a speed contest, or on a bet or wager, or in any intentional improper manner so as to cause skidding, spinning of wheels, or excessive noise upon said highway....
"(b) Timekeeper or flagman. No person shall participate as a timekeeper or flagman in any unauthorized race or speed contest on the public streets, roads or highways in the State of Maryland. The race or speed contest need not be for a prize, reward or wager to come within the meaning of this section."[7] (Emphasis added.)
The trial court, at the conclusion of the appellant's case granted a motion for a directed verdict made on behalf of Martin and his three passengers.[8] The court stated in part:
"I have no problem with Hall driving at a high rate of speed, but it seems to me that that is not enough. *580 It seems to me the mere fact that they are friends, it seems to me the mere fact that both were exceeding the speed limit, none of these even taken together in my judgment amounts to anything other than surmise and speculation as to the existence of a race."
Appellant vigorously contends that the court erred in granting the motion and also in later specifically instructing the jury that "there was no legally sufficient evidence in this case that there was a race."
It is a well-settled rule, applicable in Maryland, that the racing of motor vehicles on a public highway is negligence. All who engage in a race are liable for injury sustained by a third person as a consequence of the race, irrespective of which racing car actually inflicted the injury or of the fact that the injured person was a passenger in one of the cars. Haddock v. Stewart, 232 Md. 139, 142, 192 A.2d 105, 107 (1963). See United Railways & Electric Co. v. Perkins, 152 Md. 105, 136 A. 50 (1927).
In Haddock, the court affirmed the granting of a directed verdict, on the issue of racing, in favor of the defendant at the close of the plaintiff's case. The plaintiff-appellant was proceeding north on State Route 5 toward Waldorf in Charles County, directly behind another vehicle driven by a Lieutenant Commander Baker; each car was running at about 45 m.p.h. As the two cars proceeded around a curve, a southbound vehicle, driven by Thomas Hill, traveling in excess of the 50 m.p.h. limit, swerved out of control and struck both the Baker and Haddock cars. As a result of the accident, Baker and Hill were killed. Haddock contended that the defendant-appellee, Stewart, had engaged in a race with Hill. Stewart was behind the Hill car at the time of the accident. Stewart testified that Hill, at several points along the highway, had pulled alongside his vehicle, on the 2-lane road, and signaled him to race. Each time Hill would speed up in anticipation of Stewart's response. However, Stewart emphatically denied accepting the challenge and insisted that he kept within the 50 m.p.h. speed limit.
In an attempt to impeach Stewart, appellant's counsel *581 introduced a statement allegedly signed by Stewart a week after the accident, in which he admitted to traveling between 60-70 m.p.h. Also, at trial, Stewart admitted passing several cars along the route traveled by both Hill and himself. As stated by Judge Sybert, the sole question raised by the appeal was "whether there was sufficient evidence, viewed in the light most favorable to the plaintiff, that the defendant Stewart gave assistance or encouragement to the tortious conduct of the deceased, Hill, so as to have warranted the submission of the issue to the jury." 232 Md. at 142, 192 A.2d at 107.
In affirming the trial court's action, the court adopted in part the language of the trial judge, Macgill, J:
"All you have really is some evidence of excessive speed or speed greater than the speed limit on the part of Mr. Stewart at certain points along the highway. I notice reference was constantly made to the fact that there was no occasion unless Mr. Stewart was engaged in racing for him to pass the other cars.... Go out on the highway, any time you want, you see cars speeding up and going sixty to pass other cars; they're not necessarily engaging in a race.... There isn't any direct evidence that he [encouraged Hill to race]. It may be a suspicious matter. We can't let this matter go to the Jury to speculate...." 232 Md. at 143-44, 192 A.2d at 107-08.
In the instant case, appellant relied at trial upon an asserted tendency of teenagers to engage in racing and pointed to the presence in the Hall vehicle of a tachometer and that it was equipped with "lifters." At trial appellant also emphasized the longstanding relationship between the seven youths and placed great weight, as she does on appeal, upon the deposition testimony of Mr. Kilgore. It is our conclusion, viewing the evidence as we must in the light most favorable to the appellant, that what was presented at trial constituted at most evidence of excessive speed and perhaps reckless driving on the part of appellee Hall, the *582 operator of the red Mustang. (We observe, however, that the jury found no negligence on his part and, indeed, awarded him compensation for personal injuries and property damages against the appellant.) Unlike the facts in Haddock, supra, we do not have a situation of conceded racing on the part of one vehicle. In this case, there is no evidence of a speed contest other than Kilgore's exclamation that "automatically I took it for granted that he was racing with car number one." This statement with respect to racing was obviously a conclusory, "knee-jerk" type reaction and is not legally sufficient evidence of "challenge and response." See Bierczynski v. Rogers, 239 A.2d 218 (Del. 1968); Nelson v. Nason, 177 N.E.2d 887 (Mass. 1961). As stated by the New York Supreme Court, Appellate Division, in Finn v. Morgan, 362 N.Y.S.2d 292, 298 (1974),
"Speeding and racing are not concomitant acts, and proof of speeding alone did not prove a race. The gist of racing is competition and the facts must support an inference of some agreement to race." (Emphasis added.)
In support of her argument, appellant relies on the cases of Kres v. Maryland Automobile Insurance Fund, 273 Md. 289, 329 A.2d 44 (1974); Nelson v. Nelson, supra; Commonwealth v. Looser, 156 A.2d 905 (Pa. 1959); Bybee v. Shanks, 253 S.W.2d 257 (Ky. 1952). Kres, while it dealt with the racing question, was concerned with whether the plaintiff had presented sufficient evidence of a speed contest to state a "cause of action" to sue the Fund, within the meaning of Art. 48A, § 243 H., Md.Code (1957, 1972 Repl. Vol.), and is not apposite. In detailing the quantum of evidence needed to state a "cause of action," Judge Digges wrote, it is "not the presentation of such evidence as would meet every probative test of a prima facie negligence cause." 273 Md. at 292, 329 A.2d at 46. In order to withstand a motion for directed verdict, the evidence must amount to more than a "mere scintilla of evidence, amounting to no more than surmise, possibility, or conjecture." Brock v. *583 Sorrell, 15 Md. App. 1, 6, 288 A.2d 640, 643 (1972), quoting Fowler v. Smith, 240 Md. 240, 247, 213 A.2d 549, 554 (1965); Md. Rules of Procedure, Rule 552. The out-of-state cases relied upon by appellant were dealt with in Haddock, and it is sufficient to note that in each case there was either direct evidence of participation or encouragement or an ample record to support a reasonable inference of such participation. We find no error in the trial court's rulings.
II Alleged Liability of Appellee Becker
Our holding with respect to the racing issue disposes of appellant's contention that appellee Becker was not entitled to a directed verdict since he was a participant in the alleged race.
A second asserted ground of liability on the part of Becker, also lacking in substance, is that he "obtained" liquor for the minor, Dennis Hall, in violation of Maryland Code, Art. 27, § 401 (1957, 1967 Repl. Vol.).[9] The evidence upon which appellant presumably relies is Becker's own testimony that he obtained a 6-pack of beer from his mother's refrigerator that morning and placed some of it in Hall's Mustang. Appellant contends that it was "under the influence of this beer that Hall operated his car wildly and in violation of six separate motor vehicle statutes...."
The foregoing statutory provision then read in pertinent part:
"Any person who obtains any spirituous or fermented liquors from any other person licensed to sell the same for any minor or person under twenty-one years of age, knowing him to be such, to be drunk by said minor or person under twenty-one years of age, shall be deemed guilty of a misdemeanor...."
In our judgment the trial court correctly found the above *584 statute inapplicable.[10] There was no evidence that Becker obtained the beer from a licensee for a minor as the statute provides. Furthermore, Becker's conduct in providing Hall with beer could not have been the proximate cause of the accident, even if the statute were applicable.[11]See States v. Hatfield, 197 Md. 249, 254-55, 78 A.2d 754, 756-57 (1951). Beyond this, the short answer to Mrs. Walker's contention is that the jury found Hall, notwithstanding evidence of some drinking, to be without fault.
III Alleged Errors in the Trial Court's Charge
a) Contributory Negligence as a Defense to "Willful and Wanton Misconduct or Reckless Disregard" of Human Life.
Appellant contends that the trial court erroneously failed to charge the jury that finding the appellant guilty of contributory negligence would not bar her recovery if the jury determined the appellees' conduct to constitute "willful and wanton misconduct or reckless disregard." See Denny v. Seaboard Lacquer, Inc., 487 F.2d 485 (4th Cir., 1971). However, the jury found by its special verdict that Hall was not guilty of any negligence. Logically, any error in failing to instruct as to "willful or wanton misconduct" is rendered harmless by the jury's determination that no simple negligence existed. See Franceschina v. Hope, 267 Md. 632, 645, 298 A.2d 400, 407 (1973); see also Havens v. Schaffer, 217 Md. 323, 327, 142 A.2d 824, 826 (1958).
b) Failure to Instruct on the Issue of Intoxication
The evidence at trial disclosed that Hall had consumed two beers prior to the accident and that beer cans were found by Trooper Myrick in Hall's Mustang. Appellant contends that the failure of the trial judge to instruct the *585 jury on the provisions of Maryland Code, Art. 66 1/2, § 11-902, relating to driving while "under the influence," was error.
Appellant overlooks the significance of Trooper Myrick's testimony that he smelled alcohol on Hall's breath yet concluded that "I didn't feel that he had enough to be charged with it...." A similar issue was before the Court of Appeals in Alston v. Forsythe, 226 Md. 121, 172 A.2d 474 (1961). In Alston, the court affirmed a judgment for the defendant despite the trial court's actions in not instructing the jury concerning the provisions of the predecessor section of Art. 66 1/2, § 11-902, under circumstances where the defendant had admitted to drinking two beers prior to the accident. The investigating officer in Alston, as in the instant case, noted the defendant's drinking yet failed to charge him with a violation. The court stated:
"There was no evidence to show that the defendant was driving his automobile while in a condition produced by `drinking to the extent of probably affecting one's judgment and discretion or probably affecting one's nervous system to the extent that there is a failure of normal coordination, although not amounting to intoxication.'" 226 Md. at 132, 172 A.2d at 479.
While the jury was free to consider the evidence of Hall's drinking and the officer's findings, we do not consider the failure to instruct as error. As Chief Judge Brune stated in Alston:
"We find no error in the court's not referring in the charge to the defendant's having had some beer in the amount and at the time shown by the evidence or in omitting any instruction based upon the effect of driving while under the influence of intoxicating liquor." 226 Md. at 134, 172 A.2d at 480.
*586 c) Trial Court's Characterization of the Consolidated Suits as Based on Negligence
The trial judge, in his charge to the jury, characterized the consolidated actions as being premised on negligence. Appellant contends that this statement was erroneous because it failed to take into account her allegations that the appellees were guilty of "willful and wanton misconduct and reckless disregard" for human life. When this excerpted instruction is put into the context of the court's entire charge, it can be seen that the court was discussing the three personal injury actions, not merely the appellant's suit. It should be noted that both Becker and Walczak's claims against the appellant were indeed founded upon acts of simple negligence. While Mrs. Walker's case did involve the further allegation of "wanton and willful misconduct," this fact was expressly mentioned by the trial judge in a later instruction concerning punitive damages. In discussing Mrs. Walker's claim for exemplary damages, the court stated, "if a plaintiff is injured or damaged as a result of extraordinary or outrageous conduct, which, in your opinion, constitutes a wanton or reckless disregard for human life ... [she] may be awarded [punitive damages] ...." Under these circumstances, we find appellant's claim devoid of merit.
d) Duties of a Left-Turning Vehicle
Appellant predicates error upon two of the court's instructions concerning the duties of a left-turning vehicle. The first instruction was a paraphrase of former Art. 66 1/2, § 225B, now Art. 66 1/2, § 11-601 (2), involving the duty of a left-turning vehicle to approach the intersection "in that portion of the right half of the roadway nearest the center line thereof and after entering the intersection the left turn shall be made so as to leave the intersection to the right of the center line of the roadway being entered." The appellant expressly stated at trial that she "cut over into the left hand (eastbound) [of Pfeffers Road] to try to get out of his way." Under these circumstances, we hold that the above instruction was supported by the evidence.
Additionally, appellant asserts error in the failure of the trial judge to give a requested instruction with respect to the *587 obligations of a driver attempting to turn left at an intersection to observe oppositely-bound traffic and the reciprocal duties of the latter. Our review of the record establishes that the court's charge substantially covered the requested instruction and we therefore find no error. See Whoolery v. Hagan, 247 Md. 699, 708, 234 A.2d 605, 610 (1967).
e) Duties of a Vehicle Traveling Upon a Highway Controlled by a Stop-Sign
Although the appellant unequivocally stated that she had been traveling north on Route 7 for several miles prior to her attempted left-turn to Pfeffers Road, the trial judge gave an instruction concerning the duty imposed on a vehicle traveling upon a highway controlled by a stop-sign. The facts are, as disclosed by the testimony of Trooper Myrick, that Pfeffers Road is almost directly opposite Jones Road, the latter being only a few feet north, and although there is no stop-sign on Route 7, Jones Road traffic is controlled by such a sign.
Both Hall and Walczak testified that when they first observed the Walker vehicle it appeared to be "coming straight across" the roadway, i.e., from Jones Road into Pfeffers Road. Additionally, Hall's deposition, read by appellant's counsel at trial, disclosed that Hall had told the officer investigating the accident, shortly after its occurrence, that Mrs. Walker's car apparently came across Route 7 from Jones Road. The appellant testified that she "didn't come out of Jones Road, as the trooper had reported in his accident report." On the basis of this conflicting testimony, we find the challenged instruction unexceptionable.
f) Proximate Cause, Use of Word "May"
In the course of the court's instructions, the subject of proximate cause was, of course, covered and indeed two illustrations were used, one applicable to appellant and the other to Dennis Hall. (The court made it clear that no emphasis for or against either driver was intended.) With *588 respect to Hall, the court stated that if the jury "find[s] Dennis Hall was operating his vehicle at a greater speed than was reasonable and prudent ... and that such speed was negligence that directly caused the collision," without any contributory negligence on the part of Mrs. Walker, "then you may find that excessive speed is a proximate cause of the accident." (Emphasis added.)
As a converse example the court instructed that "if you find that Eleanore Walker proceeded across the northbound [sic] lane of Route 7 at a time when the approaching vehicle of Dennis Hall's was in such proximity that there would be imminent danger of an accident and that Mrs. Walker's act of crossing the northbound [sic] lane ... was negligence that directly caused the collision ... and ... the plaintiff Hall's damages and injuries," without any contributory negligence on his part, "then you may find that the making of a turn under those circumstances, is a proximate cause of the accident." (Emphasis added.)
Appellant here contends that the court's instruction "set up all the elements requiring a verdict for appellant, but then contradictory and in effect [sic] told the jury that they had the permission or discretion by the use of the word `may', to ignore the law."
We observe that the court went on in the instructions to inform the jury that there "may be more than one proximate cause of an accident" and that what had been related to the jury by way of example applied with equal force to the statutory rules of the road previously considered. Specifically, the court pointed out that if the jury should find that one or more of the drivers violated any of the rules of the road and that such violation was a proximate cause of the accident, "then you should answer the issues according to your findings."
In this entire context we find totally without substance appellant's claim of reversible error in the employment by the trial court of the word "may."
g) Instruction Relating to Damages
Appellant also contends that the court erred in its *589 instruction relating to punitive damages. In the light of our disposition of appellant's claims relating to liability this assertion of error becomes moot. See Wolf v. Levitt & Sons, Inc., 267 Md. 623, 298 A.2d 374 (1973); Green v. Washington Suburban Sanitary Commission, 259 Md. 206, 269 A.2d 815 (1970).[12]
IV Alleged Improper Allocation of Peremptory Challenges
Prior to the selection of the jury the trial court conferred with counsel concerning the number of peremptory challenges to be allocated in this multiple party trial. The court grouped the respective interests involved and also made provision for two alternate jurors. As a result, appellant received five peremptory challenges in her capacity as a plaintiff and five as a defendant. The defendants below and the other parties plaintiff in the consolidated actions received a combined total of twenty strikes. It is now contended, objection having been made below, that appellant was denied "due process and equal protection" on the ground that the trial court granted to appellees an unfair advantage in that they received on a combined basis twenty peremptory challenges whereas appellant received ten.[13]
It is, of course, elementary that under the Maryland Rules of Procedure, Rule 543, each party in a civil action may peremptorily strike, without cause, four persons; and that several defendants or several plaintiffs are considered as a *590 single party. Rule 543 a. 3. Additional peremptory strikes are also allowed under prescribed circumstances. Thus, Rule 543 a. 4. provides:
"Additional Peremptory Strikes When Allowed.
Whenever it appears that the trial of an action by a jury involves two or more plaintiffs or two or more defendants having adverse or hostile interests, or involves multiple parties and claims, including third-party claims, whether in a single action or two or more actions consolidated or consolidated for trial, the court may allow additional peremptory strikes, from additional lists of jurors to be prepared by the clerk, but no party shall be allowed more than four such strikes." (Emphasis added.)
In our judgment, the trial court committed no abuse of discretion in his allocation of the peremptory strikes. It was, as already noted, a consolidated proceeding involving not only appellant's action, in which she was also a defendant pursuant to Hall's counterclaim, but there were also involved the independent actions of Hall, Becker and Walczak, as parties plaintiff, in which appellant and Hall were defendants. Although appellant contends in her brief that "multiple parties with common interests must exercise their peremptory challenges collectively," she fails to recognize the essential nature of this proceeding as a consolidated trial of three separate actions and that the plaintiffs Hall, Becker and Walczak could not be deprived by the fact of consolidation of their entitlement as plaintiffs to four peremptory strikes each. Similarly, we think the court acted properly in regarding Martin and his passengers as a separate group entitled to four strikes. Furthermore, in support of her assertion of unequal treatment, appellant cites no concrete element of prejudice in the jury selection process. Specifically, no record was made by her below with respect to any panel member or members whom she was prevented from striking. Indeed, there is nothing before us to indicate the extent to which the peremptory strikes of any *591 of the parties were exercised. In this state of the record, appellant's bald assertion that her constitutional rights were violated must be rejected.
V Denial of Motion for New Trial
One of the grounds asserted by appellant in her motion for new trial was that certain members of the jury had overheard statements at numerous bench conferences. In denying Mrs. Walker's motion, Judge Brannan disclosed that he had personally contacted, by telephone, the twelve panel members and one alternate in an attempt to discover if, in fact, any such conversations were overheard. He expressed complete confidence, as a result of his telephone discussions with the members of the jury, that no juror actually heard any substantive discussion at the bench; and such conferences were not referred to during the jury's deliberations. Appellant contends that the trial judge's action in communicating with the individual jurors was highly improper and constituted grounds for granting a new trial.
We begin with the firmly established rule that the granting or denial of a motion for new trial is a matter within the sound discretion of the trial court. I.O.A. Leasing Corp. v. Merle Thomas Corp., 260 Md. 243, 249, 272 A.2d 1, 4 (1971). The trial court's decision will not be disturbed on appeal where it appears that the lower court fairly expressed its discretion and in the absence of "the most compelling reasons." Mack Trucks, Inc. v. Webber, 29 Md. App. 256, 270, 347 A.2d 865, 873 (1975). The trial judge's discretion extends to matters concerning juror misconduct or other such irregularity in the conduct of others which may affect the jury. See Kasten Construction Co. v. Evans, 260 Md. 536, 548-49, 273 A.2d 90, 96 (1971); Safeway Trails, Inc. v. Smith, 222 Md. 206, 159 A.2d 823 (1960).
Appellant's motion was bottomed upon the affidavits of Lois W. Baker, appellant's daughter, Michael P. Crocker, appellant's counsel, and the appellant. Each affidavit recited that at various stages of the proceedings, from their *592 respective positions in the courtroom, these affiants were able to overhear certain "words" and "bits of conversation" emanating from the bench conferences. Additionally, each affiant claimed that from the jurors' expressions and gestures, the affiants were able to conclude that the jury was, in fact, overhearing parts of the bench conferences.
Our review of the record reveals that at various times during transcribed bench conferences, while the jury was present in court, the trial judge or one of the attorneys had occasion to make reference to loudness of voice.[14] However, in each such instance, the trial judge instructed counsel to lower their voices. Also, at the hearing on appellant's new trial motion, Judge Brannan confirmed that at several stages of the proceedings his concern over the proximity of the jury box to the bench prompted him to order the bailiff to take a position close to the jury during bench conferences. He stated that on each occasion the bailiff reported that the discussions at the bench were not audible to the jury.
While we believe the trial judge's actions in telephoning each juror, without notice to or consent of counsel, was inadvisable and, under different circumstances, could very well mandate a new trial, we find no reversible error here. As we have previously indicated, the trial judge was keenly aware of the problems during trial and adopted certain safeguards to prevent the bench conferences from reaching an audible level from the jury box. Most importantly, a fair reading of Judge Brannan's opinion denying the new trial motion discloses that he did not rely upon his personal communications with the jurors in reaching his decision but rather that his telephone interrogations merely confirmed a conclusion already reached. In addition, appellant's affidavits make no showing that any one or more members of the jury heard any particular statement, much less anything that could be deemed prejudicial. In the absence of such a showing and upon the facts and circumstances *593 involved, we find no abuse of discretion in the denial of appellant's motion for a new trial. Appellant's reliance upon Wash., B. & A.R.R. v. Kimmey, 141 Md. 243, 118 A. 648 (1922) and Beasley v. State, 271 Md. 521, 318 A.2d 501 (1974), is misplaced.
Judgment affirmed; appellant to pay the costs.
NOTES
[1] Appellees, Dennis George Hall and George Henry Becker, were in the military service, later assigned outside the continental limits, and this accounts for a significant part of the delay.
[2] The father was in due course directed out, there being no evidence of an agency relationship.
[3] Becker apparently opted for the relative seclusion of Hall's car, relinquishing his own vehicle to Martin and the three other young men.
[4] The names of the passengers, who are also appellees, are: Schuler, DeNicolis and Kadlec. The parents of certain of the defendants were also named. Becker's girlfried, Miss Walczak, was not included as a defendant. A demurrer to the amended declaration was sustained with leave to amend by order of Judge Kenneth C. Proctor on the ground, among others, that allegations of willfulness on the part of Martin's passengers or of encouragement and assistance in the alleged car racing were necessary. A second amended declaration was filed on September 27, 1973 against the same individuals.
[5] Appellees' motion to consolidate was granted by order of Judge Proctor on February 8, 1972.
[6] Sharon Walczak was awarded $1,500 for her personal injuries and her father, Joseph Walczak, special damages of $1,000.
[7] This provision has been revised and is now Art. 66 1/2, § 11-1116 (1957, 1970 Repl. Vol.).
[8] Appellee Becker was held into the case because appellant also sought to hold Becker liable, as hereinafter noted, not only as a participant in the race but for an alleged violation of Art. 27, § 401, which prohibits obtaining liquor for a minor. Becker's motion for a directed verdict was granted however, at the close of all the evidence.
[9] This provision, as amended, now appears in 1976 Repl. Vol., 1976 Supplement.
[10] Becker contends in his brief that this point was not alleged in appellant's second amended declaration and is not properly before us. We note, however, that the evidence with respect to Becker's providing Hall with beer came in without objection. See Brazerol v. Hudson, 262 Md. 269, 275-76, 277 A.2d 585, 588-89 (1971).
[11] The 1974 amendment to § 401 changes the proscribed age from 21 to 18 years for beer or light wine.
[12] For the same reason, we find it unnecessary to consider appellant's claim of error in the court's refusal to permit the introduction into evidence of appellant's attorney's fees and costs of litigation and of the insurance policies covering the respective appellees. Even if, however, these claims were involved in our determination of this appeal, we would find them to be without substance.
[13] Initially, appellees, Hall, Becker and Walczak, each received four peremptory strikes for a total of twelve; an additional four strikes were allowed to Martin and his passengers as a group. One additional strike was allocated to the aforementioned in connection with the selection of two alternate jurors. This made a total of twenty. Appellant was allocated four as plaintiff and four as a defendant and was also accorded two additional strikes for the alternate jurors. This made a total of ten.
[14] At times, the reference was to the tone of appellant's counsel. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919639/ | 541 A.2d 69 (1988)
OWNER-OPERATORS INDEPENDENT DRIVERS ASSOCIATION OF AMERICA et al.
v.
STATE of Rhode Island et al.
No. 86-166 Appeal.
Supreme Court of Rhode Island.
April 27, 1988.
Anthony F. Muri, Barbara S. Cohen, Goldenberg & Muri, Providence, for plaintiffs.
James E. O'Neil, Atty. Gen., Thomas Dickinson, Asst. Atty. Gen., Marcia McGair Ippolito, Chief Legal Officer, Div. of Taxation, for defendants.
*70 OPINION
MURRAY, Justice.
This is an appeal by the plaintiffs from a Superior Court judgment granting the defendants' motion to dismiss for lack of subject matter jurisdiction. We affirm the judgment below.
On December 20, 1985, Owner-Operators Independent Drivers Association of America (O-OIDAA), a Missouri corporation, and James E. Seibert, doing business as Siebert Farms (Siebert), an unincorporated motor carrier with a principal place of business in Story City, Iowa, filed a class-action complaint in Providence County Superior Court against defendants State of Rhode Island; the Rhode Island Division of Taxation; R. Gary Clark, Tax Administrator for the State of Rhode Island; and Roger Begin, General Treasurer for the State of Rhode Island. The plaintiffs alleged that a fuel-decal-fee statute[1] applied to vehicles registered in other states violated the commerce and privileges and immunities clauses of the United States Constitution. The plaintiffs' complaint sought tax refunds of the fuel fees, a declaratory judgment declaring G.L. 1956 (1982 Reenactment) § 31-36.1-3, as amended by P.L. 1982, ch. 307, § 1, unconstitutional, and a permanent injunction enjoining defendants from collecting fuel-decal fees. In addition plaintiffs claimed relief under 42 U.S.C.A. § 1983 (1981) and sought attorneys' fees and costs.
On January 10, 1986 and January 13, 1986, defendants filed motions to dismiss the complaint for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Superior Court Rules of Civil Procedure and for failure to state a claim upon which relief could be granted pursuant to Rule 12(b)(6). The defendants moved to dismiss plaintiffs' complaint on the grounds that (1) plaintiffs failed to exhaust administrative remedies by filing a refund claim with the tax administrator and (2) the District Court, not the Superior Court, had jurisdiction over the suit as provided by statute.
On January 24, 1986, subsequent to the filing of defendants' motion to dismiss but prior to a hearing on the motion, plaintiffs requested a refund from the tax administrator for fuel-decal fees paid in April and October 1985. The plaintiffs also claimed refunds for all other similarly situated motor carriers who had paid fuel-decal fees. The plaintiffs acknowledged that the refund claims were made to satisfy any procedural requirements and to give the tax administrator a full opportunity to address their constitutional objections to the decal fee. In response the tax administrator characterized plaintiffs' letter as a request for an administrative hearing on the denial of a claim for a refund. The tax administrator informed plaintiffs that rules of administrative hearing procedures do not provide for a class-action type of proceeding; therefore, the request on behalf of other similarly situated motor carriers would not be addressed.
Thereafter on February 18, 1986, a hearing on the motion to dismiss was held. The Superior Court justice noted that the Legislature provided a procedure for a review of procedural appeals in the Division of Taxation. He added that the Legislature took the procedural review "out of the jurisdictional bailiwick of the Superior Court and put it in the District Court." He stated that the threshold question was whether plaintiffs were in the proper forum, notwithstanding the fact that the ultimate relief sought could not be granted by the District Court. In granting defendants' motion to dismiss, the justice stated:
"I have to adhere to the exhaustion of remedies position because of my understanding of my limitations in my jurisdiction, and I cannot embrace [plaintiffs'] *71 argument that I can supercede the action of the Legislature and take this case prior to the time that there has been a determination by the Tax Administrator, and then on appeal to the Superior Court strike that to the District Court, which is provided by statute."
The plaintiffs contend that the Superior Court justice erred in ruling that (1) the District Court has exclusive jurisdiction over plaintiffs' claims for relief, (2) plaintiffs were required to exhaust administrative remedies, and (3) the court lacked jurisdiction over plaintiffs' class action complaint. We do not agree with plaintiffs' contentions.
Prior to reaching the substantive issues set forth above, we note a procedural oversight. The plaintiffs' aver, inter alia, that § 31-36.1-3 is unconstitutional. General Laws 1956 (1985 Reenactment) § 9-30-11 provides in part, "In any proceeding which involves the validity of a * * * statute * * * alleged to be unconstitutional, the attorney-general of the state shall also be served with a copy of the proceeding and be entitled to be heard." The record was devoid of documentation to prove that the Office of the Attorney General was served in compliance with § 9-30-11. We have previously stated that rules relating to service of process must be followed and construed strictly. Brown v. Samiagio, 521 A.2d 119, 121 (R.I. 1987). However, after vigorous inquiry at oral argument plaintiffs' produced documentation of a certificate of service, and in addition counsel from the attorney general's office acknowledged that an attorney had made an appearance at the proceedings below on behalf of the attorney general's office. The appearance by the assistant attorney general was made within the period that an answer was due in response to plaintiffs' complaint. The attorney general has failed to raise the aforementioned issue. Thus, nothing we say shall be construed to disturb our holding in Brown. It is imperative that parties with a necessary interest be apprised of an impending action in order to be afforded an opportunity to present objections. We are satisfied that the procedural objectives were effectuated.
The plaintiffs challenge the constitutionality of § 31-36.1-3, which imposes a fuel-decal fee on vehicles registered in other states. However, the language in the statute excepting vehicles registered in Rhode Island has been excised, thus rendering the underlying claim moot.[2] Turning to the central issue presented in this case, we must decide what court is jurisdictive of this suit. The initial determination requires that we characterize plaintiffs' claim in the context of subject matter. The plaintiffs designate their claim as a constitutional challenge to the validity of a statute and, in addition, seek equitable relief. That being so, plaintiffs, relying on G.L. 1956 (1985 Reenactment) § 8-2-13, conclude that the Superior Court is the proper forum in which to litigate their claim. Section 8-2-13 provides in pertinent part:
"[t]he superior court shall, except as otherwise provided by law, have exclusive original jurisdiction of suits and proceedings of an equitable character and of statutory proceedings following the course of equity. If an action is brought in the superior court which represents an attempt in good faith to invoke the jurisdiction conferred by this section, the superior court shall have jurisdiction of all other actions arising out of the same transaction or occurrence * * *."
Therefore, plaintiffs submit that since the claim is primarily of an equitable character, the Superior Court has exclusive jurisdiction.
To the contrary, defendants characterize plaintiffs' claim primarily as a tax matter in which tax refunds are sought and incidental claims for declaratory and injunctive relief are appended. Thus defendants submit that jurisdiction is otherwise provided by law and resides in the District Court. The defendants set forth the prescribed *72 procedural course for claimants that seek tax refunds and challenge state tax laws. Initially, claimants must commence proceedings at the administrative level in accordance with G.L. 1956 (1984 Reenactment) chapter 35 of title 42, the Administrative Procedures Act. The appellate process of review available to aggrieved individuals subsequent to administrative decisions is set forth in § 8-8-24. That section provides, "Each appeal of a final decision of the tax administrator concerning an assessment, deficiency or otherwise shall be an original, independent proceeding in the nature of a suit in equity to set aside such final decision and shall be tried de novo and without a jury." In addition, defendants assert that the issue of jurisdiction is controlled by § 8-8-3, as amended by P.L. 1985, ch. 492, § 1, which provides in part, "Jurisdiction. (a) The district court shall have exclusive original jurisdiction of: * * * (6) * * * all other actions, proceedings and matters of whatever nature which are or shall be declared to be within the jurisdiction of said court by the laws of the state." Therefore, defendants argue that the action is in the nature of a tax claim and clearly the District Court retains jurisdiction over such proceeding, including the relief sought.
The fuel-decal fee statute, § 31-36.1-3(a), imposed a $10.00 fee for a fuel-identification sticker for all out-of-state motor carriers. The tax administrator's duties included approving applications, issuing identification devices, and collecting the fee. The record discloses that plaintiffs paid fuel-decal fees on April 25, 1985, and October 10, 1985. Thereafter plaintiffs sought a refund of the fees, a declaratory judgment declaring the statute null and void, and a permanent injunction enjoining defendant tax administrator from collecting the fee. In the course of seeking refunds from the tax administrator, plaintiffs were informed that their letter was treated as a request for administrative hearing of a denial of a claim for refund and that requests for other similarly situated motorists would not be addressed. From the aforementioned recitation of facts we are of the opinion that plaintiffs' suit is attributable to the subject of a contested tax matter. In holding the gravamen of plaintiffs' complaint to be a tax matter, we must agree with the Superior Court justice's granting of defendants' motion to dismiss for lack of subject matter jurisdiction.
The appropriate route for challenging the actions of an administrative authority, in this case that of the tax administrator, is delineated in chapter 35 of title 42, the Administrative Procedures Act. The tax administrator assessed and collected the fuel-decal fee in accordance with legislative mandate. The plaintiffs paid the fee and thereafter sought a refund and challenged the constitutionality of the statute. A plaintiff is required to commence a proceeding against the tax administrator for tax refunds, including any additional relief requested. The tax administrator is then required to review the complaint and render a decision. This is the sequence of action mandated by statute. Such procedure presumably preserves an efficient and orderly administration of justice in state agencies.
If a party is aggrieved by an order, act, or decision of an administrative agency and thereupon alleges that all available remedies have been exhausted, that party is entitled to judicial review pursuant to § 42-35-15(a), as amended by P.L. 1986, ch. 281, § 10, which provides in pertinent part, "(a) [a]ny preliminary, procedural, or intermediate agency act or ruling is immediately reviewable in any case in which review of the final agency order would not provide an adequate remedy."
We have noted that the Administrative Procedures Act grants specific authority for judicial review of interlocutory as well as final orders. La Petite Auberge, Inc. v. Rhode Island Commission for Human Rights, 419 A.2d 274, 279 n. 5 (R.I. 1980). We emphasize that the reviewing court should exercise the power to review interlocutory rulings of administrative agencies sparingly in order to avoid inundation by preliminary issues that may ultimately be resolved or become moot in the *73 course of litigation at the administrative level. Id. In the case before us, plaintiffs, following their determination that administrative remedies were not available and further pursuit would amount to a futile exercise, elected judicial review and subsequently instituted proceedings in the Superior Court. We hold, however, that the appropriate forum for judicial review of a decision or ruling by the tax administrator lies in the District Court.
We have held that District Court has sole jurisdiction to entertain a complaint seeking review of the tax administrator with regard to any tax that he is authorized to assess. Old Colony Bank v. Clark, 517 A.2d 249, 251 (R.I. 1986). In addition § 42-35-15(b) provides that "[p]roceedings for review are instituted by filing a complaint * * * where expressly provided by the general laws in the sixth division of the district court * * *." The Legislature conferred power on the District Court to review decisions by the tax administrator upon passage of P.L. 1976, ch. 140, referred to as the Walsh Act. This act lead to a reallocation of jurisdiction that was intended to alleviate a backlog in the Superior Court by transferring certain nonjury proceedings from the Superior Court to the District Court. Furthermore, it has been stated:
"The method and scope of review of decisions of the tax administrator have been completely changed as a result of statutory amendments * * *. The General Assembly enacted P.L. 1984, ch. 183, as an amendment to [chapter 8 of title 8] of the General Laws conferring jurisdiction upon the District Court. The [General Assembly] added 8-8-24 to 32 and provided for a trial de novo in the District Court on any appeal from a final decision of the Tax Administrator concerning an `assessment, deficiency or otherwise.' This appeal under the statute is in the form of an original, independent proceeding in the nature of a suit in equity." J. Weisberger, Rhode Island Appellate Practice 140 (1985).
Having established that § 42-35-15(a)(b) and §§ 8-8-3 and 8-8-24 to-32 (inclusive) gives the District Court exclusive jurisdiction of plaintiffs' challenge to the fuel-decal-fee statute, we now focus on the issue of the relief sought by plaintiffs.
The plaintiffs requested refunds of fees paid, a declaratory judgment declaring the fuel-decal fees unconstitutional, and a permanent injunction prohibiting the enforcement and collection of the fees. The plaintiffs contend that Superior Court has jurisdiction over their claims for equitable relief pursuant to § 8-2-13, which provides in part that "[t]he superior court shall, except as otherwise provided by law, have exclusive original jurisdiction of suits and proceedings of an equitable character * * *." (Emphasis added.)
However, we are bound by the Legislature's mandate that provides that tax disputes are within the statutory scheme that vests exclusive jurisdiction of this particular subject matter in the District Court. Thus in the instant case the proper forum for judicial review of rulings by the tax administrator is clearly in the District Court. With regard to the relief requested, we believe that in keeping with the intent of the Legislature, we hold that since the District Court has obtained jurisdiction of the subject matter under the enabling act, it can retain it for the purpose of administering relief. Pucci v. Algiere, 106 R.I. 411, 261 A.2d 1 (1970). In our reading of §§ 42-35-15, 8-8-3, and 8-8-24 to-32, in conjunction with the Walsh Act, the Legislature, by vesting the District Court with exclusive jurisdiction over tax matters, implied that the District Court is empowered to administer full relief, including adjudication of challenges to the constitutionality of tax statutes and claims for equitable relief that relate to tax disputes. We advance the Legislature's objectives of judicial economy, fairness to litigants, and the elimination of duplicative proceedings. Since the District Court retains exclusive jurisdiction over tax disputes, it is necessary that the District Court retain power to decide all claims for relief attached to the underlying matter. The District Court could not function effectively if the scope of power regarding tax disputes is fragmented. *74 A holding to the contrary would effectually dissipate the force of the statutory system established for the resolution of tax disputes.
We note that if a party is further aggrieved by a decision in the District Court, the party is not without recourse. Section 8-8-32 provides for judicial review by the Supreme Court of rulings or decisions rendered by the District Court. This ultimate review ensures litigants that a fair and expeditious method to review tax disputes completely is available.
We cannot accept plaintiffs' argument that since a petition for a declaratory judgment under § 9-30-1 was filed, then Superior Court jurisdiction is invoked over the entire claim. We have held that if a case is in effect characterized as a tax matter, "the [L]egislature did not intend that a petition under the uniform declaratory judgments act was to take the place of a taxpayer's suit and, therefore, the [S]uperior [C]ourt had no jurisdiction under the act to grant the petitioner's prayers." Pascale v. Capaldi, 95 R.I. 513, 515, 188 A.2d 378, 379 (1963). Concededly, the Superior Court is empowered with jurisdiction over petitions under the Uniform Declaratory Judgment Act; however, in the case before us plaintiffs seek both refunds and declaratory relief.
To allow claims for tax refunds to be removed from the District Court because a claim for equitable relief is included would effectually permit the circumvention of the statutory system that exists for resolution of tax disputes. However, in holding that the District Court has power to adjudicate equitable claims incidental to tax-refund suits, litigants are assured the opportunity to obtain proper relief. Indeed, our holding assures that such claim will be heard by a court possessed of unique expertise in such matters.
In sum, in a tax dispute that includes both a request for refunds and relief of an equitable character, a proceeding must initially be commenced at the administrative level. If a party is aggrieved by an agency act or ruling, or determines that no adequate remedy can be provided, judicial review is available only in the District Court. Included in the District Court's exclusive jurisdiction over tax disputes is the power to adjudicate claims of an equitable character.
Accordingly, the plaintiffs' appeal is denied and dismissed. The judgment of the Superior Court is affirmed, and the papers are remanded to Superior Court.
NOTES
[1] General Laws 1956 (1982 Reenactment) § 31-36.1-3(a), as amended by P.L. 1982, ch. 307, § 1, provides in pertinent part:
"Each carrier shall apply to the administrator for a motor carrier fuel license upon forms approved by the administrator and shall upon application pay a license fee of ten dollars ($10.00). * * * One such device must be displayed on the left side of each covered motor vehicle. Covered vehicles having valid Rhode Island registration plates are exempted from having a device as hereinbefore provided. The fee for each such identification device shall be ten dollars ($10.00)."
[2] On June 22, 1987, the Rhode Island Legislature enacted P.L. 1987, ch. 118, art. 18, § 1. The following language was excised from § 31-36.1-3:
"Covered vehicles having valid Rhode Island registration plates are exempted from having a device as hereinbefore provided." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558538/ | 22 So.3d 71 (2009)
DEBOSE
v.
STATE.
No. 1D09-5315.
District Court of Appeal of Florida, First District.
November 9, 2009.
Decision without published opinion Prohibition denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558548/ | 22 So.3d 1043 (2009)
STATE of Louisiana, Appellee
v.
Nathan Brent PULLIG, Appellant.
No. 44,606-KA.
Court of Appeal of Louisiana, Second Circuit.
September 23, 2009.
*1044 Carey J. Ellis, III, Louisiana Appellate Project, for Appellant.
Jonathan M. Stewart, District Attorney, Kenneth P. Haines, Assistant District Attorney, for Appellee.
Before BROWN, GASKINS, and PEATROSS, JJ.
BROWN, Chief Judge.
Defendant, Nathan Brent Pullig, pled guilty to manslaughter, a violation of La. R.S. 14:31, and aggravated battery, a violation of La. R.S. 14:34. Pursuant to the terms of his plea agreement, defendant was sentenced to 30 years at hard labor for the manslaughter conviction and 10 years at hard labor for the aggravated battery conviction. The sentences were ordered to be served concurrently. Defendant now appeals, urging that his sentence is excessive. We affirm defendant's convictions and sentences.
Facts
Defendant was charged by bill of indictment on July 25, 2001, with the second degree murder of Rodney Jiles and the aggravated battery of Richard Tyler. On May 27, 2001, defendant shot Jiles several times in the back during an argument, and Richard Tyler was shot in the right arm as he was trying to break up the fight.
On September 17, 2003, after a day of testimony at his jury trial, defendant entered a guilty plea to manslaughter (Jiles) and aggravated battery (Tyler). Under the terms of his plea bargain, defendant agreed to serve 30 years at hard labor for the manslaughter conviction and 10 years at hard labor for the aggravated battery conviction, with the sentences to be served concurrently.
Before accepting defendant's plea, the trial court informed defendant of his rights as required by La. C. Cr. P. art. 556.1. Specifically, the court informed defendant of his right to a jury trial, his right against self-incrimination, and his right to confrontation. The court sentenced defendant pursuant to the terms of the plea agreement. After sentencing, the trial court informed defendant of the time limitations in which to file an appeal and to seek post-conviction relief.
Defendant filed a pro se motion for appeal on September 23, 2003. The motion was never ruled upon by the trial court. On January 15, 2009, in No. 44,158-KH, this court reinstated defendant's right to file an appeal. This appeal ensued.
Discussion
Defendant concedes that under La. C. Cr. P. art. 881.2(A)(2) and applicable jurisprudence, he cannot appeal or seek review of a sentence he made in conformity with a plea agreement. He nonetheless argues that this court should examine whether defendant was aware that by pleading guilty he was waiving his right to appeal the excessiveness of his sentence, consistent with an inquiry this court made in State v. Foster, 42,212 (La.App. 2d Cir.08/15/07), 962 So.2d 1214. Defendant asserts that he was not aware that he was waiving his right to appeal by pleading guilty because the trial court never informed him that he was waiving his right to appeal during the guilty plea colloquy and because the trial court told defendant of the timing delays to file an appeal at the end of the sentencing hearing.
According to the state, defendant is not entitled to appeal his sentence since he pled guilty and was sentenced to an agreed-upon sentence. The state also contends that State v. Foster, supra, is inapplicable to the instant case because State v. Foster involved a sentencing cap and in this case defendant pled guilty to an agreed-upon sentence with a specific term.
*1045 La. C. Cr. P. art. 881.2(A)(2) provides:
The defendant cannot appeal or seek review of a sentence imposed in conformity with a plea agreement which was set forth in the record at the time of the plea.
This provision applies to both agreed-upon sentences and sentencing ceilings, ranges and caps. State v. Young, 96-0195 (La.10/15/96), 680 So.2d 1171; State v. Burford, 39,801 (La.App. 2d Cir.06/29/05), 907 So.2d 873.
In State v. Foster, supra, this court held that a sentence made in conformity with a plea agreement could be reviewed if the record showed that the defendant did not contemplate that by pleading guilty he was waiving his right to appeal his sentence for excessiveness. In that case, the defendant entered into a plea agreement wherein he agreed to a 30-year sentencing cap for the offense of armed robbery. On appeal, this court observed that the trial court informed the defendant that by pleading guilty the defendant was waiving his right to appeal "except as to the amount of his sentence." Id. at 1218. This court reasoned that the trial court's statement, which was contrary to La. C. Cr. P. art. 881.2, caused the defendant to have not intelligently waived his right to appeal the excessiveness of his sentence, and thus, the appeal was allowed.
In State v. Fizer, 43,271 (La.App. 2d Cir.06/04/08), 986 So.2d 243, this court addressed the issue of whether a defendant could seek review of his sentence, made within an agreed-upon sentencing cap, when the trial court informed the defendant of the time limitations within which to appeal his sentence immediately after sentencing. In Fizer, we reasoned that because the trial court did not mention any appeal rights during the defendant's plea colloquy, the defendant's plea was not influenced by a belief that he could later seek review of his sentence. Id. at 244-45. See also State v. Scott, 44,509 (La.App. 2d Cir.08/19/09), 17 So.3d 1058; State v. Taylor, 44,205 (La.App. 2d Cir.05/13/09), 12 So.3d 482; State v. Martin, 43,243 (La. App. 2d Cir.06/04/08), 985 So.2d 1253.
In the instant case, the trial court advised defendant after sentencing of the time limitations within which to file an appeal. The court did not inform defendant of a right to appeal or seek review of his sentence during the plea colloquy. The record also shows no evidence of a belief on the part of the court and/or the parties that defendant was reserving his right to seek review of his sentence. Since the trial court's advisement was made after defendant entered his plea, it had no effect on the voluntariness of defendant's plea, and defendant is precluded from seeking review of his sentence, which was made in conformity with the plea agreement. See State v. Taylor, supra; State v. Martin, supra; State v. Fizer, supra. This assignment of error is without merit.
Conclusion
For the reasons set forth above, defendant's convictions and sentences are affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558445/ | 22 So.3d 650 (2009)
In the Interest of S.F., P.F., and C.F., children.
R.F. and E.F., Appellants,
v.
Department of Children and Family Services and Guardian Ad Litem Program, Appellees.
No. 2D08-4350.
District Court of Appeal of Florida, Second District.
October 16, 2009.
Rehearing Denied December 23, 2009.
*652 Henry G. Gyden of Carlton Fields, P.A., Tampa; and John R. Blue and Robert E. Biasotti, St. Petersburg, for Appellants.
Bill McCollum, Attorney General, Tallahassee, and Kimberly G. Gore, Assistant Attorney General, Tampa; and Robin Jensen, Assistant Attorney General, Bradenton, for Appellee Department of Children and Families.
Wendie M. Cooper and Thomas Wade Young, Statewide Guardian Ad Litem Program, Orlando, for Appellee Guardian Ad Litem Program.
CRENSHAW, Judge.
R.F., the Mother, and E.F., the Father, appeal the trial court's final order terminating the parental rights to their three children: S.F., born November 15, 2004; *653 P.F., born January 20, 2006; and C.F., born September 21, 2007. Because the evidence was insufficient to support the termination as to any of the children, we reverse and remand for further proceedings.
On May 9, 2008, the Department filed a petition for the termination of parental rights to all three children, alleging the Mother and the Father failed to comply with section 39.806(1)(c) and (e), Florida Statutes (2007). The trial court conducted a hearing on the Department's petition and, at the conclusion of the hearing, entered a final judgment terminating the parental rights of the Mother and the Father on July 30, 2008. The trial court determined the Department proved by clear and convincing evidence that termination of the parental rights was in the manifest best interest of the children and the least restrictive means of protecting the children from harm. This appeal follows.
The Mother and the Father have a fundamental liberty interest in the care, custody, and management of their children; therefore, the Department must prove the allegations supporting the termination of parental rights by clear and convincing evidence. Santosky v. Kramer, 455 U.S. 745, 769, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982); R.W.W. v. Dep't of Children & Families, 788 So.2d 1020, 1023 (Fla. 2d DCA 2001). Clear and convincing evidence is defined as an "`intermediate level of proof [that] entails both a qualitative and quantitative standard. The evidence must be credible; the memories of the witnesses must be clear and without confusion; and the sum total of the evidence must be of sufficient weight to convince the trier of fact without hesitancy.'" Fla. Dep't of Children & Families v. F.L., 880 So.2d 602, 614 n. 7 (Fla.2004) (Cantero, J., specially concurring) (alteration in original) (quoting In re Davey, 645 So.2d 398, 404 (Fla.1994)). The Department must also establish that the termination of parental rights is the least restrictive means of protecting the children from harm. Padgett v. Dep't of Health & Rehabilitative Servs., 577 So.2d 565, 571 (Fla.1991); R.W.W., 788 So.2d at 1023.
At the termination hearing, the trial court determined the Mother's and the Father's continued involvement with drugs threatened the well-being and safety of the children pursuant to section 39.806(1)(c). The termination of parental rights under this section requires two findings: "first, that continued interaction with the parent threatens the life, safety, or health of the child, and second, that this threat cannot be remedied by the provision of services." T.H. v. Dep't of Children & Family Servs., 979 So.2d 1075, 1082 (Fla. 2d DCA 2008). Though drug addiction is an important factor in assessing the threat of prospective harm to the children, a parent's substance abuse, standing alone, does not establish prospective neglect. C.C. v. Dep't of Children & Family Servs., 812 So.2d 520, 522-23 (Fla. 1st DCA 2002); L.D. v. Dep't of Children & Family Servs., 957 So.2d 1203, 1205-06 (Fla. 3d DCA 2007). The initial case manager, current case manager, and guardian ad litem all testified that the parents did not place the children in an environment that negatively affected their physical, mental, or emotional well-being. Likewise, there was no clear and convincing evidence of a nexus between either the Mother's or the Father's drug use and any existing abuse, neglect, or specific harm to the children. See K.R. v. Dep't of Children & Family Servs., 843 So.2d 366, 368 (Fla. 2d DCA 2003); M.H. v. Dep't of Children & Families, 866 So.2d 220, 222 (Fla. 1st DCA 2004) ("[I]t is well settled that a parent's drug addiction, standing alone, is an insufficient ground upon which to terminate *654 parental rights."). Therefore, we find the trial court erred by granting the petition under section 39.806(1)(c).[1]
Next, the trial court's order determined the parents "failed to comply with the requirements of their case plans pursuant to [section] 39.806(1)(e)." However, the trial court failed to distinguish its findings among S.F. and P.F., who were parties to the original case plan, and C.F., who was adjudicated dependent only seven months before the termination. The trial court also failed to distinguish its findings between the Father and the Mother, the latter of whom had considerably more difficulties complying with her case plan.
Section 39.806(1)(e)(1) provides that a twelve-month period for compliance with a case plan begins to run "only after the child's placement into shelter care or the entry of a disposition order placing the custody of the child with the department or a person other than the parent and the approval by the court of a case plan with a goal of reunification with the parent, whichever came first[.]" The trial court erred when it terminated the parental rights of the Mother and the Father as to C.F. because he was only nine months old at the time of the termination and twelve months had not passed since he was removed from the Father's custody. See P.P. v. Dep't of Children & Families, 889 So.2d 91, 92 (Fla. 1st DCA 2004).
We also find that the Department failed to establish by clear and convincing evidence that the circumstances which caused the creation of the case plan were not significantly remedied to the extent that the well-being and safety of the children was endangered upon remaining with or being returned to the parents. See J.C. v. Dep't of Children & Family Servs., 6 So.3d 643, 649 (Fla. 2d DCA 2009). Although the record reflected the Mother's and the Father's drug relapses, the trial court acknowledged their improvement and compliance with the case plans by returning S.F. and P.F. to their care in June 2007 and determining in August 2007 that they had substantially complied with their case plans. The Department again entrusted the care of the children to the Father by returning S.F. and P.F. to his custody in December 2007, and C.F. in February 2008. "[C]hapter 39 does not allow for the termination of parental rights simply for failing to comply with a case plan." J.R.S. v. Dep't of Children & Families, 787 So.2d 875, 878 n. 7 (Fla. 2d DCA 2001); see also Dep't of Health & Rehabilitative Servs. v. M.H., 625 So.2d 909, 910 (Fla. 2d DCA 1993).
Finally, the trial court determined that termination under section 39.806(1)(c) and (e) was the least restrictive means of protecting the children from serious harm. The least restrictive means test requires that "measures short of termination be utilized if such can permit the safe reestablishment of the parent-child bond." O.M. v. Dep't of Children & Family Servs., 863 So.2d 476, 480 (Fla. 2d DCA 2004). The trial court acknowledged a strong bond between the children and the parents but found the bond was outweighed by the harm the children would suffer if the relationship continued. For reasons stated above, the Department failed to establish the parents' actions harmed the children, and any evidence of future harm was speculative at best. The undisputed evidence showed that each parent shared a strong bond with each child and each parent was able to care for the *655 children for substantial periods of time. Moreover, the trial court's failure to examine the best interests of each child, as opposed to a collective unit, was also error. See K.A. v. Dep't of Children & Family Servs., 880 So.2d 705, 710 (Fla. 2d DCA 2004) ("[I]n cases where the Department seeks to terminate parental rights to numerous children, the trial court cannot treat the children as an amorphous group in which the best interests of one will meet the interests of all.").
Accordingly, we reverse the final judgment terminating the Mother's and the Father's parental rights as to S.F., P.F., and C.F. under section 39.806(1)(c) and (e) and remand for further proceedings.
SILBERMAN and WALLACE, JJ., Concur.
NOTES
[1] As the Department failed to demonstrate by clear and convincing evidence that either parent's actions threatened the life, safety, or health of any of the three children, we will not discuss the second prong enunciated under T.H. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558481/ | 644 F.Supp. 1312 (1986)
Ralph W. KEITH, et al., Plaintiffs,
v.
John A. VOLPE, as Secretary of Transportation, et al., Defendants.
Earl WRIGHT, et al., Additional Plaintiffs on Supplemental Complaint,
v.
CITY OF HAWTHORNE, a municipal corporation, et al., Defendants on Supplemental Complaint.
California Department of Housing and Community Development, et al., Intervenors on Supplemental Complaint.
Goldrich & Kest, Inc., a California corporation, Intervenors on Supplemental Complaint.
No. CV 72-355-HP.
United States District Court, C.D. California.
August 26, 1986.
*1313 Office of the Atty. Gen. State of Cal., Los Angeles, Cal., for Dept. of Housing and Community Development.
Richard H. Levin, A Law Corp., Stephen A. Seideman, Los Angeles, Cal., for Goldrich & Kest, Inc., a California Corp.
Center for Law in the Public Interest, Bill Lann Lee, Elsa Leyva, Los Angeles, Cal., for plaintiffs.
Dept. of Transp., Bruce Behrens, Joel G. Philipp, Sacramento, Cal., for State of Cal.
Burke, Williams & Sorensen, Richard R. Terzian, Cristina L. Sierra, Los Angeles, Cal., for City of Hawthorne.
ORDER RE: AWARD OF ATTORNEYS' FEES AND OUT-OF-POCKET EXPENSES
PREGERSON, Circuit Judge, sitting by designation.
Plaintiffs seek a further award of attorneys' fees and out-of-pocket expenses for work performed monitoring defendants' compliance with the amended consent decree that this court entered in 1981. The present applications cover the period from November 1984 to February 1986. The court has had the benefit of extensive briefing by both parties, oral argument, and additional post-argument information provided at the court's request. The court awards the plaintiffs $179,320.00 in attorneys' fees and $3,535.70 in out-of-pocket expenses.
A.
This is the fourth award of attorneys' fees and out-of-pocket expenses in this case. In 1980, the court awarded plaintiffs expenses covering the period from the filing of the suit (1972) until the entry of the original consent decree (1979). See Keith v. Volpe, 501 F.Supp. 403 (C.D. Cal.1980). In 1982, 1984, and 1985, as part of its continuing jurisdiction over the matter, the court made supplemental awards to the plaintiffs. These awards compensated plaintiffs for considerable time spent monitoring the implementation of the complex and wide-ranging consent decree, ensuring compliance with the decree's terms, and advising the court of revisions to the decree required by unexpected developments as this nearly $2 billion public works project progressed into the construction stage.
The present applications seek compensation for this continuing work between November 1984 and November 1985, and November 1985 and February 1986. During this fifteen month period, state and federal *1314 authorities have taken significant steps towards achieving the public benefits in transportation, housing, and employment that the consent decree was intended to provide. Several unexpected problems have arisen in implementing a number of aspects of the decree, and the plaintiffs' mostly justified and generally successful efforts in resolving these problems are reflected in these applications.
Further difficulties will undoubtedly arise as the freeway and its related public works projects and social programs are completed. The court has repeatedly emphasized the need for close cooperation between the parties and for an empathetic understanding of each others' positions. Unfortunately, an unhelpful rigidity and apparent preference for confrontation marked the earlier part of the period covered by these applications, necessitating the court's involvement in matters that the parties should have settled by negotiation. The court has noted an appreciable improvement in relations in recent months. During this period, the parties have had the benefit of the good offices of Professor Murray Brown of California State University at Los Angeles. Professor Brown's mediation has undoubtedly assisted the parties in amicably resolving certain particularly fractious and difficult issues. The court encourages the parties to continue with their present willingness to resolve difficult issues in this constructive and non-confrontational manner.
The court notes the following important actions undertaken by plaintiffs that effectuated the purposes of the consent decree during the period covered by these applications: (1) providing quarterly comprehensive reports to the court which summarize the progress made in implementing the decree and draw to the court's attention potential areas of difficulty; (2) successfully defending on appeal the court's decision relating to the composition of the board of the Century Freeway Affirmative Action Committee, see Keith v. Volpe, 784 F.2d 1457 (9th Cir.1986); (3) raising, and assisting in the resolution of, several important aspects of the consent decree's employment affirmative action plan; and (4) aiding the Office of the Corridor Advocate in resolving various administrative and substantive difficulties associated with the decree's housing replacement plan.
The court finds that this work was necessary to effectuate the consent decree, and concludes that this justifies a further award of attorneys' fees pursuant to 42 U.S.C. § 1988. See Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, ___ U.S. ___, 106 S.Ct. 3088, 3094-96, 92 L.Ed.2d 439 (1986); Keith v. Volpe, 643 F.Supp. 37 (C.D.Cal.), appeal docketed, No. 85-6591 (Dec. 17, 1985); Keith, 501 F.Supp. at 405-08.
California Department of Transportation ("Caltrans") contends that the the eleventh amendment prohibits the plaintiffs' fees' applications. The court rejected this argument in 1980, and Caltrans has provided the court with no reason to revise the view expressed then. See 501 F.Supp. at 406-07 (citing Hutto v. Finney, 437 U.S. 678, 98 S.Ct. 2565, 57 L.Ed.2d 522 (1978)).
Caltrans also argues that the defendants, including the United States, should prorate any further fees' award among themselves, and that all the plaintiffs, not only those represented by the Center for Law in the Public Interest, should benefit from any award. Neither argument has merit. The court awards fees for work performed in effectuating the implementation of the consent decree. While the federal government has an important financing role in the freeway projects, the decree places the primary task of implementation of its terms upon Caltrans and other state agencies. The court also notes that the United States Claims Court has rejected a claim by Caltrans to apportion liability in this case. As to sharing the benefits of an award, the court awards fees only for appropriate work reasonably and demonstrably performed. This fees' award represents the court's assessment of the work performed by the Center for Law in the Public Interest; the court would independently address *1315 any claims presented by any other plaintiffs.
B.
As the Ninth Circuit recently observed, courts generally do not welcome the task of determining reasonable attorneys' fees. See Planned Parenthood of Central and Northern Arizona v. Arizona, 789 F.2d 1348, 1352 (9th Cir.1986). The court's experience with assessing fees in this case conforms with this sentiment. Each application has produced a daunting stack of briefs, charts, and printouts, accompanied by a vitriolic exchange of charges and countercharges about whether each claimed hour is reasonably compensable. These fee applications now take up a significant amount of the court's time and form a disproportionate part of the fees claimed in the succeeding application.
Given the prospect of, perhaps, another eight to ten years before the decree's programs are completed, the court believes it necessary for the parties to agree promptly on a quicker, cheaper, saner way of dealing with the problem of assessing plaintiffs' attorneys' fees. The court appreciates Caltrans' lack of enthusiasm for paying fees, but it should now be apparent that the court believes that plaintiffs play a necessary role in monitoring the decree. The court will continue to award fees for time reasonably spent in fulfilling this essential function.
Before the next quarterly application, the court will expect the parties to meet and agree on a method of presenting the fees' application which will allow the court to assess the merits of the claim against a single set of objections by Caltrans. The clash of methodologies probably creates the severest difficulty for the court in resolving the fee applications. The court suggests that plaintiffs discontinue their present practice of serial billing. Often one time block entry will cover several related, but discrete activities making disaggregation of claimed time into various activities essentially an impossible task. The parties should then agree on categories of activity; for example, travel, court appearance, phone conversations, meetings with one attorney, meetings with two attorneys, meetings with one attorney and a paralegal, preparing a brief, filing documents, and so on. The application should then state for each person for whom fees are claimed, the subject matter of the claim for example, subcontractors' certification, quarterly status conference, or inverse condemnation study broken down by activity category. Of course, complete documentary support for the hours claimed must accompany the application.
The court is not requiring the parties to present a stipulated application. The court expects the parties to continue to contest both the lodestar amount and hourly rates. However, if both parties direct their energies to contesting the application on broadly similar terms, the need for extended litigation over fees will be significantly reduced.
C.
The court has reviewed carefully the documents, declarations and exhibits filed in support of and in opposition to these applications. In determining a reasonable fee award, the court followed the approach set forth in Moore v. Jas. A. Matthews & Co., 682 F.2d 830, 840-41 (9th Cir.1982). This approach uses the lodestar analysis of Lindy Bros. Builders, Inc. v. American Radiator & Standard Sanitary Corp., 487 F.2d 161, 167-69 (3d Cir.1973) as a procedure for ordering the twelve factors enunciated in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir.1975), cert. denied, 425 U.S. 951, 96 S.Ct. 1726, 48 L.Ed.2d 195 (1976). See Delaware Valley, 106 S.Ct. at 3097-98 (endorsing blended lodestar analysis); Harris v. McCarthy, 790 F.2d 753, 758 (9th Cir.1986) (endorsing Kerr factors).
The court has reduced the total number of hours claimed by 634.4 hours from 2432.8 hours to 1798.4 hours. This reduction acknowledges the Supreme Court's admonition that a statutory fee request should reflect the "billing judgment" that *1316 attorneys routinely exercise in billing private clients. See Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 1939, 76 L.Ed.2d 40 (1983); Planned Parenthood, 789 F.2d at 1352. The court has reduced the total claimed time by: 83.95 hours for time spent traveling between meetings other than court appearances; 77.8 hours for time spent in meetings involving more than two attorneys; 300 hours approximately half that claimed for time spent on these and earlier fees' applications; 170.7 hours for time spent on filing, document organization and other clerical matters that should be covered in hourly rates as normal overhead; 1.25 hours spent on matters relating to medical expenses fraud at the Corridor Advocate's office; and 0.7 hours spent on media-related matters.
The plaintiffs have offered affidavits from partners in three Los Angeles law firms to support their claimed hourly rates. One of these affidavits reports a billing system that sets one hourly rate for all attorneys regardless of experience and another, lower rate for all non-attorney staff. While this unitary billing system has the appeal of simplicity, the traditional billing arrangement of escalating fees according to skill and experience comports better with the Supreme Court's requirement that reasonable fees under section 1988 be calculated according to prevailing market rates in the relevant legal community. See Blum v. Stenson, 465 U.S. 886, 895, 104 S.Ct. 1541, 1547, 79 L.Ed.2d 891 (1984). The court has employed current hourly rates to compensate for inflation. See Burgess v. Premier Corp., 727 F.2d 826, 841 (9th Cir.1984).
The purpose of section 1988 is to ensure that private parties are able to secure effective counsel to protect rights guaranteed by federal law. See Delaware Valley, 106 S.Ct. at 3098. The rates claimed by plaintiffs reflect premium rates charged to substantial corporate clients for mainly commercial matters. The relevant comparable hourly rate here, however, is that appropriate for complex federal litigation of this kind. See City of Riverside v. Rivera, ___ U.S. ___, 106 S.Ct. 2686, 2695, 91 L.Ed.2d 466 (1986).
Thus, the court has reduced somewhat the rates claimed by plaintiffs. In making this determination, the court has not had the benefit of any declarations from the defendants indicating that the rates suggested in the plaintiffs' declarations are not those prevailing for comparable civil rights and environmental impact litigation in Los Angeles. The court encourages the defendants to provide such declarations when responding to future fees applications. The court, has therefore, relied on its prior orders in this case, the rates recently awarded in comparable cases, and its own experience of legal practice in Los Angeles in determining appropriate hourly rates.
Plaintiffs seek reimbursement at the full attorney hourly rate for work performed by law clerks who were then law students working unpaid for class credit. The court considers that plaintiffs should receive reimbursement at an hourly rate sufficient to defray the additional office costs that unpaid staff incur.
The court thus finds the following hours and rates to be fair and reasonable:
TOTAL HOURLY LODESTAR
× =
HOURS RATE AMOUNT
Phillips 436.95 $180.00 78,651.00
Lee 31.1 140.00 4,354.00
Leyva 426.1 90.00 38,349.00
Wiener 488.45 80.00 39,076.00
Watson 320.8 50.00 16,040.00
Kern 37.0 30.00 1,110.00
Day 58.0 30.00 1,740.00
___________
$179,320.00
Plaintiffs also seek $3,535.70 in out-of-pocket expenses. Defendants do not contest these expenses. The court has examined the details of this part of the claim and awards the claimed amount to the plaintiffs. See International Woodworkers of America, Local 3-98 v. Donovan, 769 F.2d 1388, 1392 (9th Cir.1985).
Therefore, IT IS HEREBY ORDERED that the defendant, California Department of Transportation, shall pay plaintiffs' counsel, the Center for Law in the Public Interest, the total sum of $182,855.70 plus *1317 interest at the legal rate from the date of entry of this order. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558492/ | 22 So.3d 981 (2009)
TIG INSURANCE COMPANY
v.
LOUISIANA WORKERS' COMPENSATION CORPORATION.
No. 2009 CA 0330.
Court of Appeal of Louisiana, First Circuit.
September 11, 2009.
*982 John H. Hughes, Lafayette, LA for Plaintiff-Appellant TIG Insurance Company.
Jeffrey J. Warrens, Baton Rouge, LA, for Defendant-Appellee Louisiana Workers' Compensation Corporation.
Before CARTER, C.J., GUIDRY, and PETTIGREW, JJ.
PETTIGREW, J.
This matter is before us on appeal from a judgment of the Office of Workers' Compensation ("OWC"), finding a contribution claim by TIG Insurance Company ("TIG") against Louisiana Workers' Compensation Corporation ("LWCC") prescribed. For the following reasons, we affirm in part, reverse in part, and remand.
*983 FACTS AND PROCEDURAL HISTORY
Carl Thomas, an employee of Louisiana Log Homes Company, Inc. ("Louisiana Log"), filed a disputed claim form with the OWC alleging he had suffered a work-related injury. TIG provided workers' compensation insurance to Louisiana Log at the time of the accident and paid Thomas compensation benefits and medical expenses. TIG settled with Thomas and subsequently filed a claim with the OWC against LWCC alleging it also had a workers' compensation policy in effect covering Louisiana Log on the date of the alleged accident. TIG asserted LWCC was a solidary obligor in relation to workers' compensation benefits previously paid to Thomas by TIG, and as such, was liable to TIG for one-half of its expenditure associated with the handling and settlement of Thomas' compensation claim, or $53,397.94, plus costs and judicial interest.
In response to TIG's claim, LWCC filed an exception raising the objection of prescription, arguing that TIG failed to timely file its contribution claim. Noting that the last payment of workers' compensation benefits to Thomas by TIG was on July 9, 2002, and that TIG's claim against LWCC was not filed until April 25, 2006, LWCC alleged that pursuant to the prescriptive periods set forth within La. R.S. 23:1209, any claim TIG had against LWCC for contribution was prescribed. On April 20, 2007, after hearing argument from the parties, and considering the documentary evidence introduced into the record by TIG, the OWC judge agreed that TIG's claim was prescribed pursuant to La. R.S. 23:1209. In a judgment rendered May 7, 2007, the OWC judge sustained LWCC's prescription exception, dismissing, with prejudice, TIG's contribution claim against LWCC. It is from this judgment that TIG has appealed.
PRESCRIPTION
If the facts alleged in a petition do not show that a claim has prescribed, the burden is on the party raising the objection of prescription to prove it. Conversely, if a claim is prescribed on the face of the pleadings, the burden is on the plaintiff to show that prescription has not tolled because of an interruption or a suspension of prescription. Bracken v. Payne and Keller Co., Inc., XXXX-XXXX, p. 4 (La. App. 1 Cir. 9/5/07), 970 So.2d 582, 587. At the trial of a peremptory exception, evidence may be introduced to support or controvert any of the objections pleaded, when the grounds thereof do not appear from the petition. La.Code Civ. P. art. 931. Generally, in the absence of evidence, the objection of prescription must be decided on the facts alleged in the petition, and all allegations thereof are accepted as true. Boudreaux v. Angelo Iafrate Const., 2003-2260, p. 3 (La.App. 1 Cir. 2/4/05), 895 So.2d 596, 598.
If evidence is introduced at the hearing on the peremptory exception raising the objection of prescription, the district court's findings of fact are reviewed under the manifest error or clearly wrong standard of review. Oil Ins. Ltd. v. Dow Chemical Co., XXXX-XXXX, p. 7 (La.App. 1 Cir. 11/2/07), 977 So.2d 18, 22, writ denied, 2007-2319 (La.2/22/08), 976 So.2d 1284; see Stobart v. State through Dept. of Transp. and Development, 617 So.2d 880, 882-883 (La.1993). Essentially, if the findings are reasonable in light of the record reviewed in its entirety, an appellate court may not reverse even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Oil Ins. Ltd., XXXX-XXXX at 7, 977 So.2d at 23.
DISCUSSION
Louisiana Revised Statutes 23:1209 addresses the prescriptive period *984 for workers' compensation claims, providing as follows:
A. In case of personal injury, including death resulting therefrom, all claims for payments shall be forever barred unless within one year after the accident or death the parties have agreed upon the payments to be made under this Chapter, or unless within one year after the accident a formal claim has been filed as provided in Subsection B of this Section and in this Chapter. Where such payments have been made in any case, the limitation shall not take effect until the expiration of one year from the time of making the last payment, except that in cases of benefits payable pursuant to R.S. 23:1221(3) this limitation shall not take effect until three years from the time of making the last payment of benefits pursuant to R.S. 23:1221(1), (2), (3), or (4). Also, when the injury does not result at the time of, or develop immediately after the accident, the limitation shall not take effect until expiration of one year from the time the injury develops, but in all such cases the claim for payment shall be forever barred unless the proceedings have been begun within two years from the date of the accident.
B. Any claim may be filed with the director, office of worker's compensation, by delivery or by mail addressed to the office of worker's compensation. The filing of such claims shall be deemed timely when the claim is mailed on or before the prescription date of the claim. If the claim is received by mail on the first legal day following the expiration of the due date, there shall be a rebuttable presumption that the claim was timely filed. In all cases where the presumption does not apply, the timeliness of the mailing shall be shown only by an official United States postmark or by official receipt or certificate from the United States Postal Service made at the time of mailing which indicates the date thereof.
C. All claims for medical benefits payable pursuant to R.S. 23:1203 shall be forever barred unless within one year after the accident or death the parties have agreed upon the payments to be made under this Chapter, or unless within one year after the accident a formal claim has been filed with the office as provided in this Chapter. Where such payments have been made in any case, this limitation shall not take effect until the expiration of three years from the time of making the last payment of medical benefits.
D. When a petition for compensation has been initiated as provided in Section 1310.3, unless the claimant shall in good faith request a hearing and final determination thereon within five years from the date the petition is initiated, same shall be barred as the basis of any claim for compensation under the Worker's Compensation Act and shall be dismissed by the office for want of prosecution, which action shall operate as a final adjudication of the right to claim compensation thereunder.[1]
Thus, under La. R.S. 23:1209(A), claims are barred unless filed within: (1) one year from the date of the accident; (2) one year from the last compensation payment for *985 total disability or three years from the last payment for partial disability; or (3) one year from the time the injury develops if not immediately manifested, but, in any event, no more than two years after the accident. Additionally, La. R.S. 23:1209(C) provides that a claim for medical benefits prescribes one year from the date of the accident unless payments have been agreed upon, or unless a claim is filed within one year of the accident. Where payments have been made, the claim prescribes three years from the date of the last payment of medical benefits. Hudson v. East Baton Rouge Parish School Bd., XXXX-XXXX, p. 4 (La.App. 1 Cir. 3/28/03), 844 So.2d 282, 286.
On appeal, however, TIG asserts that La. R.S. 23:1209 is not a general prescriptive period applicable to all claims brought in workers' compensation courts. TIG argues that because TIG and LWCC were both contractually liable to Thomas for workers' compensation benefits, and because TIG paid $106,795.89 in benefits and expenses incurred as a result of Thomas' work-related accident, TIG was legally subrogated to its obligee's (Thomas) rights to recover from LWCC one half of these total expenditures incurred by TIG based on La. Civ.Code arts. 1804 and 1829. Citing this court's opinion in Employers' Liability Assur. Corp. v. General Acc. Fire & Life Assur. Corp., 125 So.2d 689 (La.App. 1 Cir.1960), TIG maintains that a claim by one solidary obligor against another solidary obligor to recover workers' compensation payments is a claim for restitution governed by a ten-year prescriptive period as set forth in La. Civ.Code art. 3499.[2]
LWCC responds in brief that TIG did not introduce any evidence at the hearing on the prescription exception to establish that the alleged work-related accident did in fact occur, and if so, the nature and extent of any injuries and disability sustained by Thomas as a result of the accident. Moreover, LWCC maintains there has been no evidence submitted that would establish solidary liability. Thus, LWCC contends the only issue before this court is whether the contribution claim by TIG against LWCC has prescribed. Noting that TIG's last payment of workers' compensation benefits to Thomas was on July 9, 2002, and that TIG did not file the instant claim against LWCC until April 25, 2006, LWCC alleges that pursuant to the prescriptive periods set forth within La. R.S. 23:1209, any claim TIG had against LWCC for contribution was clearly prescribed.
We initially note that TIG's reliance on Employers', supra, in support of its assertion that the ten-year prescriptive period found in Article 3499 applies to its contribution claim against LWCC is misplaced. In Employers', a dispute arose as to whether the insurer at the time of a work-related accident or the insurer at the time a disability developed was required to pay benefits, and the latter party paid in order to avoid possible penalties. Thereafter, in a suit for recovery of benefits paid by plaintiff insurer, defendant insurer sought to interject prescription of one year pursuant to La. R.S. 23:1209. By reference to cases involving La. Civ.Code art. 2302 (Girod v. Barbe, 153 So. 326 (La.App. 1 Cir.1934); Smith v. Phillips, 175 La. 198, 143 So. 47 (La.1932); Lagarde v. Dabon, 155 La. 25, 98 So. 744 (La.1923)), this court held that the relief sought by plaintiff insurer at the time of the employee's disability was for restitution, and therefore, the *986 applicable prescriptive period was ten years.[3]Employers', 125 So.2d at 693.
In the instant case, there has been no payment of the debt of another person and a subsequent claim for restitution as in Employers'. Rather, TIG has admitted workers' compensation liability to Thomas, and is now relying on statutory articles governing solidary liability and legal subrogation in its contribution claim against LWCC. Thus, Employers' is easily distinguishable from the case before us now.
The issue of which prescriptive period is applicable to cross-claims between employers or workers' compensation insurers for contribution is res nova in this circuit.[4] However, the issue has been squarely addressed by the third circuit in Larkin v. Regis Hair Stylists, 2002-127 (La.App. 3 Cir. 5/15/02), 817 So.2d 1266, and we find the third circuit's analysis of same very helpful in our review of the appeal currently before us.
In Larkin, the plaintiff injured her back while moving boxes on October 21, 1999, during the course and scope of her employment with Regis Hair Stylists. She filed a workers' compensation claim against Regis on March 23, 2000. Regis and its workers' compensation insurer, Atlantic Mutual, filed a third party demand against plaintiffs previous employer, Books-A-Million, and its workers' compensation insurer, Travelers Insurance Company, asserting that plaintiff had suffered a back injury while employed with Books-A-Million in 1996. Books-A-Million and Travelers filed an exception raising the objection of prescription, arguing that the one-year prescriptive period of La. R.S. 23:1209 had expired. The trial court granted the prescription exception. Larkin, 2002-127 at 1-2, 817 So.2d at 1266-1267.
In addressing the issue on appeal, the third circuit noted that in 1997, the legislature amended La. R.S. 23:1310.3(E) to provide as follows:
E. Except as otherwise provided by R.S. 23:1101(D) and 1378(E), the workers' compensation judge shall be vested with original, exclusive jurisdiction over all claims or disputes arising out of this Chapter, including but not limited to workers' compensation insurance coverage disputes, employer demands for recovery for overpayment of benefits, the determination and recognition of employer credits as provided for in this Chapter, and cross-claims between employers or workers' compensation insurers for indemnification or contribution. [Emphasis added.]
The Larkin court continued, finding that the amendment to La. R.S. 23:1310.3(E) "clearly granted original and exclusive jurisdiction of claims between insurers for contribution to the Office of Workers' *987 Compensation." Larkin, 2002-127 at 3, 817 So.2d at 1268. The court further noted, "[La.] R.S. 23:1209 provides that 'all claims for payments shall be forever barred' unless brought within one year. R.S. 23:1209 does not grant any exceptions or extensions for a contribution claim filed by an insurer against another beyond the one year period." Larkin, 2002-127 at 3-4, 817 So.2d at 1268.[5] The court ultimately concluded, "[g]iven the contribution claim Regis attempts to advance falls within the purview of the Workers' Compensation Act, the one year prescriptive period of R.S. 23:1209, which pertains to all claims brought under the Workers' Compensation Act, is applicable in this case." Larkin, 2002-127 at 5, 817 So.2d at 1268. Accordingly, the third circuit affirmed the ruling of the trial court that the claim by Regis and Atlantic Mutual for contribution had prescribed.
In oral reasons for judgment, the OWC judge in the instant case acknowledged that this circuit had not "spoken to this precise issue since the amendment in '97 to [La. R.S.] 1310.3." The OWC judge agreed with the Larkin court's reasoning, noting as follows:
I feel that in '97 when the cross claims jurisdiction was added to the workers' compensation court that had the legislature felt that a special prescriptive period for those claims should have been presented in the Act, they had the opportunity to do so. They did not change prescription under 1209 in any way to adopt or to change with the additional subject matter jurisdiction of cross claims. 1209 does say, "All claims." 1209 has been here for a very long time, much earlier than the 1997 amendment and when it came into play, that was not here. The legislature certainly could have increased the time limit for insurance cross claims had they so desired and nobody, in my mind, is more in the know than the two insurance companies as to this overlapping of coverage. I don't really know why TIG waited so long to ask for contribution. It's been almost four years since they paid this claim. It's always been my feeling that the reason you have such a long prescriptive period in the civil code of personal actions was to give people time to discover that they had a cause of action. You might get hurt and not realize it or you might not be able to find the person that hurt you or what have you, but I'm sure that the employer knew pretty early on that they had policies that overlapped. One expired after the date of the accident and the other began before the date of the accident. It just seems that this is a classic case that should sit under 1209 because all the knowledge is there to ask for the contribution and file the cross claim in the workers' compensation court. This accident happened after the '97 incident, so it's not like, we weren't sure whether we should get in district court or what have you. The time line stillyou would have hadI would say you have had at least three years because who could say that the money in the settlement was for SEB, medicals, oryou would have the optimal time of three years to file.
I think that the reasoning the third circuit uses with regard to the amendment and my own feeling that if the legislature wanted to add a better prescriptive period for cross claims, they had *988 the opportunity when they added the jurisdiction, puts it squarely in 1209.
Having reviewed the record before us and the applicable statutory law and jurisprudence, we agree with the third circuit's reasoning that until the Legislature expresses itself to the contrary, the prescriptive period applicable to cross claims between employers or workers' compensation insurers for indemnification or contribution is found in La. R.S. 23:1209. Accordingly, based on the evidence, TIG's claim for contribution as it relates to disability benefits it paid to Thomas is clearly prescribed. However, our inquiry does not end here.
As noted by the OWC judge, not knowing what the "money in the settlement was for," whether it was for medical benefits or supplemental earnings benefits, TIG would have had up to three years to file its contribution claim and failed to do so. See La. R.S. 23:1209(A), (C). Instead, TIG waited until almost four years had elapsed from the date of the last payment to Thomas to initiate its claim against LWCC. Pursuant to the prescriptive periods set forth in La. R.S. 23:1209, TIG's claim for contribution is prescribed on its face. Therefore, the burden shifted to TIG to show that an interruption or suspension of prescription occurred.
Although not raised by the parties on appeal, we note a possible interruption of prescription by a prior suit filed by TIG against LWCC concerning TIG's claim for contribution. Louisiana Civil Code article 3462 provides for interruption of prescription by filing of suit or by service of process as follows:
Prescription is interrupted when the owner commences action against the possessor, or when the obligee commences action against the obligor, in a court of competent jurisdiction and venue. If action is commenced in an incompetent court, or in an improper venue, prescription is interrupted only as to a defendant served by process within the prescriptive period. [Emphasis added.]
See Woods v. State, Dept. of Health and Hospitals, XXXX-XXXX, p. 8 (La.App. 1 Cir. 6/6/08), 992 So.2d 1050, 1055, writ denied, 2008-2426 (La.12/19/08), 996 So.2d 1133. Moreover, La. Civ.Code art. 3466 provides, "If prescription is interrupted, the time that has run is not counted. Prescription commences to run anew from the last day of interruption."
According to the record, TIG had previously filed a suit against LWCC in the 19th Judicial District Court seeking contribution from LWCC regarding benefits TIG paid to Thomas following the accident at issue. While there are no file stamped copies of the pleadings in the record before us, TIG did introduce copies of the pleadings into evidence at the hearing on the prescription exception. The copy of the petition indicates it was prepared on August 23, 2004. The copy of LWCC's answer and exception raising the objection of lack of subject matter jurisdiction appears to have been prepared on September 22, 2004. Pursuant to La.Code Evid. art. 202, we take judicial notice of LWCC's writ application to this court from the trial court's denial of LWCC's exception raising the objection of subject matter jurisdiction. See TIG Ins. Co. v. Louisiana Workers' Compensation Corp., 2004-2608, p. 6 (La.App. 1 Cir. 6/10/05), 917 So.2d 26, 29, writ denied, XXXX-XXXX (La.1/27/06), 922 So.2d 553, wherein this court held that La. R.S. 23:1310.3 clearly and explicitly places jurisdiction over a claim for subrogation between workers' compensation insurers, pursuant to workers' compensation coverage, within the scope of the OWC. Thus, although we do not know the exact filing dates of these *989 pleadings or the date that LWCC was served, we presume that there was service of process sometime prior to September 22, 2004, which would have been within the original prescriptive period for medical benefits and/or supplemental earnings benefits. Accordingly, if TIG did in fact make any such payments to Thomas, prescription as to these claims may have been interrupted, and said prescription would not have commenced to run again, anew, until the judgment from the 19th Judicial District Court case was final. See La. Civ.Code art. 3466.
DECREE
For the above and foregoing reasons, we affirm the judgment of the OWC as it relates to disability benefits paid to Thomas. As it relates to any payments of medical benefits or supplemental earnings benefits, we reverse the judgment of the OWC and remand the matter for further proceedings consistent with this opinion. All costs associated with this appeal are assessed against TIG Insurance Company.
AFFIRMED IN PART, REVERSED IN PART, REMANDED.
CARTER, C.J., and GUIDRY, J., concur.
NOTES
[1] Although this is the version of La. R.S. 23:1209 in effect at all pertinent times hereto, we note that the statute was amended by Acts 2008, No. 220, § 8. Said amendment simply inserted paragraph designations in subsec. A; in par. (A)(3), substituted "When" for "Also, when"; in the first sentence of subsec. B, substituted "workers'" for "worker's" twice; and in subsec. D, substituted "R.S. 23:1310.3" for "Section 1310.3" and "that claim" for "same".
[2] Louisiana Civil Code article 3499 provides that "[u]nless otherwise provided by legislation, a personal action is subject to a liberative prescription of ten years."
[3] Louisiana Civil Code article 2302 provides, in pertinent part, as follows, concerning the payment of the debt of another: "A person who paid the debt of another person in the erroneous belief that he was himself the obligor may reclaim the payment from the obligee.. . . In such a case, the person who made the payment has a recourse against the true obligor."
[4] In Barrios v. Lambar, Inc., XXXX-XXXX (La. App. 1 Cir. 12/28/06), 951 So.2d 323, third party defendants in a workers' compensation contribution claim urged a prescription exception, arguing that based on the amendment to La. R.S. 23:1310.3(E), workers' compensation contribution claims are now subject to the one-year prescriptive period set forth in La. R.S. 23:1209. Finding that the third-party contribution claim was timely filed within one year from the date of the last payment of workers' compensation benefits (see La. R.S. 23:1209(A)(2)), this court pretermitted consideration of which prescriptive period was, in fact, applicable to third-party claims for contribution. Barrios, XXXX-XXXX at 9 n. 4, 951 So.2d at 329 n. 4.
[5] As the claim in Larkin was a claim for temporary total disability benefits, the one-year prescriptive period of La. R.S. 23:1209 was clearly applicable. However, as previously noted, there are different prescriptive periods applicable for supplemental earnings benefits and medical benefits that were not at issue in Larkin. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1539178/ | 118 B.R. 817 (1990)
In re Stephen J. and Laura Ann R. BADER, Debtors.
Bankruptcy No. 89-07394.
United States Bankruptcy Court, N.D. Florida, Tallahassee Division.
August 20, 1990.
Jim L. Dye, Tallahassee, Fla., for debtors.
William Miller, Jr., Tallahassee, Fla., trustee.
ORDER ON MOTION TO REVIEW ATTORNEY'S FEES
LEWIS M. KILLIAN, Jr., Bankruptcy Judge.
This action came before this court on the Trustee's motion to determine the reasonableness of fees paid to the debtors' attorney. Section 329 of the Bankruptcy Code gives the Bankruptcy Court the power to require the return of any payment of fees which the court determines to be excessive. The issue before the court is whether $5,000 is a reasonable fee to be paid to an attorney for a Chapter 7 case involving individual debtors. It is the court's determination that $5,000 is an excessive fee for this type of case and that the amount of $4,000 must be disgorged and returned to the estate to be administered by the trustee.
Prior to filing the petition in bankruptcy, the debtors retained Jim Dye as their attorney. Dye was hired in contemplation of the debtors filing for bankruptcy. He required that the debtors give him $5,000 as a retainer for his work on their case. The debtors obtained this amount by borrowing it from a relative, and gave it to Dye.
The debtors list assets of $277,915.62. Of this amount, $258,000 is real property securing debts in the amount of $282,200. An additional $15,000 asset is a vehicle secured by a lien. After subtracting the allowed exemption of $2,000, the debtors assets free from liens have a value of $2,915.62. The debtors list unsecured debts in the amount of $52,623.
It is the trustee's position that a fee of $5,000 is excessive for a Chapter 7 case. He bases his determination that the fee is excessive on a comparison of fees received by attorneys in comparable Chapter 7 cases in which the trustee has dealt. Based on his comparison the trustee requests the return of all but $1,000 of the fee.
Dye filed with the court a time summary showing that he has worked 49.75 hours on the case. His time is reported in quarterhour increments with much of his time spent in conferences with the debtors. It is his assertion that the time spent thus far *818 is justified because the case is not a simple "no assets" case and it has some complications. He also asserts that a significant part of his time was spent due to errors by the trustee. However, he did not present anything except his time records to show the extent of work required to correct these "errors."
Bankruptcy Code § 329 gives the court the authority to examine the fee arrangement that the debtor enters with its attorney. The provision allows the court to require an attorney to return any payment, that was given to him less than one year prior to filing the petition in bankruptcy, for services rendered in contemplation of bankruptcy when that payment exceeds the reasonable value of the services provided. Section 329 is derived from section 60d of the Bankruptcy Act of 1898. The Supreme Court stated that the purpose of 60d was
to safeguard the assets of those who are acting in contemplation of bankruptcy, so that these assets may be brought quickly and without unnecessary expense into the hands of the trustee, and to provide a restraint upon opportunities to make an unreasonable disposition of property through arrangement for excessive payments for prospective legal services.
Conrad, Rubin & Lesser v. Pender, 289 U.S. 472, 477, 53 S.Ct. 703, 705, 77 L.Ed. 1327 (1933). The Supreme Court, in another case, stated that the provision "recognizes the right of [] a debtor to have the aid and advice of counsel, and . . . to make provisions for reasonable compensation to his counsel." In re Wood, 210 U.S. 246, 253, 28 S.Ct. 621, 624-25, 52 L.Ed. 1046 (1908). This provision protects both the debtor and the creditors from the possibility of excessive attorney's fees. In re C & P Auto Transport, Inc., 94 B.R. 682 (Bkrtcy.E.D.Cal.1988), citing, In re Pacific Far East Line, Inc., 644 F.2d 1290 (9th Cir.1981).
It is this court's determination that $5,000 is an excessive fee for a routine Chapter 7 involving individual debtors. To allow such an excessive fee would be adverse to the purpose of § 329. The reason such a fee is adverse to § 329 is that it would harm, and not protect, both the debtor and its creditors. Requiring a debtor to post a retainer fee of $5,000 denies a debtor the right to have aid and advice of counsel. If such a retainer were allowed, debtors, who are already in a financial pinch, would not be able to afford to retain an attorney and they would be denied the opportunity to have the advice of an attorney to guide them through bankruptcy. Additionally, a $5,000 retainer fee diminishes the assets of the debtor to the disadvantage of the creditors. By giving that money to an attorney, the debtor takes from the assets in which the creditors may have a claim and reduces the amount the creditors could recover in a liquidation. That is not to say a debtor cannot use any funds to retain an attorney. Section 329 allows the debtor to pay a reasonable fee to his attorney. The reasonableness of the fee is what must be determined.
The Middle District of Florida, in a recent case, listed many factors to be examined by the court to determine the reasonableness of a fee claim. In re Mellard, 117 B.R. 716 (Bkrtcy.M.D.Fla.1990). Although that was a Chapter 13 case, the factors that the court listed pertain to all fee arrangements. The court looked at; the time and labor involved, whether a non-attorney could perform some of the tasks, whether there were any novel or difficult questions involved, what amount of skill was necessary to perform the services, whether acceptance of the case precluded other employment on the part of the attorney, the amount customarily charged in the community, whether the rate was a flat fee or based on expected hourly work, whether extraordinary results were obtained, whether the relationship between the attorney and the client is ongoing or limited, whether the case was undesirable, and the amount awarded in similar cases in the division. The court stated that a $1,500 fee was the most it would allow in a Chapter 13 case. Generally, an attorney in a Chapter 13 case is required to do more work than is required of an attorney for individuals in a Chapter 7 case. If the maximum rate allowed in a Chapter 13 case, in Orlando, is $1,500, it could hardly be argued that *819 $5,000 is reasonable for a straight-forward, individual Chapter 7 case in Tallahassee.
Dye asserts that he has put in nearly 50 hours on this case. This is an extraordinary amount of hours for this type of case. His time records indicate that he has done more work than is ordinarily necessary for a Chapter 7 case. However, he has not shown any of the factors set out in Mellard to be present in this case. It is the attorney applying for legal fees in bankruptcy who has the burden of showing that his fees are reasonable. In re the Matter of Kroh Brothers Development Co., 1989 U.S.Dist.Lexis 2966 (W.D.Mo. 1989) citing, In re U.S. Golf Corp., 639 F.2d 1197 (5th Cir.1981). There was not a novel or difficult issue involved, nor did this case require a great amount of skill, nor were there any extraordinary results obtained or involved. In fact, some of the hours listed could have been performed by non-lawyers. Additionally, the hours presented were on quarter-hour increments. Billing on the quarter-hour results in an inflation of the actual time put forth by the attorney. It appears, from Dye's list of hours, that he received the retainer of $5,000 and is now attempting to justify that fee. This court can not allow attorneys to demand an excessive retainer fee then spend unnecessary time on the matter in order to justify the fee. The retainer should be an amount in which the attorney reasonably believes will be necessary to handle the case. A retainer of $5,000 is not a reasonable fee for this type of case.
Based on our knowledge and experience with fees paid to attorneys throughout this district for representation in Chapter 7 cases, we find that $1,000 is not an excessive fee for this case. This amount is at the extreme high end of fees charged by attorneys for individual debtor Chapter 7 cases in this district. Any further reduction is not warranted in view of the work actually done in this case and the quality of that work.
Section 329(b) requires a return of excessive fees to "(1) the estate if the property transferred (A) would have been property of the estate; or (2) the entity that made such payment." Here, the debtors borrowed the funds to pay the retainer. Once they received the loan proceeds, they became the debtors' property, and the lender had a claim. Thus, the loan proceeds would have been property of the estate prior to the payment of Dye's retainer and must be returned to the estate. Accordingly, it is hereby
ORDERED AND ADJUDGED that the trustee's motion be and same is granted and Jim Dye is ordered to pay to the trustee William Miller within ten (10) days, the sum of $4,000.
DONE AND ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1558708/ | 22 So.3d 935 (2009)
Cheryl Mooney JOHNSON, Roy W. Mooney, Lola M. Mooney, Julie Mooney Toney, Jerry Wayne Mooney, Charles Morice Mooney, Jeffery Allen Mooney, John Oliver Mooney and Patricia A. Mooney Perriloux, All Individually and on Behalf of the Estate of Wilmer R. Mooney, Sr. and Jerry Lee Graham Mooney, Widow Of Wilmer R. Mooney, Sr.
v.
Robert V. SHAFOR, M.D., Sanjay Raina, M.D., Sibaja Shome, M.D. and Slidell Memorial Hospital and its Employees.
Nos. 2008 CA 2145, 2008 CA 2146.
Court of Appeal of Louisiana, First Circuit.
July 29, 2009.
*936 Laurie M. Pennison, James A. Marchand, Jr., Frank E. St. Philip, II, Covington, Louisiana, for Plaintiffs-Appellants, Cheryl Mooney Johnson, et al.
Thomas H. Wartelle, Randall L. Champagne, Baton Rouge, Louisiana, for Defendant-Appellee, St. Tammany Parish Hospital Service District # 2 d/b/a Slidell Memorial Hospital.
Deborah Deo Gracia Trahan, Covington, Louisiana, for Defendants-Appellees, Robert V. Shafor, M.D. and Sanjay Raina, M.D.
Charles F. Gay, Jr., Shelly F. Spansel, New Orleans, Louisiana, for Defendant-Appellee, Sibaja Shome, M.D.
Before KUHN, GUIDRY, and GAIDRY, JJ.
KUHN, J.
This appeal arises from consolidated medical malpractice suits filed against St. Tammany Parish Hospital Service District No. 2, doing business as Slidell Memorial Hospital ("SMH"), and other qualified health care providers under the Louisiana Medical Malpractice Act, La. R.S. 40:1299.41, et seq.[1] The petitions in both suits alleged that SMH committed malpractice *937 between January 5 and January 14, 2003. The first suit was dismissed as to SMH due to insufficient service of process. In the second suit, the claims asserted against SMH were dismissed with prejudice via a May 1, 2008 judgment, which granted SMH's peremptory exception raising the objection of prescription. Plaintiffs have appealed this latter judgment. Pursuant to Louisiana Revised Statutes 13:5107, we find that the filing of the first suit did not interrupt or suspend the running of prescription as to plaintiffs' malpractice claims against SMH, a political subdivision. Thus, the trial court property determined that plaintiffs' medical malpractice claims against SMH had prescribed by the time the second action was filed.
I. PROCEDURAL AND FACTUAL BACKGROUND
Pursuant to Louisiana Revised Statutes 40:1299.41 et seq., plaintiffs, Cheryl Mooney Johnson, Roy W. Mooney, Lola M. Mooney, Julie Mooney Toney, Jerry Wayne Mooney, Charles Morice Mooney, Jeffery Allen Mooney, John Oliver Mooney, and Patricia A. Mooney Perriloux, all individually and on behalf of the Estate of Wilmer R. Mooney, Sr.; and Jerry Lee Graham Mooney, widow of Wilmer R. Mooney, filed a complaint with the Louisiana Division of Administration ("DOA") on January 5, 2004, requesting that a medical review panel be convened to review the treatment provided by Drs. Robert V. Shafor, Sanjay Raina, Sibaji Shome, and SMH and its employees to Wilmer R. Mooney, Sr.[2] The medical review panel issued its opinion on September 11, 2006, and plaintiffs' counsel received notice of the opinion via certified mail on September 18, 2006.
On December 8, 2006, plaintiffs filed a petition for damages, bearing docket number XXXX-XXXXX "J", which asserted survival and wrongful death claims based on the alleged negligence of defendants, SMH, Shafor, Raina, and Shome. Therein, plaintiffs requested that service on defendants be withheld. On August 16, 2007, SMH filed a declinatory exception raising the objections of insufficiency of service of process and insufficiency of citation. Shafor and Raina also filed a declinatory exception raising the objection of insufficiency of service of process. Following a December 13, 2007 hearing, the trial court maintained these exceptions in open court. By judgment dated January 8, 2008, the trial court ordered the dismissal without prejudice of plaintiffs' claims against SMH, Shafor, and Raina.
Plaintiffs filed another suit on December 13, 2007, naming as defendants SMH, Shafor, and Raina, which set forth identical allegations to those contained in the first petition regarding the negligence of these defendants. This suit bore the docket number XXXX-XXXXX "G". In response to this second petition, SMH filed a peremptory exception raising the objections of prescription and peremption on January 10, 2008. On March 4, 2008, the trial court granted the plaintiffs' motion to transfer and consolidate the two suits and ordered the transfer of the suit bearing docket number XXXX-XXXXX "G" to docket number XXXX-XXXXX "J."[3] On May 1, 2008, the trial court granted SMH's exception raising the objection of prescription and ordered that plaintiffs' claims against SMH "originally filed in Docket No. 2007-16729 "G[,]" which was subsequently transferred... and consolidated with the instant *938 proceedings [in docket number XXXX-XXXXX] are hereby dismissed in their entirety with prejudice[.]" Plaintiffs have appealed this judgment, urging the trial court erred in concluding that their claims against SMH have prescribed.
II. ANALYSIS
Louisiana Revised Statutes 9:5628(A) states, in pertinent part:
No action for damages for injury or death against any physician, ... hospital or nursing home duly licensed under the laws of this state, ... 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).
The prescriptive period for a medical malpractice claim commences upon the occurrence of the injury when the damages are immediately apparent. In re Medical Review Panel Proceedings of Ouder, 07-1266, p. 3 (La.App. 1st Cir.5/2/08), 991 So.2d 58, 60. In this case, plaintiffs allege that Mr. Mooney's death was caused by the defendants' negligence during Mr. Mooney's hospitalization between January 5, 2003, and January 14, 2003. The parties do not dispute that the plaintiffs had one year from January 14, 2003, the date of Mr. Mooney's death, to file their medical malpractice claims.
Pursuant to La. R.S. 40:1299.47, all medical malpractice claims against qualified health care providers must be reviewed by a medical review panel before suit can be instituted against them. The procedure is initiated by filing a request for review of the claim by a medical review panel with the DOA, which forwards the request to the Patients' Compensation Fund. La. R.S. 1299.47 A. Louisiana Revised Statutes 40:1299.47 A(2)(a) provides, in pertinent part:
The filing of the request for a review of a claim shall suspend the time within which suit must be instituted, ... until ninety days following notification, by certified mail, ... to the claimant or his attorney of the issuance of the opinion by the medical review panel....
In the present case, plaintiffs filed their request for the formation of a medical review panel with the DOA on January 5, 2004, and the opinion of the medical review panel was delivered to counsel for plaintiffs on September 18, 2006. Therefore, the ninety-day suspension of prescription lapsed on December 17, 2006, and prescription began to accrue again. Because plaintiffs' complaint was filed with the DOA on January 5, 2004, and the complaint alleged malpractice from January 5, 2003 through January 15, 2003, approximately ten days remained in the prescriptive period when prescription began to accrue on December 18, 2006.[4] Thus, because the petition in docket number XXXX-XXXXX was not filed until December 13, 2007, it is prescribed on its face.
Ordinarily, the party pleading prescription bears the burden of proving *939 the claim has prescribed. When the face of the petition reveals that the claim has prescribed, however, the burden shifts to the plaintiff to demonstrate that the running of prescription was suspended or interrupted. Lima v. Schmidt, 595 So.2d 624, 628 (La.1992). In this case, plaintiffs bore that burden of proof, and we conclude they did not meet that burden for the following reasons.
The first suit filed against SMH was dismissed for failure to timely request service pursuant to La. R.S. 13:5107 D, which states:
D. (1) In all suits in which the state, a state agency, or political subdivision, or any officer or employee thereof is named as a party, service of citation shall be requested within ninety days of the commencement of the action or the filing of a supplemental or amended petition which initially names the state, a state agency, or political subdivision or any officer or employee thereof as a party. This requirement may be expressly waived by the defendant in such action by any written waiver.
(2) If service is not requested by the party filing the action within that period, the action shall be dismissed without prejudice, after contradictory motion as provided in Code of Civil Procedure Article 1672(C), as to the state, state agency, or political subdivision, or any officer or employee thereof, who has not been served.
(3) When the state, a state agency, or a political subdivision, or any officer or employee thereof, is dismissed as a party pursuant to this Section, the filing of the action, even as against other defendants, shall not interrupt or suspend the running of prescription as to the state, state agency, or political subdivision, or any officer or employee thereof; however, the effect of interruption of prescription as to other persons shall continue.
(Emphasis added.)
The parties do not dispute that La. R.S. 13:5107 is applicable to the instant case and that SMH is a political subdivision.[5] Plaintiffs contend, however, that La. R.S. 13:5107 must be read in pari materia with La. C.C. art. 2324 C, which provides, "Interruption of prescription against one joint tortfeasor is effective against all joint tortfeasors." Plaintiffs assert that the filing of the initial suit interrupted prescription against another tortfeasor, Sibaji Shome, M.D., which effectively interrupted prescription as to all joint tortfeasors, including SMH.[6] In support of this position, plaintiffs cite Cali v. Cory, 04-1227 (La. 4th Cir.11/3/04), 886 So.2d 648, writ denied, 04-3155 (La.2/25/05), 894 So.2d 1153.
In Cali, the plaintiff, who appeared in her individual capacity and as natural tutrix for her minor child, filed a survival and wrongful death suit. When the State of Louisiana, through the Department of Transportation and Development ("DOTD") was named as a defendant in a supplemental and amending petition, DOTD filed exceptions urging the objections of untimely service and prescription. The Cali court held that the prescriptive period was interrupted as to DOTD by the filing of the initial petition against a defendant automobile driver, the driver's *940 insurer, and the decedent's uninsured/underinsured carrier and his excess umbrella carrier. The court reasoned that La. R.S. 13:5107 D and La. C.C. art. 2324 must be read in pari materia, and concluded that "[a]s long as prescription is interrupted against one joint tortfeasor, it is interrupted against all." Cali, 04-1227 at p. 5, 886 So.2d at 651. The court found that plaintiffs supplemented and amended petition asserted a claim of joint liability between DOTD and the other tortfeasors. Thus, the court determined that plaintiffs original petition interrupted prescription as to all joint tortfeasors. Further, the court concluded that plaintiffs' supplemental and amending petition naming DOTD as a joint tortfeasor related back to the original filing date of the initial petition and was timely served within ninety days of its filing.
We find the reasoning of Cali to be unpersuasive, and we decline to follow it. Where there is a conflict between two statutory provisions, the statute that is more specifically directed to the matter at issue must prevail over the statute that is more general in character. City of Pineville v. American Federation of State, County, and Municipal Employees, 00-1983, p. 5 (La.6/29/01), 791 So.2d 609, 613; Thomas v. Louisiana Dep't of Public Safety and Corrections, 02-0897, pp. 9-10 (La. App. 1st Cir.3/28/03), 848 So.2d 635, 640-41, writ denied, 03-2397 (La.11/21/03), 860 So.2d 552. Louisiana Civil Code article 2324 is a general rule addressing the interruption of prescription against joint tortfeasors. By contrast, La. R.S. 13:5107 is a more specific statute addressing the more narrow issue of the interruption of prescription when governmental defendants are involved in the litigation.
In Kimball v. Wausau Ins. Companies, 04-626 (La.App. 5th Cir.1/25/05), 892 So.2d 690, writ denied, 05-0755 (La.5/6/05), 901 So.2d 1104, the court applied this basic statutory interpretation rule when interpreting La. R.S. 13:5107 in a suit with analogous facts. Plaintiff, the father of a teenager killed in an automobile accident filed suit, naming as defendants the driver of the other vehicle involved in the accident, that driver's employer and insurer, the Parish of Jefferson, and the State of Louisiana. The plaintiff did not request service of process on the Parish of Jefferson, which filed a motion for involuntary dismissal based on the untimely service. Before the motion was decided, the plaintiff also filed a second suit against the Parish, seeking the same damages. The Parish filed an exception urging the objection of prescription in response to the second suit. The trial court ultimately granted the involuntary dismissal and maintained the exception. On appeal, the plaintiff urged that prescription was continuously interrupted because the second suit on the same subject matter was filed and timely served during the pendency of the first unserved suit. The Kimball court rejected the plaintiffs argument, concluding that prescription had never been interrupted as to the Parish:
We think the statute is clear, and that the language unambiguously carves out an exception to the general rules of prescription in favor of the state or its political subdivisions. La. R.S. 13:5107, a specific, special statute dealing with service of citation and process upon the state or a political subdivision, supersedes the general statutes (on service and prescription). Because the first suit in the present case was properly dismissed, prescription was never interrupted as to the Parish of Jefferson. [Footnote omitted.]
*941 Kimball, 04-626, p. 7, 892 So.2d at 693.[7]
In the instant case, we likewise conclude that La. R.S. 13:5107 D(3) is controlling, and because plaintiffs failed to timely request service of their initial lawsuit against SMH, the filing of the first lawsuit did not interrupt or suspend the running of prescription as to SMH, a political subdivision.[8] Thus, plaintiffs' claims against SMH had prescribed before the second lawsuit against SMH was filed.
Plaintiffs also urge that the consolidation of the second lawsuit against SMH with the original lawsuit still pending against Dr. Shome "cured" their failure to timely effect service of process on SMH. We find no merit in this contention. The consolidation of actions pursuant to La. C.C.P. art. 1561 is a procedural convenience designed to avoid multiplicity of actions and does not cause a case to lose its status as a procedural entity. Howard v. Hercules-Gallion Co., 417 So.2d 508, 511 (La.App. 1st Cir.1982). Procedural rights peculiar to one case are not rendered applicable to a companion case by the mere fact of consolidation; each case must stand on its own merits. Id. The consolidation of these two cases did not in any way enlarge or decrease the rights of the litigants. Procedural or substantive rights peculiar to one case are not rendered applicable to the companion suit by the mere fact of consolidation. Williams v. Scheinuk, 358 So.2d 340, 341-42 (La.App. 4th Cir.1978). The consolidation of actions does not merge them unless the records clearly reflect an intention to do so. Louviere v. Louviere, 01-0089, p. 25 (La App. 1st Cir. 6/5/02), 839 So.2d 57, 74, writs denied, 02-1848, 02-1868, 02-1877, 02-1878, 02-1879, (La.10/25/02), 827 So.2d 1150, 827 So.2d 1151, and 827 so.2d 1152. On the records before us, we find the trial court did not intend to effect a merger of the actions when he ordered the consolidation. In fact, the trial court declined to rule on the "merger" issue. Thus, we find that the consolidation of the second lawsuit against SMH with the original lawsuit against Dr. Shome did not "cure" plaintiffs' failure to timely effect service of process on SMH. We find no merit in this argument.
III. CONCLUSION
For these reasons, we affirm the trial court's May 1, 2008 judgment, which granted SMH's peremptory exception raising the objection of prescription. The trial court properly concluded that the medical malpractice claims against SMH had prescribed by the time the second suit was filed. Appeal costs are assessed against plaintiffs-appellants.
AFFIRMED.
GUIDRY, J., concurs in the result.
NOTES
[1] Plaintiff's petition identified this defendant as Slidell Memorial Hospital, who appeared for the purpose of filing exceptions and identified itself as St. Tammany Parish Hospital Service District No. 2 doing business as Slidell Memorial Hospital.
[2] Plaintiffs' petition misspelled Shome's first name as Sibaja.
[3] In ordering the consolidation, the trial court declined to rule on whether the consolidation order affected any "merger" of the actions.
[4] We note that although the plaintiffs' complaint filed with the Division of Administration alleged that malpractice occurred from January 5, 2003, through January 15, 2003, the petitions filed in the consolidated cases at issue infer that Mr. Mooney died on January 14, 2003.
[5] A "hospital service district" is "[a] political subdivision of the state of Louisiana organized pursuant to an Act of the Legislature of Louisiana or pursuant to R.S. 46:1051 et seq." La. R.S. 46:1072(2)(a).
[6] Plaintiffs submit that Dr. Shome's counsel answered the initial lawsuit and waived the 90-day service requirement.
[7] See also Matthews v. City of Bossier City, 42,202 (La.App.2d Cir 8/15/07), 963 So.2d 516, wherein the court concluded that a suit against governmental defendants neither interrupted nor suspended the applicable one-year prescriptive period, where plaintiff had failed to timely request service of his original petition, and plaintiff's supplemental and amending petition was filed after the one-year prescriptive period had run.
[8] In their appellate brief, plaintiffs challenge the constitutionality of La. R.S. 13:5107, but we do not consider this issue because it was not pleaded and made an issue in the trial court. See Vallo v. Gayle Oil Co., Inc., 94-1238, pp. 8-9 (La. 11/30/94), 646 So.2d 859, 864-65. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/3044788/ | United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 07-2761
___________
United States of America, *
*
Appellee, *
* Appeal from the United States
v. * District Court for the
* Northern District of Iowa.
Enrique Aragon-Hernandez, *
* [UNPUBLISHED]
Appellant. *
___________
Submitted: June 9, 2008
Filed: June 12, 2008
___________
Before MURPHY, COLLOTON, and SHEPHERD, Circuit Judges.
___________
PER CURIAM.
A jury found Enrique Aragon-Hernandez guilty of one count of conspiring to
distribute 500 grams or more of a methamphetamine mixture, in violation of 21 U.S.C.
§§ 841(a)(1), (b)(1)(A), and 846; two counts of aiding and abetting the distribution
of 50 grams or more of a methamphetamine mixture, in violation of section 841(a)(1),
(b)(1)(A), and 18 U.S.C. § 2; and one count of possessing a firearm in furtherance of
a drug-trafficking crime, in violation of 18 U.S.C. § 924(c)(1)(A). The district court1
sentenced him to a total of 211 months in prison and 5 years of supervised release.
1
The Honorable Mark W. Bennett, United States District Judge for the Northern
District of Iowa.
On appeal, Aragon-Hernandez argues that the evidence was insufficient to support the
verdict on the section 924(c)(1)(A) firearm count, and that, under the plain meaning
of the statute, the government was required to prove an overt act in order to establish
his possession of the firearm in furtherance of a drug-trafficking crime.
Viewing the evidence in the light most favorable to the government, as we
must, we cannot say that a reasonable juror must have harbored a reasonable doubt
regarding an essential element of the offense. See United States v. Birdine, 515 F.3d
842, 844 (8th Cir. 2008) (standard of review); United States v. Sanchez-Garcia, 461
F.3d 939, 946-47 (8th Cir. 2006) (to secure conviction under § 924(c)(1)(A),
government must present evidence from which reasonable juror could find nexus
between defendant’s possession of charged firearm and drug crime, such that this
possession had effect of furthering, advancing, or helping forward drug crime).
We also find no merit to Aragon-Hernandez’s argument that section
924(c)(1)(A) requires proof of an overt act. See United States v. Alaniz, 235 F.3d
386, 389 (8th Cir. 2000) (possession-in-furtherance-of-a-crime language in
§ 924(c)(1)(A) does not require active employment of firearm in relation to predicate
offense).
Accordingly, we affirm the judgment of the district court.
______________________________
-2- | 01-03-2023 | 10-13-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1644949/ | 363 Mich. 143 (1961)
108 N.W.2d 865
In re CARTWRIGHT.
HAKENJOS
v.
CARTWRIGHT.
Docket No. 43, Calendar No. 48,887.
Supreme Court of Michigan.
Decided April 26, 1961.
Samuel H. Olsen, Prosecuting Attorney, Hobart Taylor, Jr., and Aloysius J. Suchy, Assistant Prosecuting Attorneys, for plaintiff.
Reymont Paul, for defendant.
CARR, J.
Appellant herein was appointed as a bailiff of the common pleas court of the city of Detroit in 1941, and thereafter proceeded for a number of years to perform the duties of said office in connection with the service of process. By order of 3 judges of said court he was removed on January 27, 1960, and his name stricken from the list of bailiffs. Such action was taken following a hearing, before the judges signing said order, on a petition filed by the clerk of said court, on January 6th preceding, alleging that defendant had abandoned and vacated the office in violation of statute because of his failure to serve process assigned to him. From the order entered an appeal was taken to the circuit *145 court of Wayne county which, under date of July 21, 1960. affirmed the order of the common pleas court. In connection with the proceeding in the circuit the parties filed a stipulation of facts in lieu of a transcript of the testimony taken on the hearing above mentioned. On appeal to this Court it is the claim of defendant that the order of removal was unauthorized by law and unwarranted under the facts.
The stipulation of facts filed in circuit court, and incorporated in the record before us, sets forth that in his capacity as bailiff appellant served process from the common pleas court until July, 1958, when he advised the clerk of the court that he wished to take a vacation and requested that process assigned to him should be delivered to another bailiff for service. Apparently the request was complied with, the clerk presumably assuming that appellant's vacation period would be reasonably limited. However, during the period from July, 1958, until early in January, 1960, another bailiff, Gerald Clancy, continued to serve process assigned to defendant under a rotating system initiated by the court, a portion of the fees received therefor being turned over to defendant. Apparently he received during the period in question amounts varying from $35 to $150 per month while giving his time and efforts to his personal business affairs.
It was further stipulated that the practice had been observed on occasions by the bailiffs in the common pleas court to work "in teams", assisting one another in the service of process. It does not appear, however, that arrangements of the character entered into by Mr. Cartwright had been made by other bailiffs or had been sanctioned by the judges of the court. It is a fair inference that the practice referred to in the stipulation was adopted in some instances to facilitate the service of process and to *146 insure the making of proper service in the event that the bailiff to whom the process had been assigned in rotation was unable to act. In 1957 appellant signed a statement or declaration, at the request of the clerk of the court, setting forth his willingness and ability to serve process. In the early part of 1960 he renewed performance of the duties of his office, for which he received fees paid after the date of the institution of the removal proceeding.
On the filing of the petition asking Mr. Cartwright's removal from the office of bailiff the clerk was directed by the presiding judge of the common pleas court to omit the name of appellant from the list of bailiffs authorized to serve process in garnishment and assumpsit proceedings. Such order did not prevent appellant from serving writs of execution, replevin, and attachment. Whether he actually served such writs following the order of suspension does not appear.
The common pleas court of the city of Detroit is governed by the provisions of PA 1929, No 200 as amended (CL 1948, § 728.1 et seq., as amended [Stat Ann and Stat Ann 1959 Cum Supp § 27.3551 et seq.]). The statute fixes the jurisdiction of the court, provides for the election of the judges and duties thereof, and for the appointment of a clerk and bailiffs. Section 28 of the act (CL 1948, § 728.28 [Stat Ann 1959 Cum Supp § 27.3679]) reads as follows:
"Every bailiff of the city in which the court is situated serving process out of any such court shall be answerable thereto for all his conduct in the line of duty; and it shall be the duty of every such court to compel bailiffs serving process out of such court to perform their duties, to examine into complaints against them, to determine their guilt or innocence of misfeasance and/or malfeasance in office and to discipline any offending bailiffs in manner as herein provided. Inquiry into the conduct of any bailiffs *147 serving process out of any such court shall be instituted on complaint by the clerk thereof or by any person conceiving himself aggrieved, in manner as hereinafter provided, and may be instituted by such court on its own motion whenever the presiding judge or whenever any judge or judges thereof assigned to deal with such matters consider it expedient to do so. Where the inquiry is instituted on the court's own motion the procedure shall be as prescribed by court rule adopted by a majority of the judges of such court. On complaint in writing by the clerk of any such court or in writing under oath by or on behalf of any person conceiving himself aggrieved, to the presiding judge or such other judge or judges thereof assigned to receive such complaint, stating allegations of fact from which it appears to the examining judge that any bailiff serving process out of such court is guilty of any misconduct in office, such judge shall issue an order in writing directed to such bailiff requiring him to appear before the presiding judge or any judge or judges of said court assigned to hear such complaint, at a time fixed in such order, and show cause why said court should not take disciplinary action against such bailiff. A copy of said complaint and order shall be served on such bailiff prior to the date of hearing, the time and manner of service to be fixed in the order. No complaint, after the filing thereof as aforesaid, may be withdrawn nor shall the same or any proceeding thereon be dismissed or discontinued except by written order of the court for good cause shown, the reasons therefor to be stated in the order. The judge or judges hearing said complaint may permit or, on the court's own motion, order the filing of amendments thereto, may continue the hearing thereon from time to time, as the ends of justice may require, and, at any time prior to the final disposition of such matter, may require the prosecuting attorney of the county where such court is situated to prosecute said complaint, and the county where such court is situated shall pay the fees for *148 such witnesses, depositions, if any, and such other evidence adduced by such prosecutors as the judge or judges in charge of said proceedings shall approve or certify to the board of county auditors. No fees shall be allowed or paid to such prosecutors for their services. In the event such bailiff shall be found guilty of any misfeasance and/or malfeasance in office as herein defined, the trial judges shall have power, in their discretion, as follows: (a) permanent removal from office of such officer; (b) suspension from office for a definite period; (c) a finding of contempt of court and the imposition of a penalty therefor as provided by law. The punishment, provided in clause (c) hereof, may be imposed concurrently with the provision in cause (a) or (b) hereof. All findings of guilt and all orders of punishment may be confirmed by a majority of the judges of the court. The findings of fact made by such judges shall be based upon a record stenographically reported: Provided, however, That an appeal from the order of such judges shall lie to the circuit court of the county in which such court is located on all questions of law and facts and upon said record, and a further appeal to the Supreme Court of the State of Michigan."
It is the claim of appellant that the making and carrying out of the arrangement for the service of process assigned to him in rotation did not constitute misfeasance in office. In substance it is argued in his behalf that he was within his rights in procuring another bailiff to serve such process, and to share in the fees therefor. Reliance is placed in this regard on a provision of section 23 of the act (CLS 1956, § 728.23 [Stat Ann 1959 Cum Supp § 27.3674]) requiring that the bailiffs "shall promptly serve or cause to be served and execute all process, writs and/or orders delivered to them as herein provided." It is asserted in substance that appellant caused process assigned to him to be served and that, in *149 consequence, he complied with the letter of the statute. The judges of the court of common pleas disagreed with such claim, concluding that the conduct of defendant did not constitute proper performance of the duties of his office, and that under the language of the statute above quoted it was the duty of the court to take action. Such conclusion was summarized as follows:
"It is clear, unquestionably clear, that this respondent did not obey the dictates of the statute in that regard and that he showed a complete lack of diligence amounting to an abandonment of the office of bailiff of the common pleas court.
"We also find from the testimony in this case that the defendant from the testimony is guilty of misfeasance. Therefore, the name of respondent Arthur Cartwright is ordered stricken from the list of bailiffs of the common pleas court, and the said Arthur Cartwright is hereby ordered removed from the office of bailiff of the common pleas court and the said office is hereby declared vacant."
Appellant contends that he did not abandon the office of bailiff and directs attention to the fact that in January, 1960, he served some process. It is a fair inference, however, that his action in this regard was prompted by the fact that the question had been raised as to the propriety of the arrangement for the service of process which in effect relieved him from the performance of his official duties, thus permitting him to devote his entire time and attention to private business matters. It is not disputed that during the period of approximately 1-1/2 years he did not personally perform his duties as bailiff, required by statute to serve process assigned to him, but, rather, undertook to delegate such duties to a fellow bailiff. It is clear that he practically ignored the office other than to share in the fees paid for service of process made by another.
*150 The judges of common pleas court pointed out in their opinion, based on the testimony taken before them, that during the period in question from July, 1958, to early in January, 1960, appellant had no knowledge as to the number of summons or writs assigned to him for service, that he kept no record thereof, and that he did not attempt to ascertain whether process issued to him had been served. The conclusion may not be avoided that Mr. Cartwright was not performing the duties of his office in the manner contemplated by the statute. From a practical standpoint he abandoned performance of his official duties during a period of approximately 18 months.
Did the acts of the defendant on the basis of which the order of removal was made constitute misfeasance within the meaning of the section of the controlling statute, above quoted? The term is defined in 67 CJS, Officers, § 60, p 250, as follows:
"`Misfeasance,' as a cause for removal from office, is a default in not doing a lawful thing in a proper manner, or omitting to do it as it should be done."
The fee-splitting arrangement into which defendant entered with his fellow bailiff enabled him to receive compensation for services that he did not personally render. His lack of attention to the work of his office was not consistent with his duties as a public officer. The arrangement made was not consistent with sound principles of public policy relating to the performance of official acts for which the incumbent of the office was charged with personal responsibility. If such an arrangement may be made within the purview of the statute, it is obvious, as suggested by counsel for appellee in argument, that other bailiff's might follow a similar course, thereby creating a situation interfering with the proper performance *151 of their duties and at variance with the proper functioning of the court of which they are officers.
Defendant's course of conduct was not only unauthorized by the statute under which he held his office but was inconsistent with the manifest intention of the legislature as expressed in the language pertaining to the duties of bailiffs and the authority of the court with reference thereto. We think that conduct of such character must be regarded as constituting misfeasance in office within the commonly-accepted definition of that term. The duty clearly rested on appellant to properly perform the duties of the office to which he had been appointed.
In view of the factual situation this case is somewhat unusual, but general principles applicable to public offices are in accord with the finding and order of the common pleas court and of the circuit court of Wayne county. State, ex rel. Rockwell, v. State Board of Education, 213 Minn 184 (6 NW2d 251, 143 A.L.R. 503); People, ex rel. Johnson, v. Coffey, 237 Mich. 591 (52 A.L.R. 1); 67 CJS, Officers, § 60, p 250 et seq.; 43 Am Jur, Public Officers, § 195 et seq., p 39 et seq.
The order of the circuit court from which defendant has appealed is affirmed. Questions at issue being matters of public concern, no costs are allowed.
DETHMERS, C.J., and KELLY, SMITH, BLACK, EDWARDS, KAVANAGH, and SOURIS, JJ., concurred. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919714/ | 245 Pa. Super. 244 (1976)
369 A.2d 385
YOUNG ANTICS, INC., In its Own Right and New York Credit Men's Adjustment Bureau, as Signee for the Benefit of Creditors of Young Antics, Inc.
v.
JAYMAR REALTY CORP. and A.P. Warnick, Appellants.
Superior Court of Pennsylvania.
Argued September 9, 1975.
Decided November 22, 1976.
*245 Joseph J. Musto, Wilkes-Barre, for appellants.
John H. Doran, Wilkes-Barre, for appellees.
Before WATKINS, President Judge, and JACOBS, HOFFMAN, CERCONE, PRICE, VAN der VOORT and SPAETH, JJ.
SPAETH, Judge:
This action in trespass was tried before a judge without a jury, pursuant to Pa.R.C.P. 1038.[1] A "verdict" was rendered for appellees on May 20, 1974. Appellants filed motions for new trial and judgment n.o.v. on May 24, 1974. Appellees moved to quash the motions on the ground that appellants had not complied with Pa.R.C.P. 1038(d), which provides:
Within twenty (20) days after notice of the filing of the decision, exceptions may be filed by any party to the decision or any part thereof, to rulings on objections to evidence or to any other matters occurring during the trial. Each exception shall set forth a separate objection precisely and without discussion. Matters not covered by exceptions are deemed waived unless, prior to final judgment, leave is granted to file exceptions raising these matters. No motion for a new trial, for judgment non obstante veredicto, in arrest of judgment or to remove a nonsuit may be filed. (Emphasis added)
*246 The court below, sitting en banc, granted the motion to quash. We affirm.
The question is, What will be deemed compliance with Pa.R.C.P. 1038(d)? Since the Rule explicitly forbids the filing of motions for new trial and judgment n.o.v., appellants have not complied with it, if it is to be applied literally. Appellants urge, however, that the rule should not be applied literally, and they advance two arguments: first, their error should be excused because the trial judge and the prothonotary also failed to comply with Rule 1038; and second, at least certain of the points raised in the motion for new trial were sufficiently specific to serve as exceptions and should therefore be treated as such.[2]
Appellants' first argument is not convincing. The trial judge denominated his decision a "verdict", a term more appropriate to a jury's decision, as appellants rightly state. Rule 1038 uses throughout the term "decision." However, we agree with the court en banc that this is a "quibble over captions." Appellants argue that just such a quibble was fatal to their post-trial motions, but there are two important differences. First, the terms "motion for new trial" and "motion for judgment n.o.v.," unlike the terms "decision" and "verdict," are formal titles, each with a specific and different meaning. Arguably, miscaptioning a motion might mislead, whereas it seems impossible that a judge's rendering a "verdict" would fail to inform that he had reached a "decision." Second, Rule 1038 does not forbid the rendering of a "verdict"; it does forbid motions for new trial and judgment n.o.v. Appellants also complain that the prothonotary *247 failed to notify them of the date of filing of the decision, in contravention of Rule 1038(c). We agree with the court en banc that appellants "clearly were not prejudiced in any way, for copies of the trial judge's decision were mailed to counsel from the judge's chambers immediately upon filing, and obviously these were received by counsel, for the Motions for New Trial and Judgment N.O.V. were filed within four days after entry and filing of the decision."
Appellants' second argument is somewhat more substantial. Their motion for new trial advanced the following reasons:
1. The verdict was against the evidence.
2. The verdict was against the weight of the evidence.
3. The verdict was against the law.
4. The verdict is inconsistent in that the conclusions of the Court, as a matter of law prohibit a finding in favor of the Plaintiffs.
5. The verdict is inconsistent in that the Court concludes that the sale "was validly conducted" which prohibits the further finding that the proceeds realized therefrom were inadequate.
6. The Court had before it no evidence to support the conclusions that the proceeds realized from the sale were inadequate.
While numbers 1-3 are boilerplate, and number 4 adds nothing to number 3, number 5, and perhaps number 6, are sufficiently specific to be treated as exceptions. Appellants argue that their disobedience of Rule 1038(d) should therefore be excused in accordance with the principle stated in Pa.R.C.P. 126: "The court at every stage of any . . . action or proceeding may disregard any error or defect of procedure which does not affect the *248 substantial rights of the parties." That principle, however, must be balanced against Pa.R.C.P. 127(b): "Every rule shall be construed, if possible, to give effect to all provisions. When the words of a rule are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." This court has made it clear that in a case like this one, between these two principles, that of Rule 127(b) will prevail. In Baker v. Roslyn Swim Club, 206 Pa.Super. 192, 213 A.2d 145 (1965), appellants filed motions for new trial and for judgment n.o.v. The statute then applicable, Act of April 22, 1874, P.L. 109, as amended §§ 1-2, 12 P.S. §§ 688-689, did not provide for such motions, but rather for exceptions. Nevertheless the court below treated the reasons assigned in the motion for new trial as exceptions to findings of fact, and the motion for judgment n.o.v. as an exception to the conclusion of law. On appeal this court said: "Since the court below handled the matter in that fashion without objection by either party, we shall do likewise, but our action in so doing must not be regarded as a precedent in future cases. The Act of 1874 is explicit in setting forth the procedure and it should be followed." 206 Pa.Super. at 193-94, 213 A.2d at 146-47. Since Rule 1038(d) not only explicitly sets forth the procedure that should be followed but also explicitly sets forth the procedure that may not be followed, a fortiori the warning in Baker should control here.
This is is especially so since in other cases lower courts have heeded Baker, and have refused to bend the rules for other careless parties. See Balke v. Vallier, 23 Chest. 258 (1974); Brown v. Baughman, 15 Adams Co. L.J. 66 (1973) (opposing party's objection to motion for new trial sustained, relying on Baker; leave granted to file exceptions within twenty days; no exceptions ever filed); Lehigh Valley Railroad v. Krapf's Truck Service, 56 D. & C.2d 259 (1971) (Baker cited; motion to strike *249 motion for new trial sustained, both because opposing party objected and because no specific reasons given in motion for new trial). It would be unfair to such other losing parties to excuse appellants. When we say, as we did in Baker, that "our action . . . must not be regarded as a precedent," we should be understood as addressing not only the trial courts and bar but also ourselves.
It may be granted that Rule 1038's insistence on exceptions and proscription of any other form of motion are not easily explained. Were there a significant difference between exceptions and motions for new trial for example, if the former were always specific while the latter could be only general the purpose of the rule would be clear. However, our common law has long required that a motion for new trial set forth "the reasons assigned . . . with such clarity that both the court and the adverse party may be informed of the import of such reasons and given sufficient opportunity to meet them." Evans v. Otis Elevator Co., 403 Pa. 13, 30, 168 A.2d 573, 581 (1961); see also Megliss v. Bartoletta, 159 Pa.Super. 308, 311, 48 A.2d 18, 20 (1946). Our trial courts repeatedly insist on specificity in motions for new trial. See, e.g., Spicer v. Yorktowne Mutual Insurance Co., 9 Adams Co.L.J. 41 (1967); Smith v. Motor Freight Express, Inc., 81 Dauphin 121 (1963); Barry v. Pittsburgh Railways Co., 111 Pitts.L.J. 452 (1963). There being no apparent substantive difference between exceptions and a motion for new trial, it follows that Rule 1038(d) requires correct captioning merely as a matter of form. Whether this is a useful requirement is not for this court to determine. We suggest, however, that the Procedural Rules Committee of the Supreme Court may wish to review it.
Affirmed.
*250 PRICE, J., concurs in the result.
HOFFMAN, J., files a dissenting opinion in which WATKINS, President Judge, joins.
HOFFMAN, Judge, dissenting:
I dissent.
Rule 126, Pa.R.C.P., provides "[t]he rules shall be liberally construed to secure that just, speedy and inexpensive determination of every action or proceeding to which they are applicable. The court at every stage of any such action or proceeding may disregard any error or defect of procedure which does not affect the substantial rights of the parties." The instant case is squarely within this rule.
The Majority notes that "[t]here being no apparent substantive difference between exceptions and a motion for new trial, it follows that Rule 1038(d) requires correct captioning merely as a matter of form." Opinion at p. 249. Thus, under the Majority's reasoning, it is clear that we are forced to sanction a holding which prevents a "just, speedy and inexpensive determination of [this] action." The Majority cites Rule 127(b) as authority for its position. That subsection provides as follows: "Every rule shall be construed, if possible, to give effect to all its provisions. When the words of a rule are clear and free from all ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit." I agree that if the holding which I propose frustrated a cognizable policy of Rule 1038, Rule 127 would mandate a contrary result. Cf. Rule 127(c). But this is not such a case. To hold as the Majority does is to allow procedural rules to become an end in themselves. We should be mindful of Justice Stern's sage counsel: "Procedural rules are not ends in themselves but means whereby justice, as expressed in legal principles, is administered. They are not to be exalted to the status of substantive objectives." *251 McKay v. Beatty, 348 Pa. 286, 287, 35 A.2d 264, 265 (1944). It was for that reason that Rule 126 was promulgated.
Therefore, I would reverse and remand for further proceedings.
WATKINS, President Judge, joins in this dissenting opinion.
NOTES
[1] Rule 1038 dictates the procedure for trials without a jury in actions in assumpsit. Its provisions are made applicable to actions in trespass by Pa.R.C.P. 1048.
[2] Appellants also argue the merits of the case. Because we affirm the order of the court below quashing the motions for new trial and judgment n.o.v. we do not reach the merits. Appellants also argue that if the order is upheld, still they should have been given leave to file exceptions nunc pro tunc. However, appellants suggest no reason why the court below should have given them this leave, beyond the reasons that will be discussed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919719/ | 369 A.2d 592 (1977)
George R. WOODY, Appellant,
v.
UNITED STATES, Appellee.
Nos. 9117, 10888.
District of Columbia Court of Appeals.
Argued December 7, 1976.
Decided February 10, 1977.
Rehearing en Banc Denied April 26, 1977.
*593 Nathan Rubinstein, Bethesda, for appellant.
Neil A. Kaplan, Asst. U. S. Atty., Washington, D. C., with whom Earl J. Silbert, U. S. Atty., John A. Terry and Albert H. Turkus, Asst. U. S. Attys., Washington, D. C., were on the brief, for appellee.
Before KERN, GALLAGHER and YEAGLEY, Associate Judges.
YEAGLEY, Associate Judge:
Appellant was tried and convicted of armed robbery (D.C. Code 1973, §§ 22-2901, 22-3202), robbery (D.C. Code 1973, § 22-2901), assault with a dangerous weapon (D.C. Code 1973, § 22-502) and possession of a prohibited weapon (D.C. Code 1973, § 22-3214(b)). On appeal he challenges his conviction in four respects: (1) the failure of trial counsel to investigate the case and make proper objections at trial constituted ineffective assistance of counsel; (2) various omissions by counsel, including the failure to object to a jury instruction, amounted to plain error so as to require a new trial; (3) the trial court improperly denied a motion for a new trial based on newly discovered evidence; and (4) the convictions for robbery, assault with a dangerous weapon, and possession of a prohibited weapon must be vacated since such offenses are merged in the armed robbery conviction. We affirm the convictions for armed robbery and possession of a prohibited weapon, but vacate the convictions of robbery and assault with a dangerous weapon.
Briefly, the government's evidence established that appellant robbed the owner of a liquor store at gunpoint on the afternoon of July 31, 1974. At the very moment of the robbery, three Metropolitan Police officers were in a marked patrol car in the immediate vicinity. As they passed the liquor store, one officer glanced out the rear window and saw a man running from the store. The officers observed him get into the passenger side of an automobile parked near the store and, seconds later, saw the complainant come out of the store waving his arms and gesturing towards the fleeing man. The officers immediately followed the car and apprehended its two occupants after a high-speed chase. Appellant was then returned to the scene where the complainant positively identified him as the robber.
Appellant first argues that his conviction cannot stand because he was deprived of effective assistance of counsel in violation of the Sixth Amendment. This court in Angarano v. United States, D.C. App., 312 A.2d 295 (1973), petition for reconsideration denied, 329 A.2d 453 (1974) (en banc), endorsed the test adopted in Bruce v. United States, 126 U.S.App.D.C. 336, 379 F.2d 113 (1967), and Cooper v. United States, D.C.App., 248 A.2d 826 (1969), for evaluating claims of ineffective assistance of counsel. An attorney's representation will not be deemed ineffective unless "there has been gross incompetence *594 of counsel and that this has in effect blotted out the essence of a substantial defense." Bruce v. United States, supra, 126 U.S.App.D.C., at 339-40, 379 F.2d at 116-17. This standard of constitutional ineffectiveness applies only as a remedy in exceptional cases, and "an attack upon trial counsel is not a device to be used on appeal except in the most severe cases of glaring ineptitude." Angarano v. United States, supra at 300. Moreover, a substantial defense lost due to incompetence must be shown to be a defense as a matter of law and available from facts known or obvious to the trial attorney. Id. Mere errors of judgment as disclosed by subsequent events or hindsight are not sufficient to establish ineffective assistance. United States v. Hammonds, 138 U.S.App.D.C. 166, 425 F.2d 597 (1970).
In the present action, appellant Woody bases his claim of inadequate representation on a variety of tactical decisions and omissions by trial counsel which cannot be considered to have resulted in a constitutional infirmity.[1] A reading of the record indicates that these omissions, either separately or in the aggregate, did not blot out the essence of a substantial defense. Viewed objectively, appellant's representation was effective and strategically prudent. Having so concluded, we need not discuss appellant's contention that his due process right to a fair trial was also violated.
Appellant argues next that the trial court's instruction concerning the flight of a defendant from the crime scene was plain error which independently requires reversal. He contends that the instruction was fatally defective because it omitted a statement that flight may be motivated by factors which are fully consistent with innocence. We agree that the instruction was incomplete but do not agree that it or other omissions by trial counsel constituted plain error affecting substantial rights of the defendant. See Super.Ct.Cr.R. 52. The instruction is virtually identical to a charge given by the trial court in Austin v. United States, 134 U.S.App.D.C. 259, 414 F.2d 1155 (1969), which was found inadequate but amounted only to harmless error.
We also reject appellant's contention that the trial court abused its discretion in denying a motion for a new trial based on newly discovered evidence and in precluding a hearing on such motion.
The prerequisites for granting a new trial because of newly discovered evidence are: (1) the evidence must have been discovered since the trial; (2) the party seeking the new trial must show diligence in the attempt to procure the newly discovered evidence; (3) the evidence relied on must not be cumulative or impeaching; (4) it must be material to the issues involved; and (5) it must be of such a nature that in a new trial it would probably produce an acquittal. Heard v. United States, D.C.App., 245 A.2d 125 (1968). The trial court has broad discretion as to whether a new trial should be granted because of newly discovered evidence, and its action will not be disturbed on appeal unless an abuse of that discretion appears. McDonnel v. United States, 81 U.S.App. D.C. 123, 155 F.2d 297 (1946).
The various tactical decisions and omissions cited by appellant cannot properly be characterized as "newly discovered evidence". Also, in light of the strength of the government's evidence, it is not probable that they would lead to an acquittal at a new trial.
Finally, appellant Woody contends that his convictions of robbery, assault with a dangerous weapon and possession *595 of a prohibited weapon merge into the armed robbery conviction and the sentences for those three offenses must therefore be vacated. The government concedes that the robbery and assault with a dangerous weapon convictions should be vacated, Bell v. United States, D.C.App., 332 A.2d 351 (1975), but argues that the possession of a prohibited weapon offense should stand. We agree. Where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one is whether each provision requires proof of a fact which the other does not. Blockburger v. United States, 284 U.S. 299, 52 S. Ct. 180, 76 L. Ed. 306 (1932). A conviction under D.C.Code 1973, § 22-3214(b) for possession of a prohibited weapon requires proof of the specific intent to use the weapon unlawfully against another, an element not present in armed robbery, robbery, or assault with a dangerous weapon.
Accordingly, the convictions of robbery and assault with a dangerous weapon are vacated. In all other respects the judgment of the trial court is affirmed.
So ordered.
NOTES
[1] Specifically, appellant alleges that counsel failed to (1) secure a record of his bank account which might have been used to explain his possession of funds equal to that stolen in the robbery; (2) attempt to locate an unknown witness who appellant claimed was present in the liquor store at the same time of the robbery; (3) file pretrial motions; (4) object to any of the testimony or to misstatements of the evidence in the government's closing argument; (5) request or object to jury instructions; and (6) adequately consult with him prior to trial. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1919668/ | 541 A.2d 1194 (1988)
FORTE BROTHERS, INC.
v.
STATE of Rhode Island, DEPARTMENT OF TRANSPORTATION.
J.L. MARSHALL & SONS, INC.
v.
STATE of Rhode Island, DEPARTMENT OF TRANSPORTATION.
Nos. 87-23-A., 87-338-A.
Supreme Court of Rhode Island.
June 3, 1988.
Peter L. Kennedy, Providence, for J.L. Marshall & Sons, Inc.
Michael A. Kelly, Providence, for Forte Bros.
James E. O'Neil, Atty. Gen., Richard B. Woolley, Asst. Atty. Gen., for defendant.
OPINION
WEISBERGER, Justice.
These consolidated cases come before us on appeal by the defendant from an order issued in the Superior Court compelling arbitration of contract disputes that have arisen relating to a series of bridge and highway construction contracts that had been separately entered into between the plaintiffs and the defendant subsequent to July 1, 1967, but prior to July 2, 1986. The defendant contends that the trial justice erred in his retroactive application of an amendment to G.L. 1956 (1984 Reenactment) § 37-16-2(b). We affirm. The facts of this case may be briefly stated as follows.
*1195 Forte Brothers, Inc., had entered into several contracts to construct certain bridges and highways for the Department of Transportation, and J.L. Marshall & Sons had entered into a contract with the Department of Transportation to construct a bridge. A dispute had arisen between both plaintiffs and defendant concerning the amount due on the contracts. During the pendency of this dispute, on July 2, 1986, the General Assembly by virtue of P.L. 1986, ch. 479, amended § 37-16-2(b) to read as follows:
"(b) Every contract for the construction, alteration, repair or painting or demolition of any public building, sewer, water treatment disposal project, highway or bridge one (1) party to which is the state, a city, a town, or an authority, a board, a public corporation or any similar body created by statute or ordinance or any committee, agency or subdivision of any of them which has a contract price of ten thousand dollars ($10,000) or more and which is executed on or after July 1, 1967, shall contain a provision for arbitration of disputes and claims arising out of, or concerning the performance or interpretation of, the contract as follows: * * *." (Emphasis supplied in respect to words added by amendment.)
In short the sole purpose of the 1986 amendment was to expand the arbitration statute to provide arbitration in respect to contracts for the construction, alteration, repair, or painting or demolition of any highway or bridge in addition to contracts previously covered. It is highly significant that the amended statute provided (as before) for arbitration in regard to every contract "executed on or after July 1, 1967."
The defendant argues vigorously that under usual canons of construction, retroactive application of a statute is to be avoided absent a clear expression of intent by the General Assembly. However, the converse is also true that an amendment to a statute may be applied retroactively if the intention of the Legislature to do so is clearly expressed either by the language of the statute or by a necessary implication. Lawrence v. Anheuser-Busch, Inc., 523 A.2d 864, 869 (R.I. 1987); Dulgarian v. City of Providence, 507 A.2d 448, 453 (R.I. 1986); Spagnoulo v. Bisceglio, 473 A.2d 285, 287 (R.I. 1984).
In the case at bar, the amendment approved July 2, 1986, did no more than add another type of contract to those already included within the arbitration statute. It did not change the effective date of contracts to which arbitration would apply, namely, July 1, 1967. It thus appears clear beyond doubt that the General Assembly intended retroactive application of its arbitration requirement to any highway or bridge contract that had a price of $10,000 or more and which was executed on or after July 1, 1967. As we have frequently stated, when the words of a statute are clear, no canons of statutory construction are necessary to its interpretation. E.g., Lawrence v. Anheuser-Busch, Inc., 523 A.2d 864 (R.I. 1987); Quigley v. Town of Glocester, 520 A.2d 975 (R.I. 1987). We believe that the statutory mandate is clear.
The defendant also argues that this statute is substantive in that it deprives the department of its right to a judicial trial as opposed to a determination by an arbitrator. We are of the opinion that the provision for arbitration is procedural rather than substantive. However, this conclusion would not be dispositive in regard to the case at bar since "clear enunciation of a legislative choice overrides any constructional preference for prospective or retrospective application that might otherwise obtain." Raymond v. Jenard, 120 R.I. 634, 637, 390 A.2d 358, 359 (1978). The defendant also seems to argue that retroactive application of a provision for arbitration in these circumstances might give rise to constitutional difficulties. Any such suggestion is clearly without merit. The Rhode Island Constitution reposes all legislative power in the General Assembly by virtue of article 6, section 2. In addition, article 6, section 10, provides: "The general assembly shall continue to exercise the powers it has heretofore exercised, unless prohibited in this Constitution." The Rhode Island General Assembly has therefore *1196 been clothed with all legislative powers unless specifically forbidden by the constitution. See, e.g., Gorham v. Robinson, 57 R.I. 1, 186 A. 832 (1936); Providence v. Moulton, 52 R.I. 236, 160 A. 75 (1932). Since the time of the charter of King Charles II the power of the Rhode Island General Assembly has been plenary. Gelch v. Board of Elections, 482 A.2d 1204, 1208 (R.I. 1984); Payne & Butler v. Providence Gas Co., 31 R.I. 295, 315-17, 77 A. 145, 154 (1910). This plenary power still exists save insofar as it may be prohibited in express terms by the constitution of this state or limited by the federal constitution.
There is no question that as far as any state department, including the Department of Transportation is concerned, the Legislature may waive any right that heretofore existed in respect to the resolution of any dispute. Even though the Legislature may not abrogate the right of Rhode Island citizens to a jury trial, State v. Vinagro, 433 A.2d 945 (R.I. 1981), no such inhibition would arise in respect to its waiving any such right on behalf of the state itself. Consequently, in the case at bar the substantive versus procedural analysis is of little or no importance.
The defendant also argues that the trial justice should not have departed from a decision rendered in an earlier case, Cardi Corp. v. City of Warwick, C.A. No. 84-2939, in which the Cardi Corporation attempted to apply a 1984 amendment to § 37-16-2 (providing for arbitration) to a contract executed prior to the effective date of such amendment. Another justice of the Superior Court had decided that said amendment was prospective and not retrospective in application. Although the foregoing case dealt with a municipal corporation as opposed to the state itself and therefore may have been distinguishable on that ground, we take this opportunity to dispel any notion that Superior Court justices are bound by prior decisions made by their colleagues. It is true that we have adopted a general rule of convenience that in a particular case a decision made by one judge of coordinate jurisdiction should not in the absence of special circumstances be set aside by another justice passing upon the identical question in the same case. Goodman v. Turner, 512 A.2d 861, 864 (R.I. 1986); Salvadore v. Major Electric & Supply, Inc., 469 A.2d 353, 355-56 (R.I. 1983). See Rhode Island Hospital Trust National Bank v. National Health Foundation, 119 R.I. 823, 384 A.2d 301 (1978).
However, we shall not extend the doctrine of law of the case to provide a rule of stare decisis regarding decisions of trial courts as having binding effects upon other members of the same or coordinate trial courts. Obviously, a well-reasoned decision of a trial justice of coordinate jurisdiction may have a persuasive effect upon another justice of a trial court. However, only the decisions of this court are of binding effect upon all justices of trial courts of this state.
It has also been argued by the plaintiffs that the defendant's appeal in this case is interlocutory and therefore should not be considered by this court at this time. We consider that an order for arbitration in the context of the case at bar has sufficient elements of finality, McAuslan v. McAuslan, 34 R.I. 462, 83 A. 837 (1912), so that appellate review is called for before the case is finally terminated. In these days of significant trial delay, an order that requires a party to go forward with arbitration should be tested in this court upon the application of the objecting party before requiring the case to be fully litigated in a tribunal whose jurisdiction has been challenged. Moreover, in the instant case, since we are considering a method of resolution of public contracts, the interest of the public in a prompt and definitive determination of the procedural method of resolution is of significant importance and should outweigh any reluctance that this court may have manifested in the past in respect to the consideration of interlocutory appeals.
For the reasons stated, the defendant's appeal is denied and dismissed. The order entered in the Superior Court is affirmed, and the papers in the case may be remanded to the Superior Court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1559491/ | 109 N.H. 279 (1969)
STATE
v.
ROBERT C. SLATER.
No. 5788.
Supreme Court of New Hampshire.
Argued September 5, 1968.
Decided January 31, 1969.
George S. Pappagianis, Attorney General, and Henry F. Spaloss, Assistant Attorney General (Mr. Spaloss orally), for the State.
Leonard, Leonard & Prolman (Mr. David M. Prolman orally), for the defendant.
GRIFFITH, J.
This is an appeal from a conviction of operating a motor vehicle while under the influence of intoxicating liquor. The defendant's exceptions to admission of evidence, rulings of law and to the Court's charge were reserved and transferred on an agreed statement of facts by Morris, J.
The defendant's first exception is to the admission of the results of a blood test taken under RSA 262-A:69-a-j. The blood was withdrawn from defendant by a registered nurse and not a physician or medical laboratory technician as provided by RSA 262-A:69-i. In State v. Groulx, 109 N. H. 281, we held that this violation of the directions in RSA 262-A:69-i did not render the blood test inadmissible, and it follows that this exception must fail.
*280 The agreed statement of facts recites that a preliminary hearing was held on the admission of the blood test evidence. Its prime purpose appears to have been to permit defendant to raise the objection disposed of above. The nurse who withdrew the blood did not testify at this hearing and defendant objected to the admission of her testimony at the trial for that reason. He cites no authority for this objection and has failed to show that the Trial Court erroneously admitted her testimony to his prejudice. State v. Foster, 80 N. H. 1, 6; State v. Hedding, 122 Vt. 379.
Defendant next objects that since the arresting officer testified that the defendant when observed by him was driving his car as an ordinary reasonable and prudent person would, he cannot be found guilty of operating his car while under the influence of intoxicating liquor. This argument confuses evidence and elements of the offense. Evidence of the defendant's actions and appearance both in and out of the car near the time of the offense is admissible to show his condition at the time he was operating the car. However, the offense is made out by evidence from which a jury could find that he was under the influence of intoxicating liquor at the time he was operating the car. He may have been operating his car well at the time he was observed, but the purpose of the statute is to prevent the operation of cars by persons under the influence of intoxicating liquor. Annot. 142 A. L. R. 555, 557; State v. Rodgers, 91 N. J. L. 212; State v. Storrs, 105 Vt. 180.
Defendant requested the Trial Court to charge the jury that in order to find the defendant guilty they must find that his ability to operate his automobile was impaired "to an appreciable degree" as a result of imbibing intoxicating liquor. The Court refused to use the word "appreciable" and instead charged the jury that if they found defendant's ability was impaired in "any degree" they might find him guilty.
The Trial Court's charge was a correct description of the requirement under our statute. There are no degrees of influence provided for in "under the influence of intoxicating liquor." It follows, therefore, that impairment to "any degree" is sufficient to constitute the offense. See Annot. 142 A.L.R. 555.
Exceptions overruled.
GRIMES, J., did not sit; the others concurred. | 01-03-2023 | 10-30-2013 |
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